Deposits are repayable funds from the public carrying an obligation to repay, and only banks may accept them. The more an investor loan resembles a deposit, with guaranteed principal and fixed interest offered to a wider audience, the closer it comes to unauthorised activity. The law draws one firm line: approaching no more than ten persons exclusively through personal contact is not a public invitation. If investors' returns instead depend on project performance, collective investment rules must also be assessed.
A developer or growing company borrows from private investors instead of a bank: principal is repaid in three years, interest is fixed and the agreements are simple. It sounds safe, which is precisely the trap. The more this financing resembles a bank deposit, with guaranteed repayment and a certain return, the more likely it is to encounter the monopoly reserved to banks.
Only a bank may accept deposits
The Banking Act is succinct:
No person may accept deposits without a banking licence.
— Section 3(1) of Act No. 483/2001 Coll. (unofficial English translation)
A deposit is not limited to a savings account. The law defines it as entrusted or other repayable funds from the public representing an obligation to repay the depositor (Section 5(a) of Act No. 483/2001 Coll.). A loan with guaranteed principal and fixed interest meets that definition; the remaining question is whether it is raised “from the public”. A related prohibition addresses the other side of the balance sheet: without a banking licence, repayable funds raised through a public invitation cannot be lent onwards under Section 3(2). We discuss this in when lending requires NBS authorisation.
The sole firm boundary: ten personally approached persons
The law defines addressing the public through the concept of a public invitation:
For the purposes of this Act […] (k) a public invitation means any communication, offer or recommendation by any person to raise funds for their own benefit or that of a third party, made through any means of publication, including personal contact with several persons, successively with individuals or simultaneously with several persons; a communication, offer or recommendation made exclusively through personal contact and addressed to no more than ten persons in total is not considered a public invitation for the purposes of this Act.
— Section 5(k) of Act No. 483/2001 Coll. (unofficial English translation)
An advertisement, website, social media post or email to a wider contact list is therefore always a public invitation. The safe harbour is narrow: exclusively personal approaches to no more than ten persons in total. Count those approached, not just those who eventually provide money. Czech law has no equivalent numerical boundary. Its prohibition on raising money from the public for joint investment provides an exception only for fundraising exclusively from qualified investors (Section 98(2) of Act No. 240/2013 Coll.). The Slovak ten-person rule therefore cannot be carried across the border in either direction.
Two regulatory areas must be assessed
Private project financing is governed by two regulatory regimes at once. If an investor’s return depends on the project’s outcome, the collective investment test applies; see when raising investor money constitutes collective investment. If principal is repayable and returns guaranteed, the deposit-taking monopoly is engaged. The popular hybrid “we do not guarantee returns on paper, but always repay everything in practice” combines rather than removes the risks. Supervisors assess how the model actually works, not contractual wording, and a hybrid may be scrutinised under both regimes.
How to finance a project lawfully
Safe routes exist: credit or loans from members, a parent company and personally approached acquaintances within the ten-person limit; equity investment in a company, where profit participation carries risk and is not a deposit; bond issuance under its own legal regime, with prospectus requirements discussed in when a bond offer is a public offer; and conventional bank financing. The red line is a public offer of “safe returns with guaranteed repayment”: precisely the business the law reserves to banks.
How we can help
We structure robust investor agreements, from credit and loan agreements and investor entry to a collective investment review where both regulatory boundaries need assessing. Tell us how many investors you plan to approach and what you promise them. Whether you are on safe ground can often be answered briefly.
This answer provides general information on the law as at 5 September 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
