Mr Babis is accused of hiding ownership of a farm and convention centre to receive a 2 million euro subsidy a decade ago.
He denies the allegations and even voted in favour of removing his immunity protection.
Mr Babis said: “We live in a country where you can order a prosecution of somebody and you can probably get somebody in jail.”
The Prime Minister, who created the ANO party in 2011, remains popular among voters and has called the subsidy case a ploy by opponents to drive him out of politics.
Czech Republic lawmakers voted, 111 to 69, to lift parliamentary immunity for Mr Babis and Jaroslav Faltynek, the deputy chairman of the ANO party.
On Tuesday, Mr Babis’ minority government lost a confidence vote in its first attempt and the following day Mr Babis’ minority government resigned.
He previously said: “If the ANO government does not win a vote of confidence at the first go, a member of another party should be invited to form a government.”
The threat of legal action has prevented Mr Babis from creating a government as smaller parties have refused to back him while the charge remains.
The ANO party won a general election in October last year, but has not been able to form a coalition, despite holding 78 of the 200 lower house seats.
Mr Babis future may also hinge on who is the next Czech Republic president.
A presidential run-off vote next week on January 26-27 will see incumbent Milos Zeman, who backs Mr Babis, face academic Jiri Drahos, who thinks it would be unacceptable to have a prime minister facing police charges.