Austria

• 15/10/2020
• Jurisdictions

Austria introduced an FDI screening mechanism in 2011. This screening framework was replaced by the Federal Foreign Investment Act (Investitionskontrollgesetz) which entered into effect (for the most part) on 25 July 2020. The Act also introduces certain changes in line with the EU FDI Screening Regulation which entered into force on 11 October 2020. The responsible authority is the Austrian Minister for Digital and Economic Affairs.

Scope

The Austrian Screening mechanism applies to investors who are not EU, EEA State or Swiss citizens or legal persons established or with headquarters outside the EU, EEA and Switzerland and which acquire (i) an Austrian company as a whole; (ii) voting shares; (iii) controlling influence; or (iv) significant assets of an Austrian company. Screening applies in:

• Particularly sensitive sectors: defence goods and technologies; critical energy infrastructure; critical digital infrastructure (particularly 5G infrastructure); water; systems ensuring Austria’s data sovereignty; or research and development in the areas of medicines, vaccines, medical devices and personal protective equipment.
• Other sectors: critical infrastructure; critical dual use technology and dual use items; supply of critical resources; access to sensitive information including personal data or the ability to control such information; or the freedom and plurality of the media.

The screening mechanism is triggered 

• if the voting shares of the foreign investor meet or exceed 10%, 20% and 50% in particularly sensitive sectors or 25% and 50% in other sectors;
• if controlling influence is acquired irrespective of the actual voting shares; or
• if a controlling interest over significant assets of the company is acquired.

Micro-enterprises and start-ups with less than 10 employees and a balance sheet total of less than EUR 2 million are exempted.

Review criteria

The Austrian Minister for Digital and Economic Affairs examines whether an FDI poses a threat to security or public order.

Application procedure

Ex-ante review. The application for authorisation must be made following the conclusion of the contract for the acquisition but before it is carried out. Parties can apply for a certificate of non-objection prior to the conclusion of the contract. The Austrian Minister for Digital and Economic Affairs can investigate an acquisition which was not notified ex post.

Filing fees

The Austrian Act does not provide for specific fees.

Implementation and government practice

• Phase 1: The Austrian Minister for Digital and Economic Affairs must either issue a decision stating that no authorisation proceedings are commenced or notify that an in-depth investigation will be carried out.
• Phase 2: The Austrian Minister for Digital and Economic Affairs can decide to authorise the FDI, authorise the FDI subject to conditions or prohibit the FDI.

The Austrian Minister for Digital and Economic Affairs is advised by the Committee for Investment Control.

Due process

Decisions of the Austrian Minister for Digital and Economic Affairs can be challenged before the administrative courts under regular Austrian administrative law.

Time limits

The Austrian Minister for Digital and Economic Affairs has one month to decide whether to launch an in-depth investigation. A decision must then be issued within two months of the initiation of that in-depth investigation.

Confidentiality

Officials are bound by confidentiality requirements and the annual reports published by the Austrian Minister for Digital and Economic Affairs must not contain information through which individual companies can be identified.

Sanctions

The transaction may be considered null and void if carried out in violation of the Austrian Act. Failure to comply with the obligations under the Austrian Act can result in imprisonment of up to three years and fines of up to EUR 1.8 million.

Legislative developments

No new amendments to the current regime are planned.

 

The above information is a summary that does not constitute legal advice. For exhaustive information, advice, and assistance please get in touch with our lawyers.