Parliament recently passed a new law on the registration of
beneficial owners of Austrian legal entities. After obtaining the necessary
approval of the Austrian federal states, the law is expected to be published in
the Federal Law Gazette in September 2017 and will enter
into force on January 15 2018. As part of tranposing the Fourth Anti-money
Laundering Directiveinto national law, the law contains:
-the definition of a 'beneficial owner' for the entire Austrian
anti-money laundering regime; and
-provisions on the establishment and operation of the Beneficial
In disclosing the relevant information on beneficial
owners, the register aims to detect and prevent money laundering, especially
with regard to complex corporate structures, holding companies or private
foundations and trusts.
Legal entities concerned
Legal entities subject to the law are partnerships (general
and limited partnerships), corporations (limited liability companies, stock
companies) and other legal entities (associations, private foundations,
cooperative societies) with their corporate seat in Austria, as well as trusts
and trust-like agreements if they are managed in Austria. The Beneficial
Ownership Register will contain approximately 350,000 legal entities.
Definition of 'beneficial
In order to be registered, the respective legal entity must
identify its beneficial owners and take reasonable actions to verify their
identity. As a rule, all natural persons who own or control a legal entity are
considered its beneficial owners and must be registered in the Beneficial
Ownership Register. With regard to companies, the law provides for three
-a natural person directly holds more than 25% of the shares in an
-more than 25% of the shares in an Austrian company are held by
another legal entity, which is directly or indirectly controlled by a natural
person; control in this respect is indicated by directly or indirectly holding
more than 50% of shares; or
-a natural person directly or indirectly holds more than 25% of
the voting rights of the Austrian company.
As these three approaches coexist, the identification of a
single beneficial owner according to one of them might not be sufficient. All
beneficial owners must be identified, verified and registered in the Beneficial
Ownership Register. If a beneficial owner cannot be determined in this way, the
natural persons at the top management level are considered as beneficial owners
in a subsidiary way.
The law contains clear determinations with respect to
private foundations and trusts – as the three approaches are hardly applicable
to such entities. For private foundations, these are the beneficiaries,
founder, foundation council and other persons controlling the private
foundation. For trusts, these are the trustee, settler/trustor, protector,
beneficiaries and other persons controlling the trust's assets.
From January 15 2018 legal entities subject to the law must
submit a notification on their beneficial owner(s) to the Beneficial Ownership
Register by June 1 2018 at the latest. The notification must contain the:
-date and place of birth;
-nature and extent of the beneficial ownership (eg, beneficial
owner as a direct shareholder or beneficial owner as a managing director).
If an identified beneficial owner does not reside in
Austria, the notification must also include the beneficial owner's
identification number and the type of identification. In addition, a copy of
the identification must be submitted electronically.
If the relevant information can be clearly derived from an
existing register (eg. the Companies Register, the Register of Associations),
this data is adopted and the obligation to submit a notification can be
omitted. For example, this is the case when all partners of a partnership or
all shareholders of a limited liability company are natural persons.
The information on the beneficial owners is submitted to
the Beneficial Ownership Register electronically via the Unternehmensserviceportal.
Legal professionals are allowed to submit notifications on behalf of their
clients. Any changes to the information already submitted have to be disclosed
within four weeks of learning of them at the latest.
Access to register
The information in the register is not publicly available
and access is clearly limited. Generally, all legal entities have access only
to their own data in the register. Persons obliged to comply with the
requirements under the Fourth Anti-money Laundering Directive (eg, credit
institutions, real estate and insurance agents) have access to the extent
necessary to perform their due diligence obligations. To allow proper
consultation of their clients, attorneys, notaries, auditors, tax consultants
and accountants may also be granted access to the register. Other persons may
be granted access only if a legitimate interest is credibly shown. In addition
to these private persons, the register is fully available to tax authorities,
financial crime authorities, criminal prosecution authorities and the Federal
Access to the Beneficial Ownership Register will be
available as of May 1 2018 via the Unternehmensserviceportal.
If no adoption from other registers is possible, the legal
entity must submit a notification on its beneficial owners by June 1 2018 at
the latest. If no information is submitted, the legal entity is automatically
put on a dunning list and may be repeatedly fined up to €5,000. If the
notification obligation is breached with intent, a fine of up to €200,000 may
be imposed. If it is breached with gross negligence, a fine of up to €100,000
may be imposed.