Since 15 January 2018, all Austrian legal entities have to report their beneficial owners to a central register according to the Austrian Beneficial Owners Register Act Wirtschaftliche Eigentümer Registergesetz, WiEReG). The purpose of the WiEReG is to prevent money laundering and terrorist financing in accordance with EU Directive 2015/849.
The Beneficial Owners Register Act addresses all relevant company structures in Austria, e.g. unlimited liability partnerships (OG), limited liability partnerships (KG), limited liability companies (GmbH), public limited companies (AG), Societas Europaea (SE), (European) cooperatives, insurance companies, private foundations, as well as trusts and trust-like agreements that are administered in Austria.
The addressed entities have to verify their beneficial owners and their identity. In general, all natural persons who own or control a legal entity are considered to be its beneficial owners and must be registered. With regard to companies, the law provides for three different approaches:
- A natural person directly holds more than 25% of the shares or has a participating interest of more than 25%;
- A natural person exercises control over the management of the company or partnership, meaning that more than 25% of the shares in an Austrian company are held by another legal entity that is controlled directly or indirectly by a natural person; control in this respect is indicated by directly or indirectly holding more than 50% of shares; or
- natural person has sufficient voting rights in the company or partnership, directly or indirectly.
In the case that no beneficial owner according to the above-mentioned parameters can be identified, the top-level management of the company shall be seen as the beneficial
owner. There are a few exemptions from the reporting obligation. For example, limited liability companies are exempted from the obligation to transfer information to the registry if all shareholders are natural persons.
Specific provisions exist for foundations (e.g. private foundations according to the Austrian Private Foundations Act or foundations and funds according to the Federal Foundation and Fund Act 2015) and trusts (or agreements similar to a trust) that are domiciled in Austria or are managed from Austria. For private foundations pursuant to the Austrian Private Foundations Act, the following natural persons are defined as beneficial owners:
- the founders
- all potential beneficiaries
- the group of beneficiaries (abstract notion of potential beneficiaries); if a person in the group of beneficiaries receives a donation amounting to more than €2,000 per calendar year, this person has to be reported for this specific calendar year
- the members of the foundation’s management board
- all other natural persons who ultimately control the private foundation in some other way.
The term “beneficiary” is determined pursuant to the Austrian Private Foundations Act. If one of the above-mentioned functions is executed by a legal person, the beneficial owners of the legal person have to be identified and reported as those natural persons who ultimately control the private foundation. The private foundation itself has to take the necessary measures in order to fulfil the reporting obligation. Consequently, the members of the foundation’s management board – as the responsible body – have to make sure that the beneficial owners are identified and reported.
In principle, for every beneficial owner the following data have to be reported: first name and surname; place of residence (where there is no place of residence in Austria, the
number and nature of an official photo identification); date and place of birth; nationality and nature and scope of the economic interest. The required data concerning the beneficial owners have to be transmitted electronically via the Austrian Government’s Business Service Portal. It must be mentioned that also legal advisers (tax consultant, lawyer and notary) are entitled to undertake the notification. The initial registration in Austria is due no later than 16 August 2018. Newly established companies are obliged to register their ultimate beneficial owners within four weeks of incorporation. Moreover, if changes occur regarding registered data, entities are obliged to amend their registration accordingly within four weeks of the first notice. Furthermore, a verification of the data shall be undertaken once a year. The documentation and information required for these obligations must be stored for five years.
In case of non-compliance with registration duties, as of 16 August 2018 the Austrian tax authorities will automatically impose administrative penalties of up to €5,000 by default. Strong reporting violations carry a financial penalty of up to €200,000 in case of intentional infringement and up to €100,000 in case of gross negligence. These penalties primarily address entity representatives (e.g. the managing director). However, legal entities themselves can also be punished.
For the Beneficial Owners Register, the Federal Ministry of Finance acts as competent authority. The register is generally not open to the public (such as the Commercial Register), but it is accessible for several groups of persons and certain authorities. This includes all credit institutions, lawyers, notaries, auditors and tax advisers. Moreover, estate agents, business consultants and insurance intermediaries as necessary also have access in order to comply with their due diligence obligations as regards combatting money laundering and terrorist financing. Please note that an unauthorised access is subject to a fine of up to €10,000. Finally, tax inspectors, prosecutors of tax offences and supervisory authorities also have the right to inspect the register when carrying out their lawful duties.