On 25 July 2020, the Investment Control Act entered into force. This new Austrian law significantly expands federal oversight of foreign direct investments.

Henceforth, direct and indirect acquisitions by investors from third countries in certain sectors classified as sensitive will require approval from the Federal Minister of Digital and Economic Affairs. Approval is required for acquisitions of:

  • an Austrian company;
  • certain voting rights in an Austrian company (in some cases even just 10%);
  • a controlling influence over an Austrian company.

Approval is also required for asset deals if the assets are acquired by third-country nationals and the assets are so far owned by an Austrian company. Using an acquisition vehicle that is controlled by a third-country national but based in the EEA may no longer suffice to bypass the foreign direct investment regulations.

The list of industries covered by the Investment Control Act is long. “Particularly sensitive sectors” include:

  • defense equipment and technologies
  • operation of critical energy infrastructure
  • operation of critical digital infrastructure, especially 5G infrastructure
  • water
  • operation of systems that guarantee the Republic of Austria’s data sovereignty
  • research and development in pharmaceuticals, vaccines, medical devices, and personal protective equipment

But the Investment Control Act also applies to other sectors, which the Austrian legislator considered to be vital for security, public order, and crisis management, such as critical infrastructure for energy, information technology, traffic and transport, health, and food.

The Investment Control Act now covers a substantially greater number of transactions, parties, and assets than were previously subject to oversight. Even if a transaction’s connection to Austria is merely marginal, or of little importance for the overall deal, and the parties do not consult Austrian attorneys, the Investment Control Act could be consequential.

A major strength of our firm is our familiarity with coordinating transactions across multiple jurisdictions. We have the capacity to advise on Austrian investment control, and also to utilize our international contacts to ensure efficiency when applying for approval in parallel proceedings.

Our multidisciplinary team welcomes your questions regarding investment control, so please feel free to contact us at any time.

Our expertise at a glance:

  • Determining whether the transaction requires approval under the Investment Control Act
  • Preparing the application and representing the client in proceedings
  • Applying for a clearance certificate (Unbedenklichkeitsbescheinigung)
  • Advising on possible remedies
  • Coordinating parallel investment control procedures in multiple jurisdictions