AUSTRIA Trends and Developments Contributed by: Markus Fellner, Paul Luiki and Peter Blaschke, Fellner Wratzfeld & Partner
states have until 31 July 2027 to implement the meas - ures nationally, legal practitioners should already be considering incorporating the new instruments into their strategic planning to maximise efficiency gains in future cross-border transactions. Grace Period Act The Grace Period Act was introduced in Austria in 2024 to facilitate the transfer of businesses within families while increasing legal and planning security for successors. It allows natural persons to make an “accompanied business transfer” if they intend to transfer their business or company shares to relatives. The transferring person must declare in an application to the tax authorities that the business or company shares shall be transferred to one or more beneficiary relatives within two years of submitting the respective application. As part of this process, a tax audit will be initiated for previously unexamined periods. The aim is to identify and minimise potential tax risks at an early stage. Additionally, the law introduces simplifications in trade law, such as the electronic validation of company register entries during business registration. It also includes adjustments to labour protection laws, such as extended deadlines for certain reporting require - ments following a business transfer. Draft Corporate Leadership Positions Act (Gesellschaftsrechtliches Leitungspositionengesetz – CLPA) A draft pending review for the issuance of a Corporate Leadership Positions Act (CLPA), as proposed by the Austrian Federal Ministry of Justice, aims to imple - ment Directive (EU) 2022/2381, which mandates gen - der-balanced representation in the leadership bodies of listed companies. The primary objective of Directive (EU) 2022/2381 is to enforce the principle of equal opportunities and secure balanced gender represen - tation at the top level of management by setting mini - mum targets. To this end, the Directive establishes a set of binding procedural requirements governing the selection of candidates for appointment or election as directors. These measures are designed to ensure that the recruitment process is transparent and merit based.
Key provisions of the CLPA draft include the following. • In listed companies, the supervisory board must consist of at least 40% women and at least 40% men. • If the management board of a listed company consists of more than two persons, it must include at least one woman. This requirement goes beyond the Directive, aiming to improve the historically low representation of women in executive positions. • If the gender quota is not met, the appointment of supervisory board members is invalid (“empty seat rule”). Executive board members appointed in violation of the quota will not be registered in the company register. Navigating the Austrian M&A landscape – the impact of the Industrial Strategy 2035 The Austrian federal government recently present - ed Austria’s Industrial Strategy 2035, which aims to strengthen specific chosen sectors. This will at the same time have a significant impact on the Austrian M&A landscape. Among other measures, EUR2.6 bil - lion will be allocated to nine key technologies, ranging from AI and quantum photonics to green energy and life sciences. The government is attempting to create an environment conducive to corporate consolida - tion and private equity investment. The 117 individual measures will be accompanied by a large number of legal acts to ensure that the industrial strategy aligns with the budgetary framework. Austria’s Industrial Strategy 2035’s emphasis on tech - nological sovereignty directly intersects with Austria’s increasingly stringent Foreign Direct Investment (FDI) screening regime. M&A practitioners must now navi - gate mandatory FDI filings even for low-materiality deals within a very broad range of business sectors. However, on an EU level it is expected that regula - tions will move towards a more harmonised screening mechanism. Furthermore, Austria’s Industrial Strategy 2035 pri - oritises a circular, climate-neutral economy, thereby elevating ESG criteria from a secondary compliance checkbox to a primary transactional hurdle. Driven by interlinked frameworks such as the EU Corporate Sus - tainability Reporting Directive (CSRD), target viability
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