Austria: Amendment to the Austrian Beneficial Owners Register Act – reporting obligations for Nominee Agreements

In detail

1. Definition

A Nominee Agreement is any formal or informal arrangement under which a Nominee or Nominee Director is obliged to act as owner or executive of the reporting entity on behalf of a Nominator.

• The Nominator issues direct or indirect instructions and thereby exercises control over the Nominee based on the agreement.
• Accordingly, the Nominee receives instructions on how to act for the Nominator in the capacity of owner or executive of the reporting entity.
• Nominee Directors typically perform management functions of the reporting entity in their own name but under the Nominator's instructions (e.g. signature for sale agreements).
  Individuals, legal entities or groups of both can act as Nominators, Nominees and Nominee Directors.

2. Scope of the reporting obligation

All Nominee Agreements involving direct owners or executives of the reporting entity must be disclosed in its UBO filing. The percentage of shares or interests covered by a Nominee Agreement is not relevant. A factual de minimis threshold may apply in individual cases where the costs and effort of identifying minor Nominee Agreements are disproportionate or unreasonable (e.g. in the case of listed companies).

Example 1

 
Nominee Agreements at higher ownership levels (i.e. involving indirect shareholders) only need to be reported if they establish beneficial ownership of the reporting entity.

Example 2

 
Example 3

3. Reporting event and content

If a Nominee Agreement establishes beneficial ownership of the reporting entity, an amendment filing must be submitted within four weeks of the agreement's establishment. Such agreements establishing beneficial ownership were already subject to reporting under prior law. The amendment of the BORA does not result in any changes.

Nominee Agreements that do not establish beneficial ownership must be reported either in the next annual

UBO filing or in any other (earlier) amendment filing.

The filing must include the date and title of the agreement and information on all Nominees, Nominee Directors and Nominators.

• Individuals: Full name, date and place of birth, nationality, residential address; if no Austrian residence exists, an official ID copy must be attached.
• Deceased individuals: Full name – where possible, date and place of birth.
• Legal entities: Registration number – for entities outside of Austria, the entity's name, business address, legal form, registration number and register details.

4. Exemption from reporting

Entities previously exempt from UBO filings lose this exemption if a Nominee Agreement exists. Such entities must waive the exemption and submit a UBO filing disclosing the relevant Nominee Agreement.

5. Restrictions of register access

The possibility to restrict access to the UBO Register based on legitimate interest of the individual applies equally to Nominees, Nominee Directors and Nominators.

authors: Stefan Egger / Lukas Lobinger