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Screening of Foreign Direct Investments (FDI)

Investment screening requires an authorisation for the acquisition of an Austrian undertaking, a part of it, a share or controlling interest in it by natural persons or legal entities of third state origin (outside EU, European Economic Area, Switzerland) under certain conditions . This screening only concerns acquisitions of undertakings in critical infrastructure sectors clearly defined by law. The relevant screening factors only concern the potential danger to security or public order by the planned transaction.

Legal Framework

  • In Austria the legislation on screening of foreign direct investment is based on the Federal Act on the Control of Foreign Direct Investments (Investment Control Act – ICA / InvKG) at national level, in force since  25 July 2020 (except the provisions regarding the cooperation mechanism on EU level, which are in force as from 11 October 2020).  
  • At EU level the legislation is based on Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the Union (FDI-Screening-Regulation), Official Journal of the EU No. L 79I/1 of 21 March 2019 p. 1, in force since 11 April 2019, mandatory application as from 11 October 2020.

Comparison Investment Control Act - Legal Framework in accordance with Section 25a Foreign Trade Act 2011

Austria first adopted rules in 2011 (Section 25a Foreign Trade Act 2011) providing a screening of investment by persons from third states outside of the EU, the European Economic Area and Switzerland in case of potential threats to security or public order. Compared to Section 25a Foreign Trade Act 2011 the Investment Control Act entails substantial improvement:

  • More precise definition of included sectors
  • Better screening possibilities of indirect acquisitions
  • Lower threshold (ten per cent) triggering the authorisation obligation: in particularly sensitive areas (e.g. water, 5G-networks, pharmaceutical sector, energy, medical products, protective equipment)
  • Exemptions from the authorisation obligation for certain microenterprises (including start-ups)
  • Cooperation mechanism between the European Commission and all EU Member States

The Investment Control Act maintains the attractivity of Austria as a business location and at the same time protects enterprises of special importance for security and public order.

Conditions for the authorisation obligation

The Austrian undertaking targeted by the acquisition is active in an area of particular relevance for security or public order. A non-exhaustive list of these areas is set out in the annex to the Investment Control Act.

An authorisation is required in the following cases:

  • Acquisition of the whole undertaking;
  • Acquisition of a specific share of voting rights (ten per cent or twenty five per cent);
  • Acquisition of a controlling interest; or
  • Acquisition of material assets, whereby a determining influence on part of an undertaking is acquired

Exception from the authorisation obligation

An authorisation is not required, if the undertaking targeted by the acquisition is a micro enterprise, including start-up enterprises, with fewer than ten employees and an annual turnover or an annual balance sheet total of less than two million Euros.

Important information for submission of applications

  • Obligation to submit applications: In case of an authorisation obligation the application for authorisation shall be submitted by the acquiring person or acquiring persons respectively. The targeted Austrian undertaking will be informed about this application. The targeted undertaking has a subsidiary obligation to notify the transaction upon becoming aware of the intended acquisition requiring an authorisation, if it has not been informed by the Federal Ministry of Digital and Economic Affairs that an application has been launched. This notification shall be submitted by the Austrian undertaking immediately after becoming aware of the intended acquisition transaction.
  • The application for authorisation shall contain all necessary information according to Section 6 par. 4 Investment Control Act (see also the checklist on that).
  • Time of application:  The application shall be submitted in principle immediately after conclusion of the contract for the acquisition of the undertaking.
  • Procedural steps:  After receipt of the complete application the European Commission is notified without delay. Within one month after expiry of all time limits under the EU cooperation mechanism the procedure has to be either closed by granting the authorisation or an in-depth investigation has to be initiated. The in-depth investigation lasts a maximum further two months.

Checklist for the application according to section 6 of the Investment Control Act

The application for authorisation shall contain:

  1. the name and address of each acquiring person,
  2. the name and address of the target undertaking,
  3. a precise description of the business activities (including products, services and business transactions) of the persons and undertakings mentioned in Items 1 and 2, including a description of the market in which these business activities are carried out (competitors, market share),
  4. an indication of the natural or legal person in whose ownership or under whose control each acquiring person is ultimately located, whereby the criteria in Section 2 of the Beneficial Owners Register Act (WiEReG), Federal Law Gazette I No 136/2017, shall be applied,
  5. a detailed description of the planned transaction and the detailed ownership- and shareholding structure in the target undertaking, including the information specified in Section 4 and 5,
  6. the other EU Member States in which each acquiring person and the target undertaking conduct relevant business operations,
  7. the funding of direct investment and the source of this funding,
  8. the date on which the direct investment is planned to be completed or on which it was completed,
  9. the notification of whether the process must also be reported under the EU Merger Regulation,
  10. the naming of one or more persons with power of attorney in Austria for each acquiring person
  11. the notification of whether the process has or may have an impact on a project or programme of Union interest within the meaning of Section 10 Item 3, if this is known to an acquiring person.

Further explanations recommended are:

  • telephone number and e-mail address of each acquiring person
  • telephone number and e-mail address of the targeted undertaking
  • if possible graphic representation of the planned transaction and the detailed ownership- and shareholding structure in the targeted undertaking
  • in order to enable electronic delivery, please provide the ADVM-code (address code)
  • in the event of application of the procedure according to the EU cooperation mechanism it would be advantageous to receive also an English language copy besides a copy of the application in German language


If it is concluded that the acquisition does not lead to a threat to security or public order, an authorisation is granted. An authorization is deemed to be granted, if no decision is issued within the one month period in the first phase of the procedure or within the two months' period of the in-depth investigation.

If it is concluded that the acquisition leads to a threat to security or public order the authorisation has to contain all conditions necessary to eliminate this threat.

If conditions are not sufficient to eliminate the threat the authorisation has to be denied.    

Clearance certificate

Moreover, there is the possibility of applying for a clearance certificate before the acquisition transaction in order to clarify beforehand, if the planned acquisition requires an authorisation.

  • Entitlement for application: Any acquiring person or the targeted undertaking may submit the application for issuance of a clearance certificate.
  • Information in the application: The application shall contain all information also listed for the application for authorisation (see also the checklist).
  • Time of application: any time before carrying out the acquisition.
  • Procedural steps: Within two months after receipt of the complete application a clearance certificate shall be issued by administrative decision if the direct investment is not subject to an authorisation obligation.

Possible consequences in case of breach of the provisions of the Investment Control Act

Acquisitions requiring an authorisation under the Investment Control Act shall be deemed to have been concluded under the condition precedent that the authorisation is granted.

Moreover the Federal Ministry for Digital and Economic Affairs can initiate an ex officio authorisation procedure, if no application has been launched.

Sanctions under civil law

An acquisition subject to an authorisation requirement is not valid until the authorisation is granted.

If such an acquisition has already been completed in whole or in part before the decision on an authorisation was taken and it is established that the acquisition leads to a threat to security or public order subsequent conditions to eliminate such threat shall be imposed. If such conditions are not sufficient to eliminate the threat, the  unwinding of the entire acquisition or the completed parts thereof shall be mandated.

Sanctions under criminal law

The Investment Control Act contains criminal law provisions providing for penalties of up to one year’s imprisonment (or up to three years’ imprisonment in qualified cases), as well as administrative penal provisions providing for fines  of up to 40.000 Euros.

Additional Information

It is recalled, that requests filed out of office hours are considered as arrived at the next office day.

Office hours are on working days from Monday to Friday, always from 8 a.m. to 4 p.m.

FAQs regarding screening of foreign direct investment

(in preparation)

Publications according to Section 25a par. 14 Foreign Trade Act 2011

  • GZ.: BMDW-23.910/0142-III/2/2019, Notification according to Section 25a par. 8 Item. 2 AußWG 2011 dated 4 November 2019:
  • Buyer: ADX Energy Ltd., Australia; acquisition of the branch undertaking "Exploration & Production" of RAG Exploration & Production GmbH by ADX Vie GmbH, a 100 per cent subsidiary of ADX Energy Ltd.
  • The process is deemed to be unobjectionable.
  • GZ.: 2020-0.417.169, Notification according to Section 25a par. 8 Item. 2 AußWG 2011 dated  7 July 2020:
  • Buyer:  LLC Gazprom International Projects; Russian Federation; Acquisition of a share with a stake corresponding to 50 per cent of the share capital of South Stream Austria GmbH

The process is deemed to be unobjectionable.

Additional Information


Unit for investment screening: