Foreign investors who want to set up a company in Austria are usually interested in the most developed industries. One of these economic sectors is the financial one. Those interested in starting a financial company in Austria must comply with the legislation regarding to the financial industry and must obtain various licenses from the Financial Markets Authority (FMA) or from the Federal Ministry of Finance in Austria (BMF).
Our Austrian company formation consultants can offer information on the legislation governing the financial industry.
Table of Contents
Authorities responsible for financial companies in Austria
The primary authority overseeing financial companies in Austria and their activities is the Financial Markets Authority (FMA), which ensures that financial markets operate in a secure, transparent, and efficient manner. The FMA is responsible for regulating and supervising the financial sector, including: banking, insurance, securities, and pension funds. The Federal Ministry of Finance (BMF) is also involved in the regulatory framework and policy-making for the country’s financial market. These two authorities play a crucial role in ensuring that financial companies comply with Austrian and EU regulations.
The FMA is an independent body, operating under the jurisdiction of the BMF, and works in conjunction with European regulatory bodies, ensuring that Austria’s financial market aligns with EU standards, particularly those that are part of the European Economic Area (EEA) regulations. The FMA provides licensing, supervision, and enforcement of laws related to financial institutions and their services.
Rely on our specialized company formation agents in Austria in order to have a better understanding about how these authorities operate.
How to register a financial company in Austria
In order to open a financial business in Austria one must first select one of the types of companies available under the Commercial Code. Among these, the private and the public limited liability companies are the most suitable ones. These must have the proper documentation prepared in order to be allowed to operate as financial companies. They must also take into account the share capital requirements imposed by the law which depend on the type of activities undertaken.
Our company registration agents in Austria can assist with the incorporation of the company with the Trade Registrar.
Depending on the activities an Austrian financial company will undertake, it will also need to obtain certain licenses from the two authorities mentioned above.
Types of activities undertaken by a financial company in Austria
Austria is a recognized European financial center which is why setting up a financial company here has many advantages. Austrian companies can operate in one of the following sectors of the financial industry and they must obtain financial licenses for them:
- The insurance sector in Austria is well-regulated, and companies can provide life, health, property, and casualty insurances. Austrian financial companies in this sector must comply with the regulations set by the FMA, including those governing capital adequacy, product offerings, claims management, and consumer protection;
- The banking industry: Austrian banking companies are involved in a variety of activities, such as: retail, corporate, investment and private banking. Banks in Austria must adhere to strict regulations regarding liquidity, capital requirements, and risk management. They are also required to comply with EU regulations such as the Capital Requirements Directive;
- The investment funds sector: Austria is known as a hub for investment funds in Europe, and foreign investors can set up various types of investment funds. These include: alternative investment funds (AIFs), pension funds and undertakings for collective investment in transferable securities (UCITS).
Austrian financial companies can also offer e-payment services which also enable their clients to use merchant bank account services.
Regulatory requirements for financial companies in Austria
In addition to obtaining licenses, financial companies in Austria must adhere to ongoing regulatory requirements. These include:
- Capital requirements: financial institutions must maintain sufficient capital reserves to absorb losses and ensure they can continue operating in times of financial distress.
- Reporting obligations: financial companies are required to file regular reports with the FMA, including: financial statements, risk assessments, and details about their business activities.
- Compliance with EU regulations: as Austria is a member of the EU, financial companies must also comply with EU-wide financial regulations, such as MiFID II (Markets in Financial Instruments Directive) and the Anti-Money Laundering (AML) Directive. These regulations cover everything from investor protection to anti-fraud measures.
- Consumer protection: financial companies must ensure that their services are fair, transparent, and in the best interest of consumers. This includes: adhering to the Consumer Credit Directive and providing clear, understandable information about financial products.
Financial and banking industry data in Austria
As Austria’s finance sector is continuously growing, including insurance and banking operations, official data shows some impressive numbers registered in the past years:
- In 2022, there were 493 banks registered in Austria;
- In the same year, insurance companies in Austria hired around 27,000 employees.
- The net interest income for Austrian banks in 2022 was EUR10.6 billion.
Financial companies are subject to the same annual reporting requirements as any other legal entities in the country. However, given the nature of the services they provide, they may be subject to more complex reporting requirements, as well as other regulatory provisions. Our accountants in Austria offer tailored services that fit the profile of the business. You can reach out to us for details about our solutions.
For assistance in opening a financial company, please contact our company formation advisors in Austria.