Austrian Bank Account

 

Extensive and constantly increasing KYC requirements complicate the process of opening bank accounts for foreign natural or legal persons in connection with the establishment of an Austrian GmbH.

1. Why is it necessary to open a bank account when incorporating a GmbH?

When a GmbH is formed, at least half of the share capital must be raised in cash - provided that there is no formation in kind. A domestic bank account must be opened for the GmbH so that shareholders can make their capital contribution. The GmbH shareholders' payments are made into this account. For details regarding the share capital, please refer to our blog post "Austrian LLC Incorporation".

In the course of the registration in the commercial register, a confirmation from the account-holding bank on the payment of the capital contributions must be enclosed. With such a confirmation the bank essentially confirms that the minimum capital is available and at the free disposal of the managing directors.

Note: In accordance with the dual control principle, two persons authorized to represent the bank must sign the confirmation, otherwise the Commercial Register Court will issue an improvement order.

 

2. Timeline and KYC-Check

In the course of opening the account the bank shall establish and verify the identity of the future partner(s) and the managing director(s) by presenting copies of official photo identification. Furthermore, an (uncertified) sample company signature shall be submitted.

The duration of the account opening process depends mainly on the origin of the founders (domestic, EU or third country). While the opening of a bank account for domestic foundations is usually completed within approximately one week after the submission of all documents, the process can sometimes be considerably delayed for foreign foundations. The main reason for this is the increasingly strict legal requirements for banks to carry out so-called KYC ("Know Your Customer") checks for money laundering prevention purposes before each account is opened. The bank must determine the identity of the customer, the business model and the origin of financial flows.

The actual documentation effort varies depending on the specific individual case, but increases in any case in the case of establishments abroad. For the opening of business accounts of foreign natural persons or legal entities as founders of a GmbH, banks generally require certified and - if over-certification cannot be dispensed with in individual cases - apostilled documents, and if necessary also (certified) translations of foreign-language documents into German.

For example, the following information or documents are regularly required for the purpose of conducting a KYC test:

• A signed organization chart (not older than 3 months);
• A clear explanation of the chain of ownership (including the identification of the beneficial owners [i.e. essentially natural persons who hold more than 25% of a company]), in particular by submitting an extract from the commercial register, an extract from the share register or other documents identifying the owners;
• copies of identification documents of the beneficial owners;
• proof of a reference to Austria (e.g. by Austrian customers or employees);
• proof of the absence of a mailbox company;
• Indication of the turnover thresholds of the founding company (for the purpose of internal bank allocation).
  
  

In the case of an offshore reference (especially characterized by low taxes of certain locations such as Cayman Islands, Delaware, Hong Kong etc.) banks regularly refuse per se to open a bank account. If banks also accept clients with offshore connections in principle, there is in any case an increased obligation for the banks to carry out checks, coupled with an obligation to update the information provided annually.

 

3. Alternative solution approaches

If rapid action under the umbrella of the GmbH is essential for the founders, the following options are available should the opening of the "regular" GmbH bank account cause difficulties:

• Payment of the capital stock into a notarial trust account: the notary confirms that the articles of association were notarized by him, that the demanded capital stock is on his trust account and after entry in the land register is transferred to a bank account of the GmbH to be designated by the management;
• Use of a shelf company (a GmbH already registered in the commercial register): here the founders acquire 100% of the shares of the GmbH on the basis of a short share purchase agreement and the memorandum and articles of association as well as the partners and management are adjusted accordingly and these changes are registered with the commercial register; the share capital is located in the bank account of the GmbH already opened.
  
  

Opening the bank account is a challenge for you? We support domestic and foreign founders in the course of consulting on the establishment of a GmbH in itself, also with regard to the opening of a bank account for the GmbH.

 

Your DWP team

E-Mail: wien@daxundpartner.at

Phone: +43 5 9004 300

 

The Authors: