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Exceptions apply for the acquisition of land, agricultural land particularly, as theAustrian provinces have each passed legislation which provides certain control andadministrative approval prior to a foreign controlled company or foreign individualsacquiring real property. There may be other restrictions such as anti-trustclearances, securities laws and regulations etc. which may affect an investment butthey affect both foreign and domestic investors.No restrictions on using nominee shareholders. They are registered in the CompanyRegistry as shareholders, they are treated as shareholders and neither discriminatedagainst nor denoted as nominee shareholders. There is also no requirement todisclose the beneficial shareholders to the Company Registrar. The trust agreementcan be disclosed to the tax office at the time of distribution of dividends or realizationof capital gains in order to shift the tax burden from nominee to beneficial owner, butthe tax office must keep the trust agreement confidential.No Foreign Exchange Control in Austria other than certain reporting requirements tothe Austrian National Bank for statistical purposes only. This also applies when anAustrian company establishes foreign subsidiaries.The advantages set out above provide a foreign investor with a safe and reliableenvironment. Austrian rules and legislation are not as frequently changed as may be thecase in other countries, in particular in the area of corporate and commercial law. The Act onthe Limited Liability Company (GmbH) is still the 1906 Act and the Act on Joint StockCorporations (AG) is from 1965. Over the years both Acts have been slightly amended tocope with the changing business environment and practices. A foreign investor can thereforeexpect a secure and reliable structure and legal environment which allows long termplanning.III The Limited Liability Company (GmbH)A GmbH is created by one or more shareholders drawing up Articles of Association in theform of an Austrian notarial deed and the registration of that deed with the Company Registrykept at the Commercial Court or the High Court of the relevant district. Once entered intothe Register, the GmbH becomes a legal entity of its own.In order to get there, a number of steps are required as follows:The GmbH needs a name, followed by the designation “Gesellschaft mit beschränkterHaftung” or “GmbH”. The name can be the name of a shareholder, a description ofthe business to be carried out by the company, a fantasy name or any combinationthereof. The name must not conflict with the name of an existing company, must notinterfere with existing IP rights and, above all, the name has to be true. This mightcause problems in connection with geographic descriptions e.g. “Austria” or “Europe”as a geographic area as the description would only be permitted if the company isactually intending to carry out business throughout that region. The name must alsonot contain a description of a business for which a special licence is required, such as“bank”.The company has to have a description of its business objectives. As businessesoften require a business licence it is advisable to limit the business objectives to theactual business to be carried out by the company and not to use an all inclusiveclause as commonly found in Anglo-American articles of association. In addition tothe main business objectives, it is advisable to mention ancillary business activitiessuch as holding activities, management of other companies doing the same businessetc.The company requires a statutory seat stated in the Articles of Association, whichmust be a geographic location in Austria e.g. “Vienna”. An actual business address orregistered office does not have to be stated. The statutory seat determines thejurisdiction of the Commercial Court or High Court keeping the Company Registry.- 18 -