When asked about the Buzz in Austria, Thomas Kulnigg, Partner at Schoenherr, says that M&A activity has significantly increased, with 2016 being one of the top 10 years in deal volume since 1988, and he says that 2017 is "well on its way." What Kulnigg is currently excited about, beside the typical Corporate/M&A work, is the start-up work his team is doing.
Kulnigg begins by pointing to a recently-passed law in Austria making it easier to establish limited liability companies (GmbH) with only one shareholder - the founder – who also acts as sole managing director. The law, which is scheduled to come into effect at the beginning of 2018, allows such companies to complete the registration/creation process online, meaning that, other than a visit to a bank to check your ID, "everything can be done from your desk."
Kulnigg notes that the new law is hardly a game-changer - "because of its limitations, I don't think this is a big shot" he says, explaining that the law applies only to entities with one shareholder and may thus be not relevant for foundations by several founders, which is the majority of start-up foundations - but he describes it as "a step in the right direction." At the moment, he says, companies have to go "both to the notary public and the banks, taking time and money," so a simplified process will be useful.
Besides, Kulnigg reports, that law is hardly the extent of Austria's commitment to start-ups. "The Austrian government has planned to provide additional funding of up to EUR 185 million to start-ups," he reports". "Austria generally provides a lot of different forms of funding to start-ups," he says, and while he concedes that also other countries in the region provide some form of grants to start-ups, he describes the significant funding available to start up a company in the country as "an Austrian peculiarity." Kulnigg adds that there is a lot going on this the scene, citing as a prime example a new accelerator expected to work with 100 such companies per year beginning in the fall of this year.
Moving outside the start-up world, Kulnigg describes that his practice is still busy with classic M&A work such as wind-down transactions for the Austrian Bad Banks. Kulnigg is advising them now for several years in and outside of Austria. It is "great working for them as the deals are interesting as well challenging." Kulnigg is happy to be able to help them fulfilling their wind-down objectives. "They are doing actually great," Kulnigg adds.
In terms of other recent legal developments, Kulnigg adds that Austria recently announced plans to make it easier for joint stock companies to give shares to employees as additional remuneration. A draft bill, which Schoenherr was able to comment before it was published, was recently published enabling employers to grant shares up to EUR 4.500 to employees per year on a tax-free basis.
In general, Kulnigg says, lawyers on his Start-up team are staying busy. He reports that his group is "getting a larger and larger footprint, working with some of the biggest venture capitalists in Austria, for which we have inter alia developed an incentive program that is based on equity participation rights. We are rolling that out in their entire portfolio." In addition, he says, "our corporate and M&A group is very busy. We're doing great at the moment."