From entrepreneurs, as market participants professionally conducting business activities, due diligence is required when choosing a contractor and conducting transactions, under the threat of high tax penalties, and even criminal and tax-fiscal penalties. Its observance is primarily served by the verification of the contractor’s registration data, its status, and authorized representatives. It is obvious that greater uncertainty arises when establishing cooperation with a foreign contractor, which is more difficult to verify due to administrative-formal differences and language barriers. How to check a company from Austria?
Observing due diligence in contractor verification
In today’s times, establishing a company is very easy. In many countries, this can be done without even leaving home, through the Internet. Therefore, one can never be sure who is really hiding behind the created name and entry in the register until it is checked. Verification is served by actions commonly used in economic intelligence, consisting primarily of checking the reliability and currentness of the contractor’s documentation, KRS, NIP, REGON, as well as permits and certificates necessary for conducting a specific type of activity.
Verification can be carried out by obtaining information from relevant individuals and institutions, such as: registration courts, ZUS (Social Insurance Institution), tax authorities, or national and international chambers of commerce. It is worth delving into the knowledge about the history of the activity and its owners, including opinions about the company, also by searching the Internet or asking other entrepreneurs, contractors of this entity, and the interested party directly. It must be remembered that failing to exercise due diligence in selecting a contractor carries legal consequences, e.g. in the form of accusations of conscious participation in irregularities, and the resulting further tax and legal sanctions.
Economic cooperation with Austria
Poland and Austria share a very strong economic bond. According to data from the Austrian Embassy in Warsaw, the value of bilateral trade in 2019 was nearly 10 billion euros, with over 550 Austrian companies having their representations in Poland. Austria became the 8th most important export destination for Polish companies (5.1 billion euros) and the 7th in terms of import (4.65 billion euros). We import from Austria mainly machinery and mechanical vehicles, including automotive parts, pharmaceutical products, paper and cardboard, metal products, clothing, beverages, vegetables, and fruits. In the opposite direction, we send the most: machinery and automotive parts, furniture and electronic equipment, as well as food products and finished goods – suitcases and leather products, musical instruments, and watchmaking articles. In 2019, there was also an increase in bilateral service exchange. Service exports from Poland increased by over 14% (1.74 billion euros), and imports from Austria by 6.7% (1.15 billion euros).
Austria, with an amount of 6.2 billion euros, is the 8th foreign investor in Poland, creating nearly 50 thousand new jobs. Institutions dedicated to establishing and maintaining economic cooperation between Polish companies and Austrian ones are the Trade Department of the Austrian Embassy in Warsaw and the Austrian Economic Cooperation Office in Krakow. Detailed information can also be provided by the Austrian Chamber of Commerce in Poland.
Due to the partnership within the European Union, since May 1, 2004, economic relations between Poland and Austria are primarily regulated by treaties and other legal acts that apply to EU member states in common relations. In addition, the most important bilateral international agreements include the agreement on the avoidance of double taxation in the field of income and property taxes, signed in Vienna on January 13, 2004 (effective from April 1, 2005), amended by the Protocol between the Republic of Poland and the Republic of Austria signed in Warsaw on February 4, 2008 (effective from July 17, 2008), and the agreement on economic, technical, and technological cooperation from October 27, 1995 (effective from August 1, 1996).
According to the Ministry of Entrepreneurship and Technology data, at the end of 2017, there were 773 companies with Austrian capital registered in Poland. Polish investments in Austria amounted to over 308 million euros, mainly in the services and capital market sector. As of May 1, 2011, the transitional period ended, during which restrictions on the freedom to provide services by Polish companies in Austria were in force. Potential areas of intensified cooperation from Austrian companies include the construction sector, banking, real estate market, as well as the chemical and paper industry. Polish entrepreneurs want to cooperate with Austrians in the field of modern technologies in energy, district heating, and automotive sectors.
National and EU sanctions
As reported by the Polish Press Agency in a publication from August 3, 2023, Austria refuses to take a tougher stance against Russia in the face of its armed aggression in Ukraine. Austria cites its neutrality in this regard. The Polish Press Agency directly calls it “Putin’s ATM in the eurozone.” Since the outbreak of the war in Ukraine, the authorities in Vienna have paid Russia 7 billion euros for gas alone. The Austrian Raiffeisen Bank handles over half of the international payment transactions with Russia. Russian influence and cooperation with Austria thus have strong foundations, and both countries share strong and difficult-to-sever economic ties. And this has been very important for Polish companies for over a year.
They must be even more cautious in their cooperation with foreign partners, including Austrian business partners. The European Union imposed 11 packages of sanctions on Russia on June 23, 2023. Poland also imposes its additional sanctions. These include key individuals in Russia, as well as companies from this country and Belarus. Trading in goods and services with Russian and Belarusian companies is prohibited. Polish entrepreneurs face a financial penalty of up to 20 million PLN and even up to 15 years of imprisonment for violating it. However, Russian and Belarusian entrepreneurs have learned to circumvent international bans, using complex holding structures established in other countries, making it difficult to detect the actual ownership structure.
Detailed information about the type of EU-imposed ban on economic transactions with Belarus and Russia can be found on the European Council’s websites: https://www.consilium.europa.eu/. In the Official Journal of the EU, at the address: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0269-20220721, there is a list of individuals and entities subject to sanctions. The Polish Ministry of Internal Affairs and Administration also maintains an up-to-date register of entities subject to sanctions, where you can check the contractor, its connections, reasons for inclusion in the register, and applied sanctions: https://www.gov.pl/web/mswia/lista-osob-i-podmiotow-objetych-sankcjami.
In the first step of checking an Austrian company, it is possible to check whether it is listed in any of the aforementioned registers. The Regulation of the Council (EU) 2022/576 of April 8, 2022, amending Regulation (EU) No. 833/2014 concerning restrictive measures in connection with Russia’s actions destabilizing the situation in Ukraine, is also a source of useful information.
Economic intelligence, or how to check a contractor from Austria?
Verification of a contractor can be entrusted to a professional economic intelligence agency that specializes in carrying out such orders. A private detective in Warsaw, Poznań, Wrocław, or other cities will know how to obtain necessary information to verify the current or future contractor.
The most important way to verify a contractor and its potential connections to Belarus or Russia is to determine the entity that is its ultimate beneficiary, and then check if it is listed on the aforementioned sanctions list maintained by the Ministry of Internal Affairs and Administration. These determinations can be made in the Central Register of Ultimate Beneficial Owners maintained by the Minister of Finance: https://crbr.podatki.gov.pl/adcrbr/#/wyszukaj.
A publicly available way to obtain information about a contractor is to search the resources of the Internet. Verifying a company, checking if it has a website, what opinions exist about it, and perhaps stumbling upon some publication about it. If, for certainty, we do not want to do this ourselves, we can entrust the research to a detective agency specializing in professional economic intelligence. Because sources of information are much more than just the World Wide Web. For example, you can contact the Polish Embassy in Vienna with a specific query about a particular entity. Have any complaints been received from other entrepreneurs, or perhaps according to the knowledge of the Austrian diplomatic mission, the Austrian contractor has a bad reputation? Similar information can be provided by Polish-Austrian chambers of commerce.
Direct inquiry to the contractor
In the event of difficulties in determining the ownership structure of a business partner through available registers, another method of checking it within the framework of economic intelligence is to directly request confirmation from them of who their ultimate beneficiary is. Of course, to authenticate the given response, one can ask the Austrian entrepreneur to provide documents confirming their declarations.
Polish and EU registers
In the bulletin of public information of the Ministry of Entrepreneurship and Technology, as the minister responsible for the economy, a register of representations of foreign entrepreneurs is maintained. If we find our contractor’s representation in this register, we can assume that it still exists and conducts business.
Another such register in which a contractor can be checked is the European Union VAT taxpayer register and the EORI register. Companies and individuals wishing to conduct business activities within the Union must use the EORI number as an identification number in all customs procedures. The VAT Information Exchange System (VIES), a search engine operated by the European Commission, allows checking whether a given entity is registered as making intra-Community transactions. This is essential, among other things, to apply a 0% VAT rate to a given transaction. If VIES does not confirm the registration of the contractor, a verification request can be made to the tax office of the country where they are based. It is also worth checking whether the company has the required permits and certificates if they are required in a given country. The Register of Insolvent Debtors allows you to check whether a given contractor is on its list. There are also economic information offices that have detailed information about the activities of companies. BIK, the Credit Information Bureau, established by the Polish Bank Association, collects data on the credit history of bank customers, credit unions, and also non-bank loan companies.
Austrian Company Registries
The official Austrian commercial register is maintained by the local courts, specifically the district courts (Commercial Court in Vienna, Regional Court for Civil Matters in Graz in Graz). It is used for registering and disclosing facts that are subject to entry according to the law. The register consists of the so-called main book (actual company register), which contains entries into the register, and a collection of documents storing the documents on which entries into the commercial register are based, such as the company’s agreement or balance sheet.
The following legal entities are entered into the commercial register: sole proprietorships, partnerships, limited partnerships, joint-stock companies, limited liability companies, commercial and industrial cooperatives, mutual insurance companies, savings banks, private foundations, European economic interest groupings, European companies (SE), European cooperatives (SCE), other legal entities whose registration is provided for by law.
Each legal entity is assigned a number in the company register, consisting of digits and a check letter. The register can be searched for a fee through the JustizOnline service. Further options for querying the company register can be found in the menu on the right-hand side in the section Querying the Company Register: https://justizonline.gv.at/jop/web/firmenbuchabfrage.
firmenbuch.at is a commercial company register that allows you to search for companies by registration number or company name. Extracts from the company register and annual financial reports can be ordered: https://firmenbuch.at/.
FirmenABC, another commercial company database, provides the registration number of the company, UID number, names of representatives, date of establishment, sales, and number of employees for free: https://www.firmenabc.at/.
WKO, the Austrian Chamber of Commerce portal, contains a directory of information about over 593,000 Austrian companies: https://firmen.wko.at/SearchSimple.aspx.
Better to Thoroughly Check the Contractor
Before entering into transactions or establishing cooperation with an Austrian contractor, it is better to conduct economic intelligence and thoroughly check them, especially to ensure they are not associated with Belarus or Russia. Violating the bans imposed on specific types of transactions with these countries and certain individuals and companies can result in financial penalties of up to 20 million PLN and imprisonment ranging from 3 to 15 years. Furthermore, verifying the contractor and exercising due diligence in their selection is a requirement that always applies to conducting business activities, incumbent upon entrepreneurs as professional market participants.
Do you already know how to check a company from Austria? If not, or if you need to find more detailed information, we can help. Feel free to contact us.