Tl;dr
- The Startup Promotion Act and the Flexible Corporations Act (FlexKapGG) became effective from January 1, 2024.
- These laws aim to enhance Austria’s appeal as a startup and venture capital hub.
- No material changes were made from their initial drafts.
- So far, around 35 FlexCos were registered in the Austrian companies register, whereby most of them seem to be shell entities incorporated by law firms.
Start-Up Promotion Act and Corporate Law Amendment Act Enacted
The Austrian parliament passed two pieces of legislation at the end of December 2023, which came into effect on January 1, 2024; the Startup Promotion Act and the Flexible Corporations Act (FlexKapG). Both are aimed at enhancing the attractiveness of Austria as a hub for startups and venture capital investments. Compared to the initial drafts, only editorial changes were made. For a closer look at these legislative changes, take a look at my previous article here.
The official texts of these acts were published in the Austrian Federal Law Gazette (Bundesgesetzblatt) on January 2, 2024, under the references BGBLA_2023_I_200 for the Startup Promotion Act and BGBLA_2023_I_179 for the FlexKapG. Additionally, the current version of the FlexKapG can be accessed here.
Conclusion
As of mid-February, around 35 FlexCos have been registered with the Austrian companies register (some of these registration were made by other Austrian law firms for experimental purposes → see here and here). A seemingly small number compared to the roughly 200.000 limited liability companies registered in the Austrian companies register.
My personal FlexCo success projection: After a first cautious phase, the FlexCo will eventually become a popular legal form in Austria. Main drivers for this development will be (i) flexible options on capital measures, (ii) easier decision making on shareholder level and (iii) easier transferability of shares. I am skeptical, however, whether the new employee participation will be accepted in practice. The information rights for employees seem to be too extensive so that currently popular forms of employee participation (ie VSOPs) will remain to be popular among startups.
Sources (possibly credible sources I kind of fact-checked)
Startup Promotion Act – Austrian Gazette (Bundesgesetzblatt)
Corporate Law Amendment Act 2023 – Austrian Gazette (Bundesgesetzblatt)
Flexible Kapitalgesellschafts-Gesetz (FlexKapGG) – Legal Information System of the Republic of Austria (RIS)
My latest reads / listens
Guest Series | Dr. Paul Conti: How to Understand & Assess Your Mental Health – Huberman Lab
Mental Models: The Best Way to Make Intelligent Decisions – fs blog
Quote(s) that sticked to me
“Technology alone is not enough. It’s technology married with the liberal arts, married with the humanities, that yields the results that makes our hearts sing.“
— Steve Jobs
Coffee fact (Water makes the beans go round)
A recent study revealed an intriguing phenomenon occurring during the coffee grinding process: When coffee beans are ground, they accumulate surface charges due to triboelectrification and fractoelectrification – essentially, they get charged up from all the friction and breaking apart during grinding. This isn’t just a quirky science fact; it negatively impacts coffee production at all scales, from your home coffee grinder to big industrial machines.
The reason these charges affect coffee production is that they can lead to uneven grinding and inconsistent flavor extraction. The static charge causes the coffee grounds to stick to the grinder and each other, resulting in uneven particle sizes. This can affect the brewing process, as different sizes extract flavor at different rates, potentially leading to a less balanced and less enjoyable cup of coffee.
For all the despaired coffee afficionados out there: There is a quick fix! Water passivates the electrical charges. Through the inclusion of small amounts of external water, the coffee effectively declumps and suppresses charging during grinding. Before grinding your beans, sprinkle a tiny bit of water on them. This small step can help reduce the static charge that builds up, making for a smoother grinding process and possibly even enhancing the flavor of your coffee. For exact dosages, check out the study.
Disclaimer: While I’m a lawyer, who enjoys re-defining lawyering and operating outside the conventional law firm setting, please always consider that I’m not your lawyer. Nothing presented herein constitutes legal advice or establishes an attorney-client relationship. Blog posts on this website have been prepared for information purposes only. Any information is merely a generalised analysis of certain issues raised by particular events or statutory developments. If you have legal concerns that you wish to have addressed, please contact a lawyer directly so that your specific circumstances can be evaluated. The views expressed in this blog are mine alone.