Fintech Market Overview

This article does not constitute legal advice.

Fintech in Austria


The FMA's 'regulatory sandbox' came into effect on 1 September 2020. This offers fintech companies unique advantages, such as more lax licencing requirements than those applied to other market participants. They also have to meet certain disclosure and cooperation obligations with the FMA. The scheme is intended to streamline the process for fintechs to become regulated entities, making it easier for them to obtain an unrestricted financial services licence if their trial period proves successful.1

The FMA Sandbox is generally seen as a positive move, however the extent of benefits to be gained by fintechs versus the associated burdens must be evaluated. Fintechs can use the sandbox environment for testing their business model, but since this will involve supervision from the FMA and access to technology must be given to them, obtaining a temporary licence subject to licensing requirements may not always be the best option. Depending on what type of business they run, fintechs should give serious consideration to other methods such as obtaining a traditional license from the FMA - which may result in less restrictive monitoring from the regulator.1

Apart from the FMA Sandbox, in order to provide market participants with increased legal security, the FMA has developed the FMA FinTech Navigator. This online platform allows fintechs to contact the FMA with any regulatory-related queries, for example if a new venture could require a licence under Austrian law. Additionally, via a question and answer format, businesses can verify whether standard models meet supervisory requirements.2

The FMA tends to be supportive when approached in a respectful and constructive manner. Nonetheless, the response times have lengthened of late and its examination has become stricter depending on the business model. If the FMA finds any such setup to be subject to licensing demands, then fintechs had better investigate further possibilities of a collaboration with licensed agents (might serve as fronting banks) or look into white-labeling.1

In addition, fintech companies do not currently receive any special tax incentives. However, fintech start-ups will receive the same incentives as other start-ups. These incentives apply, inter alia, when companies are newly founded and the primary benefit of these incentives is relief from certain statutory taxes and stamp duties. Fintechs and start-ups can also get support (both financially and in terms of support) from a number of institutions.3

If the activities are not regulated and the products do not constitute financial instruments or securities, special restrictions on marketing fintech services generally do not apply. If regulated services or securities and financial instruments are involved, restrictions will apply. For fintech companies, it is important to research the marketing restrictions that may apply to their particular use case. In Austria, cold calling and email marketing are strictly prohibited. Emails may not be sent for direct marketing purposes, except in some cases (e.g., where the receiver has consented or where a previous business relationship exists).1

There is no general rule prohibiting a website that compares different financial products. However, there is a thin line between comparing the features of regulated products and offering or marketing them. It is important for website operators to pay attention to the marketing rules contained in various legal acts relevant to financial products, such as the Securities Supervision Act 2018, the Investment Fund Act, and the Central Management Agency.1

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Fintech in other countries

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Austrian Fintech Lawyers

Viacheslav Losev

Viacheslav Losev

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Silvia Calls

Silvia Calls

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Kristina Berkes

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  1. https://thelawreviews.co.uk/title/the-financial-technology-law-review/austria
  2. http://www.fma.gv.at/en/cross-sectoral-topics/fintech-navigator/
  3. http://www.aws.at/en/
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