Even in good economic times, deals of this magnitude don’t happen every day; in 2009, the year of the crisis, such deals had to be looked at with a magnifying glass. In April, Austrian energy giant OMV received a whopping 1.4 billion EUR from Russia’s Surgutneftegas for its 21.2 percent share in the Hungarian company MOL. The mega deal was completed in just a few weeks, and thanks to a highly professional team of lawyers from CHSH Cerha Hempel Spiegelfeld Hlawati, who skillfully settled the difficulties between quarrelling former partners OMV and MOL. Peter Vcelouch, partner at CHSH: “We have been active as a law firm in the Eastern European market for over 15 years. Our first office in the East was opened in Budapest. For this reason, we know the locally active national and international companies as well as the mindset of business owners.”

Cross-Border Partnerships

Klaus Fischer and Jakob Bleckmann from Vienna based law firm Gassauer-Fleissner are also very familiar with the Hungarian mindset. Founded seven years ago, the law firm is now considered internationally amongst the most recognized M&E specialists in the CEE region, as well as one of Eastern Europe’s most renowned real estate law firms. Gassauer-Fleissner also accompanies Asamer Group in their “Eurovegas” project. Jakob Bleckmann: “On 335 hectares near the Austrian border, five casinos, an entertainment park and various hotel facilities are being developed.” For this project, Asamer partnered with Salzburg based real estate developer Supersberger and “Hard Rock” Group from the USA. Financial advisor for Eurovegas is Credit Suisse Los Angeles, the world’s largest entertainment financer. The tricky legal situation (aside from real estate law, the complex gambling laws of the EU and Hungary also need to be taken into consideration) is familiar terrain for the experts. Fischer: “We are very active in the international hotel business and therefore know all the companies involved. Through our many years of work in Eastern Europe, we have established a good network with partner offices in many countries. This way, we can always offer our clients the best specialists on site.”

Pioneer Spirit brought Advantages

An early entry into the prospering markets of Eastern and South-Eastern Europe and a similar mindset to the countries of the former Habsburg monarchy are the main advantages that give Austrian law firms and tax advisory offices a strong edge in countries such as Hungary, Croatia, Belarus, Slovenia, Slovakia, the Czech Republic, Serbia, Romania, Bulgaria and Ukraine. That pioneer work is paying off today, confirms Klaus Bauer-Mitterlehner, expert for Eastern Europe at the renowned tax consultancy firm TPA Horwath, which has been active in Eastern Europe since 1993. Bauer-Mitterlehner: “Looking for staff was a real adventure back then. But we were so fortunate to find very dedicated employees in all the countries within a short time, and with whom we were able to accomplish growth in the respective regions in the high quality desired by us.” Today, they rank fifth in the Austrian tax consultancy market and are represented at 24 locations in Austria and the CEE region. By now, 400 of TPA Horwath’s approximately 900 employees are working in Eastern Europe.

Growth with the Clients

Most law firms and tax consultancy offices have grown into the east together with their western clients. CHSH partner Vcelouch: “We have started the expansion into Eastern Europe with large Austrian companies such as OMV, who we accompanied on their path to Hungary and Romania by opening our own local offices. Today, more than half of our clients are international companies who come to us because of our experience and our strong local presence.” Even in times of crisis, CHSH further secured their advantage since last year by opening new offices in Timisoara, Minsk and Sofia. The tax advisory office of Hübner + Hübner, who have been successfully active in Eastern Europe for three years due to the acquisition of Interbilanz Group, is also showing great staying power. Klaus Hübner: “Together with our clients, we now need to persevere in the various countries; after overcoming the trough brought on by the crisis, our services will certainly be in great demand again in the upcoming times of economic upswing.”

At the Centre of the Action

Vienna based law firm CMS Reich-Rohrwig-Hainz, which operates its own offices in 15 Eastern European countries, also relies on local presence, even though they only started their expansion as late as the year 2000. Today, CMS is represented in all countries of Eastern and South-Eastern Europe except Belarus and Moldova. Gregor Famira, real estate specialist at CMS: “During the expansion phase, we always had an equity partner from the Vienna head office on site; today, we rely on local directors, who are strongly involved in what’s happening at head office. The competence centre for international contract law is located in Vienna.” Hübner + Hübner are also relying on a system of subsidiary companies. Klaus Hübner: “Our client base consists of medium-sized enterprises, many of which have also taken advantage of the opportunities in Eastern Europe at the right time. We serve them with our own local subsidiaries. The Vienna head office is always actively involved.” Tax specialists Leitner & Leitner also share this philosophy. The tax consultants are currently represented with their own offices in Bratislava, Linz, Ljubljana, Prague and Zagreb and – since last year - Bucharest. In addition, Leitner & Leitner are operating a department for Russia in Vienna, with experts who have specific know-how about this challenging market and can attend to clients regarding all national and fiscal matters, even in Russian.

Cooperations & Networks

The law firm of Dorda Brugger Jordis (DBJ) relies on a different strategy for the East. Instead of own offices, DBJ initiated the “Best Friends” programme, where they work in close cooperation with leading independent law offices in Eastern and South-Eastern Europe. Stefan Artner, expert for Eastern Europe and real estate at DBJ: “Since 2002, we have close personal partnerships with local lawyers in almost all countries of the former Eastern Bloc. We don’t want to be seen as a big Eastern-European law firm, but as legal advisors with suitable local specialists.” DBJ’s clients continue to have their familiar contact person at the Vienna office that is supported by local Best Friends offices with profound regional expert knowledge. Consulting specialist Deloitte Touche Tohmatsu (DTT) takes a similar approach. Their system operates with individual companies in a global network. In Central and Eastern Europe, there currently are 17 Deloitte partners with 4,000 employees. Austria is part of the network, but does not have shares in the individual partner companies in the other countries. Bernhard Gröhs, Member of the Board at Deloitte Austria: “That is no disadvantage for us, as we work according to globally uniform quality standards and support each other through the DTT network.” According to Gröhs, the cooperation flows smoothly, especially regarding transactions, asset management and real estate fund consulting.

Number One Contact Point

for Activities in the CEE Region

Whether through a partnership-oriented network or subsidiary offices, Austria’s law firms and tax advisory offices remain the number one point of contact for internationally active companies when it comes to establishing a head office for the CEE region or expanding into the Eastern European markets. The highly advantageous tax situation for business owners in Austria also contributes to this. Tax consultant Joseph Böck from Böck & Partner: “The group taxation system, the revenue friendly Austrian foundation law and the non-existent wealth tax make Austria an attractive location.” Due to the complexity of the Austrian tax and duty law, however, he strongly suggests to enlist adequate consulting services from experienced advisors.[ CN ]