Financial Police uncover systematic social security fraud involving letterbox companies
The Financial Police within the Anti-Fraud Office (ABB) is taking action against a new form of social security fraud through intensified targeted checks. The focus is on sole proprietorships (EPUs) set up in Austria by individuals from neighbouring EU countries without actually commencing any business activity in Austria.
In this form of fraud, companies are increasingly being registered at mere office addresses. Often, numerous other newly established companies are located at the same addresses. In reality, these company addresses are vacant and serve merely as a formal postal address or for the forwarding of documents. The entrepreneurs themselves do not reside in Austria and do not carry out any discernible business activity here.
Once a trade licence has been obtained and there has been a disclosure of a domestic registered address, the Social Insurance for the Self-Employed (SVS) includes the individual in the compulsory insurance scheme. This is calculated on the basis of the minimum contribution threshold for the first three years. For around 150 euros a month, the individuals concerned thus gain access to accident, health and pension insurance, as well as to the Austrian social security system. Subsequently, they can claim family allowance, maternity allowance or co-insurance for family members.
The Anti-Fraud Act 2025 has significantly strengthened cooperation with the SVS. The SVS has been explicitly included as a cooperating body in the Social Fraud Prevention Act and thus gains access to all proceedings concerning bogus companies. At the same time, it has been stipulated that individuals insured via a bogus company under the SVS may be retroactively excluded from compulsory insurance. Previously, this provision applied only to those insured under the ASVG. In addition, sole traders without employees can now also be identified as bogus companies.
This package of measures enables effective action to be taken against social security fraud in the sole proprietorship sector. The Financial Police have already identified more than 200 companies where no discernible business activity has been undertaken, but which were established by foreign nationals not resident in Austria in order to obtain insurance and social security benefits.
“As Finance Minister, combating tax and social security fraud is a particular priority for me. Above all, for reasons of fairness. This case clearly demonstrates why measures are being implemented on an ongoing basis. The fight against fraud must constantly evolve, as the forms of fraud themselves continue to evolve,” said Finance Minister Markus Marterbauer.
These suspected cases are now being investigated as part of targeted checks. If the legal requirements are met, the companies will be formally designated as bogus companies by means of an administrative act, a decision. Once the decision becomes legally binding, not only will future entitlement to benefits be lost, but benefits already received may also be refunded . Furthermore, in close coordination with the BMI’s SOLBE task force, it will be assessed whether the facts of the case constitute social security fraud and whether a criminal complaint should be filed.
This procedure may also have consequences for landlords of such ‘office addresses’. Especially if a so-called ‘all-inclusive package’ has been offered – such as an office location, business registration and dealing with the authorities – involvement in the fraud may be considered. Depending on the circumstances, they may be held liable as accomplices or even as principal offenders.