BUSINESS IN AUSTRIA

Austria, a small European country, occupies a favorable geographical position in the central part of Europe and serves as a kind of transport bridge between East and West. This promotes business development and strengthens cooperation with neighboring countries, especially Germany, Italy and Switzerland, which account for almost half of Austrian exports.

Business in Austria

Austria is one of the most prosperous countries in the European Union, with a high standard of living, dynamic and stable economic sectors, both in services and industry. The agricultural industry is based mainly on the use of high technology, and thus ensures minimum production costs.

Business immigration to Austria has a number of advantages, not only due to the comfortable investment climate and transparent legal system, but also as a way to move to a developed country for permanent residence, with further prospects of obtaining Austrian citizenship. The country has moderate unemployment and inflation, a highly educated workforce and a stable level of purchasing power.

How to start a business in Austria

In the Doing Business report on the ease of starting and running a business Austria ranked 27th out of 190 countries, for example, ahead of Switzerland and France. When choosing a place to register a company, many foreigners prefer Austria even more than Germany.

The bureaucratic mechanism and sometimes excessive requirements of German officials to foreign businessmen are more than compensated in the neighboring country. A common border and one language, and as you know, the official language of Austria is German, will allow you to go far beyond the Austrian market.

European citizens can open a business in Austria on an equal footing with locals. Representatives of third countries (from outside the EU) must first obtain an Austrian residence permit. For example, on the basis of official employment in Austria or reunification with close relatives.

A good support for registration in Austria the status of permanent resident will be a diploma of an Austrian university, moreover, education in this country is almost free and is considered one of the most prestigious in Europe. As an option, you can do business in Austria remotely, for example, together with an Austrian business partner or an EU citizen.

Business culture in Austria

Success in starting and realizing any foreign business largely depends on personal contacts and the ability to establish business connections. Austria is no exception. To get started, you will need a minimum theoretical knowledge of Austrian business culture. Let's outline the main points.

  • Punctuality. The precision of the German mechanism of business life is fully applicable to Austria. Come to meetings in advance, 5-10 minutes in advance. In case of lateness, be sure to call and warn, and do not forget to apologize.

  • Gifts. Super expensive things intended as a presentation for business partners, especially in the field of art or antiques, leave them at home. It is not customary to give expensive gifts in Austria. It is better to limit yourself to a bottle of good wine and a bouquet of flowers.

  • Dress code. Here there are no special differences from other civilized countries. Neat and conservative clothes are welcomed, for men – a dark suit, white shirt and tie, for women – a business suit or dress, without extra frills.

  • Hierarchy. Despite the fact that personal initiative and the ability to make independent decisions by individual employees of Austrian companies is only welcome, you should not forget about subordination. Orders of managers and senior managers must be strictly obeyed.

  • Language. For independent full-fledged business negotiations it is desirable to know German. English is also widely used.

To register a company in Austria, especially if the person is indicated as a private entrepreneur or director/manager, a foreigner will need to provide the following personal information:

  • Surname, first name;

  • Date and place of birth;

  • Residential address;

  • Social Security number.

In addition, the following conditions must be met:

  • Having a residence permit in Austria;

  • Being of legal age;

  • No criminal record;

  • Experience and qualifications in the field of the business to be opened.

Procedure, terms and cost of company registration in Austria

Company registration in Austria

  1. Confirmation from the Economic Chamber of the Austrian Ministry of Finance (ECAMF) that the company to be incorporated is in fact a new company. This procedure is not always compulsory, but can help to exempt certain types of taxes in the future. It is done within one day and free of charge by filling in a special form (NeuFö2) on the official ECAMF website.

  2. Certification of the company's articles of association by an Austrian notary. The document specifies the unique name, field of activity, total amount of capital and initial contributions of shareholders, as well as personal information about the directors and shareholders of the company. The procedure takes a few days, the cost depends on the particular notary, usually around 75 euros.

  3. Confirmation of opening an account in an Austrian bank and depositing the minimum amount of authorized capital.

  4. Registration of the company in the local Austrian court (Handelsgericht). For this purpose a special application and copies of the above mentioned documents are submitted, also samples of signatures of directors of the company will be required. The process can take up to 7 days, the cost is 32 euros.

  5. Registration with the tax authorities. After that, the company will be assigned an identification code and a VAT payer certificate. The procedure is free and takes up to two weeks.

  6. Registration in the trade register (Gewerbeanmeldung) with a special trade authority (Bezirksverwaltungsbehörde). Usually conducted electronically within one day and free of charge.

  7. Registration of the company with the municipality and the employees with the social security authorities. This is done free of charge within a day.

Forms of ownership in Austria

The choice of ownership form when registering a company in Austria will be crucial for the future operation of the business. Depending on the objectives, number of owners, area of activity, financing and other factors, Austrian legislation offers a wide list of ownership forms. Let us highlight the main ones and the most popular among foreigners.

  1. Joint Stock Company (Aktiengesellschaft). Suitable for realization of large business projects on the Austrian territory. The minimum amount of authorized capital, which is divided into a certain number of shares, is equal to 70 thousand euros.

    The liability of shareholders for the obligations of the firm is not established. There are no requirements for the number of owners, but the supervisory board of the company must have at least 3 representatives.

  2. Limited Liability Company (Gesellschaft mit beschränkter Haftung). The most popular form of ownership for business in Austria. The minimum requirements for the authorized capital – 35 thousand euros, half of which must be in the account of a banking institution, and the remaining part may be in the form of other assets.

    At the same time, the first 10 years after the registration of the company is allowed authorized capital of 10 thousand euros and, accordingly, 5 thousand in the bank account. The company can be registered on one or more persons, with liability for obligations limited to the amount of contributions to the share capital, and each share must have a nominal value of at least 70 euros.

In addition to the above-mentioned forms, local laws allow the opening of various types of partnerships, branches of foreign companies or private entrepreneurship. Local lawyers and experts should be consulted to choose the most effective form of ownership for a company in Austria.

Taxes in Austria

Austria's tax system and the rates of the main taxes have undergone some changes in recent years. For example, the tax on income from immovable property has increased from 25 to 30% and the tax on capital gains (interest, dividends) from 25 to 27.5%.

Rates of Austria's main taxes in 2023

Income tax. Progressive rate from 25 to 55%. In this case, income of less than 11 thousand euros is not taxed at all, and the rate of 55% applies to income over 1 million euros per year.

Income tax scale in Austria (euros per year)

  • Annual income up to 11,693 euros – 0%

  • Annual income from 11,694 to 19,134 euros – 20%

  • Annual income from 19,135 to 32,075 euros – 30%

  • Annual income from 32,076 to 62,080 euros – 42%

  • Annual income from 62,081 to 93,120 euros – 48%

  • Annual income from 93,121 to 1 000 000 euros – 50%

  • Annual income over 1,000,000 euros – 55%

Corporate income tax – 25% (from 2023). At the same time, even loss-making companies are obliged to pay a tax of at least 1750 euros.

VAT. The basic rate is 20%.

Reduced rates:

  • 13%. Tickets for sporting and cultural events, wine production, hotel room rentals, agricultural goods.

  • 10%. Food, medical products, printed publications and books, public transportation fare.

  • 0%. Domestic and international transportation (excluding road and rail transportation).

Business destinations in Austria

The most popular direction for opening a business in Austria, including foreigners, is still considered to be the tourism industry. Every year the country is visited by tens of millions of people, which provides about 10% of the country's budget revenues. However, in this small Alpine state, with incredibly beautiful nature, operate thousands of travel companies. Therefore, competition in this area is prohibitive.

In fact, the Austrian economy is quite diverse, ranging from the agricultural and wine-making sector to heavy industry and the financial services market. Successful business immigration to Austria will require a serious analysis of the local market and attention to industries with special licensing rules.

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