The Republic of Austria has never been an offshore zone or a tax haven. The main advantage of Austria for foreign entrepreneurs lies elsewhere. It is a prosperous European country with a stable political system, strong economy and working laws. Here, a businessman is guaranteed to get the results he needs if his entrepreneurial spirit is backed up by innovation and hard work.
We can highlight the 5 most important benefits of incorporating a company in Austria:
The Republic of Austria is located in the heart of Central Europe. It shares borders with 8 countries, including the Czech Republic, Slovakia, Hungary, Slovenia, Italy, Liechtenstein, Switzerland and Germany. Opening a company in this country provides a businessman with unhindered access to the EU single market.
Austrian companies are able to trade freely in other EU countries, benefiting from the free movement of goods, services, capital and skilled labour. This is facilitated by a well-developed transport infrastructure as well as a simplified procedure for bringing an Austrian company to the foreign market. For example, by registering for VAT in Austria, an entrepreneur automatically receives an EU VAT payer number.
According to the IMF in 2024 Austrian GDP per capita at purchasing power parity is $73,051. This is the 16th best result in the world. The unemployment rate in this country is relatively low: in the second half of 2023 it was only 5.9 per cent.
Austria’s participation in international organisations such as the WTO, OECD and IMF ensures that your company will operate in full compliance with the highest international business standards. Your company in Austria will be able to successfully implement long-term business projects and achieve its objectives consistently, without external shocks.
Registering a company in Austria gives the entrepreneur access to a skilled labour force. Austrians attach great importance to quality education and professional training. Every year Austrian universities and colleges graduate thousands of specialists.
By opening an office in this country, you will be able to hire competent staff to help take your business to the next level.
Austria offers a favourable business environment with transparent regulations, efficient administrative procedures and a sound legal system. In a country with a rule of law and a well-functioning judiciary, entrepreneurs are provided with legal certainty and protection.
A special mention should be made of the Austrians’ responsible approach to protecting the intellectual property of companies, be it technology, innovations, trademarks or copyrights. Austria has robust laws governing the registration and protection of intellectual property rights, which guarantees job security for those entrepreneurs who offer fundamentally new products and services to the market.
In addition, the Austrian government actively supports businessmen and foreign investors by providing private enterprises with tax incentives and the opportunity to receive grants.
Austria’s advanced business infrastructure includes modern transport networks, efficient logistics facilities and advanced telecommunication systems. Together, these ensure seamless connectivity both within the country and across Europe, enabling Austrian companies to establish reliable supply chains, efficiently access markets and promptly fulfil customer needs.
When choosing the right legal form to launch your business, don’t forget that Austrian business organisations may not have the same registration process, licensing and tax obligations as similar entities in your home country.
For this article, Imperial & Legal team has prepared a short overview of the most popular types of companies in Austria.
The abbreviation AG or Aktiengesellschaften is used to denote this type of company.
An Austrian AG is a legal entity separate from its owners. A joint-stock company can enter into contracts and acquire tangible assets in its own name. In the event of bankruptcy, its shareholders risk losing only their investment in the company (acquired shares), unless they have additional obligations described in the articles of association.
An AG can equally be a public company or a closed company issuing only registered shares. In the latter case, the firm is obliged to keep a register of its shareholders. Among other things, a joint-stock company has the right to issue bearer shares, place them on the stock market and thereby obtain additional investments for the business.
In the process of registering an AG, the entrepreneur must pay a minimum founding capital of €70,000 divided into shares. Shares in Austrian joint-stock companies may have a par value or no-par value. If they have a nominal value, it must be at least €1. An AG can only issue one type of shares.
Austrian joint stock companies are governed by a General Meeting of Shareholders, an Executive Board and a Supervisory Board. During the first 8 months of each new financial year, a General Meeting of Shareholders must be held.
The Executive Board appoints a director of the company. The position of director may be held by one of the shareholders or by a hired professional. However, if the business activities of an Austrian company are state regulated, the director of such a company will have to have the appropriate professional qualifications.
Joint-stock companies are one of the most popular legal forms with foreign entrepreneurs because Austrian corporate law does not regulate either the nationality or the tax residence of AG founders.
As a rule, at the end of the name of such an Austrian company there is GmbH or GesmbH. It is an abbreviation for German “Gesellschaft mit beschränkter Haftung”.
In a limited liability company, the shareholders are also not fully personally liable for debts incurred in the course of its activities, but they do risk losing their share in the share capital.
An Austrian GmbH can only issue registered shares, so such a company must have a Shareholder Register. The minimum authorised capital of such a commercial organisation is €10,000. Entrepreneurs must pay at least half of this amount before submitting the documents for registration.
An Austrian limited liability company should have at least one founder. The shareholder of a GmbH in Austria can be another company or an individual, including those of foreign origin.
One director is sufficient to run this type of firm. A hired manager or a business owner can be appointed as a director. The management of a GmbH is appointed by a resolution of the shareholders during a general meeting.
This is a relatively new corporate structure for business registration in Austria. It is denoted by the abbreviation FlexKapG from “Flexible Kapitalgesellschaft”. The English-language terms Flexible Company or FlexCo may also be used.
As with the GmbH, FlexCo has a minimum authorised capital of €10,000.
Austrian FlexKapG is more attractive than an ordinary limited company because:
These include primarily general partnerships and limited liability partnerships. The main difference between a partnership and a corporation in Austria is that profits earned at the company level are not taxed, but are distributed to the partners, who in turn pay income tax at their place of residence.
This taxation scheme allows foreign participants in Austrian partnerships to significantly optimise their tax costs. Partners can be both individuals and legal entities of any tax residence.
Another advantage of a partnership over a corporation is easier registration. The Austrian government does not require entrepreneurs to pay the minimum authorised capital of their partnership.
At least two founders will be required to open a partnership. If you register a general partnership, all partners have the right to participate in the management of the firm. All partners in such a firm are fully and jointly liable for its debts.
At the end of the name of the Austrian general partnership is an indication of the legal form – OG from “Offene Gesellschaft”.
The abbreviation KG from the German Kommanditgesellschaft is used for limited partnerships.
Income tax is levied on all corporate income, regardless of the country of origin of the profits, if these companies have a registered office or a managing office in Austria from which the business is managed.
Austrian income of non-resident companies that have neither a registered office nor a managing office in the Republic of Austria is also subject to limited taxation.
23% is the standard Austrian corporate tax rate in 2024.
Austria has a so-called minimum corporate tax – a fixed amount that all corporations, including those whose operating expenses are higher than gross profit, are obliged to pay at the beginning of the financial year. In other words, even if your AG or GmbH is not yet profitable, it will still have a tax liability. If your company is profitable, the amounts paid in advance will simply be deducted from the corporate tax accrued at the end of the fiscal year.
Minimum corporate tax
Also, Austria applies an additional corporate tax rate to those Austrian corporations:
The main purposes for applying this minimum rate are:
If you would like to know how the additional rate of corporation tax is calculated, please contact our advisers.
A 20% value added tax is imposed on goods and services sold in the Republic of Austria. In two regions of the country, Jungholz and Mittelberg, the VAT rate is reduced to 19 per cent.
Reduced tax rates of up to 13 per cent and 10 per cent apply to certain types of goods and services in Austria. Export deliveries and international air and rail transport are exempt from value added tax.
Companies doing business in Austria face a number of other tax obligations, such as:
To find out which transactions in Austria give rise to tax liabilities and how to calculate the amount of a particular payment, contact Imperial & Legal’s tax advisors for help.
The Austrian authorities made the procedure for registering a new company as simple as possible. An application for incorporation in Austria can be submitted online on a special government portal. However, without knowing all the nuances, you will spend a lot of time and money to launch your business. Imperial & Legal specialists can help you overcome bureaucratic difficulties. With competent legal support you will be able to open a company in a reasonably short period and without overpayments.
As an illustrative example, we will take you step by step through the procedure for registering a limited liability company in Austria.
Every Austrian company needs an original name, registered office and business address for incorporation. Usually, the entrepreneurs who contact us offer several ideas for a name for their company, and Imperial & Legal specialists check these ideas for availability and acceptability on the website of the Austrian Company Registry. The tested and approved name is temporarily assigned to the future company for a small fee.
If you do not plan to operate from the Republic of Austria, it will be possible to rent a legal address for registration. Our company provides customers with a registration address as part of our standard comprehensive offer for future Austrian businessmen.
During the preparation process, foreign entrepreneurs hold a founding meeting to finalise the structure of their company, appoint a director and a supervisory board (if necessary).
The agreements reached are recorded in the company documents – articles of association and memorandum of association. If the company is started by one person, a declaration of incorporation is prepared instead of a memorandum. Our staff offers standard forms of incorporation documents in German, but we can draft the articles of association and memorandum of association to suit our client’s business structure.
In addition, during the preparation phase, it will be necessary to collect all the information that must be submitted with the application for registration.
Before the preparation is finished, Imperial & Legal contacts a notary in Austria and arranges a meeting. The management and founders of the company must be present at the signing of the articles of association and the memorandum of association. A member of our staff can come to the meeting with the notary based on power of attorney to represent the interests of the founder if the company is opened remotely.
A company is considered to be incorporated once its articles of association and memorandum of association have been certified by an Austrian notary. However, under Austrian law, it only becomes a separate legal entity when it is registered with the state company registry. Until then, refrain from any commercial transactions so that your liability for debts is limited to your share in the share capital.
The share capital of the GmbH is paid in by depositing funds in a deposit account with an Austrian bank. It is important that the founders’ funds are of legal origin and that the amount deposited is at least €5,000. After the money has been deposited into the account, the financial institution must provide you with a document confirming the payment of the founding capital.
The application for the registration of a GmbH together with a package of accompanying documents and a receipt for the payment of the registration fee can be sent by post by a lawyer or a notary to the Commercial Court of the region where your registered office is located. Most entrepreneurs prefer another, faster and cheaper way – filing online through the government system of electronic legal transactions (ERV).
The Commercial Register usually takes no more than 10 days to make a decision. Your company is then entered in the Austrian Companies Register. From this moment on, your company is considered fully registered and you will receive the corresponding state certificate.
As a rule, after registration in the Companies Register, foreign businessmen continue their partnership with our consultants. Our specialists will help to set up the company’s tax registration, obtain the necessary licences, optimise taxes and prepare for the first corporate reporting.
Establishing and Supporting International Businesses: Your Guide to Global Expansion
Foreign firms are allowed to register branches in Austria. The Austrian unit can be 100 per cent owned by foreign tax residents.
The Austrian branch does not get a status of a separate entity, so the parent company abroad is responsible for all debts arising from its operations.
If a branch office is opened by a foreign company from a country outside the European Economic Area, a permanent legal representative must be appointed from among citizens and permanent residents of the Republic of Austria.
The amount of the registration fee depends on the type of company to be opened and the method of application:
Your application must contain at least the following information:
You may need the following documents to register a GmbH or AG in Austria:
How to start a business in Austria? Which type of company to choose? What opportunities this jurisdiction offers? What taxes a company will have to pay?
Offshore companies
Worldwide business support
European Citizenship Programs