Doing business in Austria
- How quickly can I set up a business?
- What is the minimum investment needed?
- How can I raise finance?
- What are the legal requirements for setting up my business?
- What structure should I consider?
- What advice can you give me in regards to payroll and taxation requirements?
- Is there anything else that I should know?
How quickly can I set up a business?
The process of setting up a business is dependent on the legal form.
On the average it will take between one and two months to set up a business in Austria.
What is the minimum investment needed?
Private limited company (“GmbH”): Minimum share capital € 35.000 (17.500 paid in cash)*
*Foundation privilege: For newly founded private limited companies it is possible to have a minimum share capital of € 10.000 (5.000 paid in cash). Within 10 years, the share capital has to be increased to € 35.000.
Public limited company (“AG”): Minimum share capital € 70.000. (at least 25% paid in at founding).
Partnerships: no minimum investment needed.
How can I raise finance?
Debt instruments: Loans of banks and other third parties or loans of shareholders.
Equity instruments: contributions of shareholders or private equity companies/business angels
What are the legal requirements for setting up my business?
Corporations and establishments of foreign companies have to be registered at the Austrian commercial register.
The founding acts of private and public limited companies must be attested by a notary public.
Both establishments and limited companies must file annual statements prepared under Austrian Commercial Code (UGB) and in German language at the Austrian commercial register
What structure should I consider?
Most common: Private limited company (“GmbH”).
Establishments (of foreign companies) require at least the same tax and filing obligations as private limited companies.
What advice can you give me in regards to payroll and taxation requirements?
Located in the heart of Europe, at the gate to Southeast Europe, a stable political structure and attractive tax regulations for groups, Austria is an attractive location for regional headquarters of foreign companies. Distances between larger cities are very short. The infrastructure for public and private transport is perfect all over the country.
Personal Income Tax/Payroll Tax: From 0% to 55%, progressive.
Current Social Security rates (including health insurance, accident insurance, unemployment insurance and pension insurance) are:
18,12 % of gross wage/salary for employee
21,23 % of gross wage/salary for employer
Wages and salaries are subject to additional taxes and fees for employers:
Employer Contribution to the Family Compensation Fund:
3.9% of the wage bill (gross salaries and wages).
Employer Contribution Surcharge:
Percentage rates vary between 0.34% and 0.42% of the wage bill.
3% of the wage bill.
Contributions to Employee Pension Funds:
1.53% of the wage bill for all employment types
Tax / Regulatory / Reporting:
Current Corporate Income Tax (CIT) rate in Austria: 25% (to be decreased to 24% by 1 January 2023 and 23% by 1 January 2024).
Tax loss carry forwards are not limited. The offset against taxable profits is limited to 75% of taxable income.
All permanent establishments of foreign companies are subject to 25% CIT of the profit of the PE.
Accounts of private limited companies: require auditing if individual financial statement shows Revenues > € 10m and/or gross Assets > €5m and/or the company has more than 50 employees (2 of 3 criteria to be fulfilled. Moreover all group financial statements have to be audited and all public limited companies have to be audited.
Is there anything else that I should know?
The Austrian group taxation regime allows the cross-border use of losses (of foreign subsidiary corporations from EU countries or countries providing exchange of information according to Art. 26 OECD Model Tax Convention). Losses (in the proportion of the shareholding quota) of non-Austrian subsidiaries (fulfilling criteria as stated above) may be used for offsetting taxable profits of the Austrian group parent if the Austrian group parent holds more than 50% of the shares and voting rights in the subsidiary. If losses are offset at the foreign subsidiary subsequently, they must be added to the Austrian profit in the respective year.
Furthermore, Austrian companies can apply for a 14% bonus of their research and development expenses
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