The Republic of Austria is a highly developed country located in the heart of Europe. Austria is known for its stable economic and political situation. In addition, the Austrian government is committed to promoting business development and creating attractive conditions for doing business. This is evidenced, for example, by the attraction of investments, the reliability of the banking system, and the optimization of taxation. Thanks to the above, Austria has gained a high international prestige and reputation as a country that offers entrepreneurs ample business opportunities.
Advantages of registering a business in Austria
- advantageous geographical location;
- the country is a member of the European Union and is not on any blacklists;
- open access to European markets;
- a wide range of agreements on the avoidance of double taxation and the availability of business benefits;
- high-quality and transparent legislative framework;
- the possibility of registering a company in a remote format;
- no residency requirements for directors and secretaries.
The first step in the registration process is to choose the form of company. In particular, Austrian law provides for the following main forms:
- Sole proprietorship (Einzelunternehmer)
- General partnership (Offene Gesellschaft – OG)
- Limited partnership (Kommanditgesellschaft – KG)
- Limited liability company (Gesellschaft mit beschränkter Haftung – GmbH)
- Joint-stock company (Aktiengesellschaft – AG)
The two most common legal forms of legal entities are GmbH and AG.
A GmbH is a legal entity whose share capital is divided into shares (contributions) of its members. The company has its own legal personality, and the shareholders are not liable for the company’s obligations beyond their own contributions. An AG is a joint-stock company, so the contributions of its members (shareholders) are shares.
Features of the GmbH
- Suitable for small or medium-sized businesses.
- The minimum share capital is EUR 35,000 (half of which must be paid in at once). The share capital can be contributed in cash and/or in kind. However, at least half of the share capital must be contributed in cash. The minimum shareholder contribution is set at EUR 70.
Since 2014, foreign investors have been entitled to a preferential regime called “Founder’s Privilege” (Gründengsprivilegierung), which allows them to set up a company with a share capital of EUR 10,000. Under these conditions, the rule also applies that half of the share capital must be paid in at once, but the share capital can only be paid in cash. The “founder’s privilege” is granted for 10 years.
- The founders of a GmbH must include at least one individual. Legal entities may also be members of the company.
- A company must have a director. However, if 1) the share capital exceeds EUR 70,000 and the number of shareholders is more than 50, or 2) the company employs more than 300 people, a supervisory board must be formed.
- The company’s charter must specify the name and address of the company’s office, the purpose of its activities, the amount of the share capital and the amount of contributions of each of the shareholders.
Features of the AG
- Suitable for large businesses.
- The minimum share capital is EUR 70,000 (a quarter must be paid in immediately). The minimum share size is EUR 1. Both ordinary and preference shares are allowed.
- AG must have at least two founders (both individuals and legal entities can be involved). Information about shareholders and beneficiaries may be confidential and not disclosed.
- The company must have a director.
- The company’s charter must specify the name and legal address of the company, the type of activity of the company, the size of the authorised capital, the types of shares, the number of shares and their nominal value, and the composition of the board.
A registered company must have a unique name, at the end of which the legal form of the company is indicated.
Stages of company registration
- selection of the legal form of the company;
- selection and approval of a unique name;
- obtaining a certificate stating that the company is in fact a new company;
- announcement of the establishment of the company;
- drafting, notarising and registering the charter;
- opening a bank account and depositing the charter capital;
- registration of the company in the commercial register;
- registration in the tax register and obtaining a tax number;
- obtaining a licence (if the type of activity requires one).
It is important to note that some stages are carried out in parallel, and the procedure for starting a business in Austria is relatively simple and usually takes from 2 to 4 weeks.
Documents required to start a company in Austria
- Apostilled Articles of Association
- Minutes of the Meeting
- Apostilled Opinion Letter of Board of Directors
- Protocol
- Share Certificates
- Apostilled Resolutions of the Subscribers
In addition to the above-mentioned corporate documents, it is also necessary to submit documents proving the identity of the shareholders and directors (passport, residence permit), their place of residence, information on the origin of funds, details of the company’s bank account and proof of a legal address (rental agreement or office purchase agreement).
Peculiarities of the taxation system in Austria
Starting a business in Austria is quite profitable due to the flexible tax system, which provides for a number of benefits. Taxation for companies is as follows:
- corporate tax – 25% (for GmbHs and AGs, the minimum corporate tax from the second year is 5% of the share capital – EUR 500 for GmbHs and EUR 3,500 for AGs);
- dividend tax – 25%;
- VAT rate – 20% (for such activities as food, rent, tourism, agricultural products, a reduced rate of 10% is applied).
VigoLex has been working with the Austrian jurisdiction for many years. We provide comprehensive services for company registration in Austria. If you have decided to register your company, our lawyers will be happy to help you prepare a list of all necessary documents, obtain a tax number, open a bank account, select a director and secretary, rent a legal address and perform all other actions necessary for starting a business. If you have any additional questions, you can contact our manager. In addition to the consultation, the client receives a detailed list of expenses to be incurred in the process of registering a business in Austria, as the final cost of the procedure varies depending on each specific situation and is calculated on an individual basis.