Differences between GmbH and AG in Austria
The main difference between GmbH and AG is that GmbH is a limited liability company and AG is a joint stock company.
The authorized capital of a GmbH is formed from contributions by a participant of the company, each of which receives a share in the authorized capital of the company, which is proportional to the size of his or her contribution. AG is a joint stock company, therefore, the corporate rights of the company participants – shareholders – are certified by shares.
Both the participants of a GmbH and the shareholders of an AG are responsible for the actions of the company exclusively within the framework of their participation in the authorized capital of the company.
The founder of a GmbH can be 1 person; to register an AG, at least two founders are required.
A business can open a company in Austria both as a GmbH and as an AG – depending on the business type, business goals and requirements of the Austrian legislation.
Registration of GmbH: requirements for founders, name, authorized capital of the company
In order to open a company in Austria in the legal form of GmbH, a number of requirements must be met.
Before opening your company in Austria, you should know the following features of opening a company in the legal form of GmbH:
- GmbH can be established by 1 participant;
- the founder can be a legal entity or an individual, including a foreigner who does not reside in Austria;
- the company name must indicate its legal form – GmbH;
- the authorized capital of the company with foreign participation must be at least 35,000 EUR, the authorized capital of the company without foreign participation – 17,500 EUR;
- each participant must deposit at least 7,000 EUR in cash to an Austrian bank account.
In Austria, there is an investor assistance regime: when a GmbH is established, its authorized capital can be formed in the amount of 10,000 EUR with the obligatory payment of 5,000 EUR at the moment of the company registration.
During the next 10 years, investors are required to contribute another 5,000 EUR to the authorized capital, and in the future – the balance to the full amount of the authorized capital.
Structure and management system of GmbH in Austria
Based on the experience of VigoLex, asking the question “How to start a business in Austria?” the client is always interested in understanding the specifics of managing the company in the future.
GmbH can have one founder, he or she can also hold the position of the company director. If desired, the company may appoint several directors, who in this case must act collectively.
Before opening a company in Austria, you must remember that in any of the following cases, the Austrian legislation requires the formation of the supervisory board in the company:
- the authorized capital of the company exceeds 70,000 EUR;
- the number of participants of the company exceeds 50 people;
- the number of employees of the company exceeds 300 people.
The activities of GmbH are governed by the meeting of the participant of GmbH and the director. The meeting of GmbH participants solves the most important issues related to the company activities – the list of such issues is determined by law. To make a resolution at a meeting of GmbH participants, 50% + 1 vote of all participants is enough.
Execution and registration of the Articles of association of GmbH
The main document of a company in Austria is the Articles of association. In order to open a business in Austria, it is imperative to have the Articles of association of the company, otherwise the company will not be registered.
The Articles of association of a company can exist in the form of an ordinary articles of association (if the company has several founders) or in the format of the incorporation declaration (in the case you decide to open a business in Austria with one founder).
The Articles of association of the company must be notarized. The Articles of association of the company must contain the following information: the name and address of the company office, the purpose of the company activities, the size of its authorized capital, as well as the size and the value of the share of each founder of the company.
Terms and cost of registering GmbH
Before opening a company in Austria, you should remember that the term for registering a GmbH in Austria largely depends on the work of government agencies and notaries.
The bottom line is that the total number of registration term for GmbH in Austria is 25-35 working days, the total cost of state duties for such registration is about 100-120 EUR.
Registration of AG
To register an AG, you do not need to have Austrian citizenship or permanent residence. The minimum authorized capital of an AG is 70,000 EUR. At least ¼ of the authorized capital must be deposited at the time of the company registration to an account with an Austrian bank.
If shareholders contribute to the authorized capital with property or property rights, it is necessary to carry out a financial audit and assessment of such property/rights with the help of a state auditor. Such in-kind contribution must be made in full.
Execution and registration of the Articles of association of AG
The application for registration of the Articles of association of AG in the state register must be signed personally by the director of the company, all members of the board of directors and all shareholders in the presence of a notary, participation of representatives is not allowed.
The signed Articles of association, as well as each signature on the document, is certified by a notary.
The Articles of association of AG must include the following information:
- name and location of the company;
- type of activities of the company;
- the amount of the company authorized capital;
- conditions for dividing the company authorized capital into shares, indicating the par value of each share;
- composition of the board of directors.
These features should be taken into account before opening your company in Austria in the legal form of AG.
What documents are needed?
Before starting a business in Austria, you need to prepare the following documents:
- Articles of Association (Apostilled constituent documents);
- Minutes of the Meeting;
- Opinion Letter of Board of Directors (Apostilled);
- Share Certificates;
- Resolutions of the Subscribers (Apostilled).
Taxation of companies in Austria
Business taxes in Austria are relatively standard across the EU jurisdictions. The size of the corporate tax on the company profits is 25%. In addition, for GmbH and AG companies the minimum tax rate is 5% of their authorized capital.
Dividends paid by a company to its founders are taxed at the rate of 25%.
The standard VAT rate in Austria is 20%, for certain types of business the VAT rate is 10%.
VigoLex team will be happy to advise you on how to open a company in Germany or Austria, what are the business taxes in Austria and other issues related to opening a company in the jurisdiction of Austria.