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Company Formation in Austria

Overview :

The Austrian economy benefits vastly from robust commercial relations, namely in the areas of banking and insurance. The economy is characterised by a large service sector, a healthy industrial sector, and a relatively small but successful agricultural sector. Austria has made important transitions in order to synergise its economic, legal and taxation framework with those of the EU community. Consequently, this has led to liberalisation of commercial laws in Austria. Austria is a good export market for U.S. companies, with no significant trade barriers. It has a very low unemployment rate. Job opportunities in the Marketing and Information Technology sectors are becoming increasingly available.


Advantages of incorporating business in Austria
  • An Austrian company is legally exempt from dividends tax received from a foreign subsidiary. Austria levies no withholding tax on dividends paid to the foreign parent.
  • As a member of the European Union (EU), Austria is governed by the provisions of the EU’s Parent-Subsidiary directive. Thus, an Austrian holding company which holds at least 25% of the shares of an EU subsidiary can receive dividends from the subsidiary free of withholding tax.
  • An Austrian company can access a large network of double taxation treaties Austria has signed with major trading nations around the world.
  • Vienna ranks 8th in the Monocle Quality of Life Index. The index bases its ranking on factors like quality of housing, urban scale as well as amount of crime and the quality of education and healthcare.
  • Regional subsidies for investments.
  • Central location at the heart of Europe with optimum connections both west and east.

Tax Regime
  • The second lowest corporate taxation within the EU15 with a uniform rate of corporation tax of 25 % – according to the Centre for European Economic Research, the effective tax on profits is just below 22.4 %
  • No wealth tax or trade tax
  • Most attractive group taxation in Europe
  • Exclusion possibilities and generous rulings on tax-free allowances for investments in research (up to 35 %) and training (20 %), new technologies as well as start-ups-
  • Up to 35 % tax-free allowance for research
  • 20 % tax-free allowance for training

Types of Entities
Sole trader :

As the name implies, this business is owned by only one person. The business may employ staff, but there is a single name to the business. Sole traders include many tradesmen and professionals working for themselves, as well as some small retailers.


Partnership :

A partnership is any business with between two and twenty owners. A partnership can be formed without any particular legal processes being followed; however, it is usually wise to have a written agreement before commencing business.


Company :

There are two categories of company – public and private. A public company is usually traded on the share market and the public is able to buy shares. A minimum of five shareholders is mandatory.  A private company are not usually listed on the stock exchange and have restrictions on who can buy shares. Family companies are frequently private.


Cooperative :

This is similar to a company but is formed by a group of people with a common goal to work together. Profits made by co-operatives are either distributed between the members or used to improve the cooperative in some way.Co-operatives are covered by the Co-operatives Act and need to adhere to various rules and regulations under the Justice Department.


Government Bodies :

Some Government departments are set up as entities to carry out certain functions for the community. For instance, the ATO (Austrian Tax Office) and Centre link operate as businesses although they are government owned and controlled.


Clubs, societies and associations :

These are groups of people with related interests establishing a group to cater to that interest without the main intent being profit. Categories include sporting clubs, cultural clubs, charity groups, employer/employee associations, political associations, pastime clubs, support groups and professional associations.


Time period

It usually takes 25 days to incorporate a business in Austria.