Austria is a member country of the European Union, located right in the center of the continent. Although it is a small country, it can really be a springboard for all foreign companies that want to penetrate not only the German-speaking countries but also the countries in the eastern part of Europe. This is because, for historical reasons, there is a close economic connection between Austria and countries such as Poland, the Czech Republic, Slovenia, Croatia, Hungary, etc. In fact, the major Austrian banks also have important representations in the aforementioned countries. In addition to this, a foreign entrepreneur wishing to set up a company in Austria finds himself in a country where he is certainly well received by the local authorities, which encourage investments by foreign entrepreneurs in various forms, especially in industry and research and development. It is also worth mentioning that the Austrian legal and tax system is rather stable and the rules, when they are changed, tend to be to the advantage of entrepreneurs.
At present, the company form most frequently chosen by entrepreneurs, including foreigners, starting a business in Austria is the limited liability company (Gesellschaft mit beschränkter Haftung). In this case, the entrepreneur may also be a sole shareholder and may also act as a director of the company.
A prerequisite for the registration of the company with the Commercial Register is that the company capital, in the amount provided by the law, is paid into the account of the newly formed company. According to the provisions of Austrian law, the minimum share capital for GmbHs is equal to € 35,000.00 and the shareholders must pay in at least half of this amount (i.e. at least € 17,500.00). There is a time lag of about two weeks between the day of payment of the required share capital and the day the company is registered.
Once the company is registered, a licence to operate must be applied for. If the entrepreneur wants to trade nationally or internationally, the aforementioned licence is ‘free’ This means that the law does not require the company director to have certain qualifications in order to obtain the licence.
Finally, the company must obtain the VAT number. In this regard, the tax authorities often want to personally meet the legal representative of the company, before the VAT number is assigned. During this meeting, the entrepreneur is also provided with useful information on the Austrian tax system.
As far as taxation is concerned, the profits of the GmbH are subject to a tax of 24%. That tax will be reduced to 23% next year.
Article written by –
RA Dr. Enrica Maggi
Maggi Kathollnig RechtsanwaltsGmbH
Sankt Veiter Ring 21A
9020 Klagenfurt am Wörthersee (Austria)
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