How To Start A Business In Austria

Austria, known for it’s baroque architecture, folk tunes and coffee culture, is also an increasingly appealing destination for entrepreneurs.

However, there are a lot of elements to consider before diving into this economy. Here, we take a look at everything you need to know and think about before starting a business in Austria.

 

Why Start A Business In Austria?

 

Being central in Europe, Austria provides easy access to the European market, which comes with easier trade laws and over 45o million potential EU consumers.

Austria is also stable politically and economically, which makes it attractive to foreign investors and entrepreneurs who are look for a reliable and predictable environment to setup their businesses.

In addition to this, Austria also has a skilled workforce, making it easy to find and hire good employees.

 

Corporate Income Tax And VAT in Austria

 

Austria has a unique corporate income tax system, with a flat rate of 24%. While this isn’t as low as other European countries, what makes Austria’s system unique, is that it is applied to company profits – regardless of whether it is reinvested or distributed.

Austria follows the standard EU VAT system of 20% – once annual turnover exceeds €35,000, businesses must register for VAT.

Austria also has a relatively high top personal income tax rate of 55 percent, which could be a consideration for business leaders looking to build large companies.

 

Austrian Employment Laws

 

If you are a business owner that will be looking to hire employees, you need to get to know local employment laws. These include:

Minimum wage: Though there is no federal minimum wage in Austria, however, there is a de-facto minimum wage which is €1,500 per month.

Annual leave allowances: As specified within the Austrian Holiday Act, employees are entitled to five weeks of paid holiday leave for each working year.

Maternity pay: Value of 3 monthly salary wages, paid out monthly in arrears.

Employers must also make contributions to social security which covers healthcare, unemployment, and pension funds.

 

 

Living In Austria

 

If you are planning to start a business in Austria, it’s also worth thinking about what it would be like to live there. Austria, like many countries in Western Europe has a high cost of living.

According to housing anywhere, the average monthly living cost for one person in Austria is roughly €1,900. Though it is worth noting that this may be higher depending on where you choose to live. For example, apartments in Central Vienna are much more expensive than those in the countryside.

Another thing to consider is local language. Austrians speak German officially, so knowing the language will help with customer and stakeholder interactions.

 

Setting Up A Business In Austria: What You Need To Know

 

If you are planning to set up a business in Austria, it’s worth thinking about a few things:

 

Visas

If you are a non-EU citizen, you will need a working visa to start a business in Austria. The country currently has a Red-White-Red Card that is designed for Startup Founders looking to build companies in the country.

Founders that are eligible for this need to have:

• Strong business ideas that will improve the Austrian economy
• $61,750 invested in the business
• A degree or diploma
• Contract with an Austrian business incubator or start-up funding agency
• Proof that you can financially support yourself

If you fit into this category, the visa will allow for working residency for up to 2 years.

 

Business Structures

Austria has several legal structures that businesses can choose from, including:

Austrian Private Limited Liability Company (GmbH): Popular due to its flexibility, requiring a minimum share capital of EUR 10,000 (with 50% deposited before registration). Shareholders do not have to be Austrian, but they must contribute a portion of share capital.

Austrian Stock Corporation (AG): Must have a minimum of EUR 70,000 in investment and one or more shareholders. There also needs to be a board with at least 3 members. Stocks can be traded publicly.

General Partnership (OG): Formed by at least two people who are equally responsible for the company. At least 1 has to have skills related to the business.

Limited Partnership (KG): Formed by at least two people, where one is a general partner with full responsibility and another has liability based on their investment.

 

Trade Licences

Depending on the nature of your business, you may also need a trade licence (Gewerbeberechtigung). This is issued by the public authorities (Magistrat or Bezirkshauptmannschaft).

Whilst it isn’t difficult to get a trade licence, it’s worth baking this into costs and timelines.

 

Costs

According to HealyConsultants, the costs for opening an LLC is €14,920 and a PLC is €16,920. If a company wants to exist outside of Austria and open a branch within the country, the cost is €16,920.

Timelines

When it comes to timelines, it might take a little longer to open some business types. For example, opening an LLC takes around 15 weeks on average, whereas a PLC takes around 14.

This includes everything, from the time it takes to register a company, to bank approvals and more – so make sure you have this in mind before applying.

 

Starting A Business In Austria

 

Starting a business in Austria can be an exciting move for any entrepreneur. However, before the move it’s important to think about elements like visas, the costs of incorporation and what it would be like to live there.

With the right planning, you can make sure that your business in Austria is set up for success from the start!

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