REGISTRATION OF A BUSINESS (FIRM) IN AUSTRIA

COMPANY REGISTRATION IN AUSTRIA

Advantages of opening a company in Austria

• Favorable tax regulation
• Qualified employees
• Access to the European market
• Goverment subsidies and grants for business development
• Favorable conditions for buying real estate

What forms of business are available in Austria?

Sole proprietorship

A sole proprietorship (Einzelunternehmen; EPU) is an individual who manages a company in his own name and at his own expense. In Austria, an individual entrepreneur is the most popular way of running a company.

• Each sole proprietor has unlimited liability for all business and personal assets.
• A residence permit in Austria is required for doing business in Austria.
• A trade license is required for individual entrepreneurs who wish to engage in trade.
• Registration in the Austrian Commercial Register (Firmenbuch) is mandatory only for private entrepreneurs whose financial turnover exceeds EUR 1 million per year or EUR 700,000 for two consecutive years. Voluntary registration in the Firmenbuch is possible.
• An individual entrepreneur pays income tax in the amount of 20%.
• An individual entrepreneur has the right to hire employees.

Limited liability company (Gesellschaft mit beschränkter Haftung, GmbH)

• Can be founded by one or several persons. The maximum number of participants is unlimited.
• There is no personal liability of the shareholders.
• The minimum amount of share capital is EUR 35,000. Contributions in kind are possible.
• Two-level taxation system: first, corporate tax is paid on the company’s income, then dividends distributed among shareholders are taxed.
• The management of the company is carried out by the board. The creation of a supervisory board is mandatory only for companies with a share capital of more than 70,000 euros and more than 50 shareholders.
• At least 1 member of the board and at least 3 members of the supervisory board, if one is created.
• The company is registered through the local court. The following documents are submitted for registration:
• application for registration;
• notarized article of incorporation;
• a certificate from a local bank confirming the payment of the share capital.

Joint stock company (Aktiengesellschaft, AG)

• Can be founded by one or several persons. The maximum number of shareholders is unlimited.
• There is no personal liability of the shareholders.
• The minimum amount of share capital is 70,000 euros. The nominal value of shares is not less than 1 euro.
• Two-level management system: current activities are carried out by the board, the supervisory board monitors the board’s activities and gives consent to certain actions.
• At least 1 member of the board and at least 3 members of the supervisory board are required.
• The company is registered through the local court. The following documents are submitted for registration:
• application for registration;
• notarized charter;
• notarized document on the appointment of the board and the supervisory board;
• written confirmation of the founders that the joint-stock company was established properly;
• a certificate from a local bank confirming the payment of the authorized capital.

General partnership (Offene Gesellschaft, OG)

• A business entity that carries out trading activities, whose partners bear full responsibility for its debts with all their property.
• All partners are managers of the partnership. Individuals and legal entities who are not partners shall not participate in the management of the partnership.
• Single-level taxation system: only the partners’ corporate income is taxed.

Limited partnership (Kommanditgesellschaft, KG)

• A commercial entity has 1 or more general partners who have unlimited joint and several liability for all partnership debts, and 1 or more limited partners who limit their liability for debts to a certain amount that they pay sub enterprise.
• Persons whose liability is limited are excluded from managing a limited liability company.
• External managers (persons who are not general partners) cannot be appointed.
• Single-level taxation system: only the partners’ corporate income is taxed.

To register a company in Austria, the following steps must be taken:

• Trading name reservation is the first step to be completed;
• Ensuring the company has a legal address is also mandatory;
• Drafting the Articles of Association having them notarized;
• Filing the paperwork with the local office of the Trade Register;
• Obtaining tax and VAT numbers with the local tax office;
• Filing for the necessary business permits and licenses, where applicable.

What criteria must a person meet to open a business in Austria?

• The person must be at least 18 years old
• Money to pay the authorized capital
• Compliance with the laws of Austria
• Confirmation of the qualification of the entrepreneur (diploma on education, experience in this field).
• Residence permit in Austria.

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