Registration of a company in Austria

Necessary package of documents and basic requirements for establishment of the Austrian company

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The Austrian Republic is a politically stable state in the center of Europe enjoying a developed economy and high living standards. In terms of GDP, it is in the top 5 countries of the European Union. The government has created a favorable climate for entrepreneurship and investment in various industries of the financial and economic sector.

The country opens up broad prospects for tax optimization. The law makes relatively loyal requirements for businessmen wishing to establish a company in Austria or acquire a ready-made enterprise on the territory of the republic. The process of starting a business does not take long if you study the key aspects of the process in advance.

We will learn how to register a company in Austria, what are the features of local business, what are the requirements for firms and how complicated the process of self-registration is.

General information on the country and features of doing business

The Austrian Republic is part of the EU and consists of 9 federal lands. It borders on the Czech Republic, Slovakia, Hungary, Italy, Germany, Slovenia and Switzerland. Its capital is Vienna, the population is 8.5 million people and the currency is euro. The state language is German. Austria is a member of many international organizations, including the WTO, the World Bank, the Organization for Economic Cooperation and Development.

Dynamically developing economy of the country is based on use of progressive technologies in industrial and agricultural spheres. A significant proportion of the population is employed in service and financial sectors. Scientific developments are the main driving force of economic development. The tourism industry is widely developed - the country has many cultural heritage sites and picturesque natural landscapes.

Austria has nothing to do with offshore, but is considered one of the most economically favorable countries for doing business. Setting up a company in this jurisdiction gives the enterprise a high level of prestige and trust from partners and clients. Investments in the economy of the state are distinguished by a high level of reliability - stability and high GDP indicators guarantee not only safeguarding of funds, but also their growth in the long term.

The country has a system for reducing taxation of profits of legal entities and shareholders. For the latter, tax on dividends has been partially canceled. There is no currency control here, except when the collection of information for statistical reports is required.

Let’s start the main advantages for establishing a business in Austria:

  • stable political situation - since 1955 Austria has been neutral and does not belong to any military blocs;
  • developed and growing economy based on innovation and advanced technologies;
  • well-functioning banking and financial sectors;
  • low inflation;
  • skilled personnel;
  • social policy aimed at improving the welfare and security of citizens;
  • tax system loyal to business;
  • oriented to attract foreign investment;
  • prestige of jurisdiction in Europe and around the world.

Several dozen legal entities are registered in Austria every day and some of them are residents of other states. The most popular business legal structure is a limited liability company (Gesellschaft mit beschränkter Haftung, GmbH). Foreign companies also register joint-stock companies (Aktiengesellschaft, AG), but there is less demand for this option.

The process of starting a business for both Austrians and foreigners is simplified as much as possible, however, it requires strict adherence to the established registration procedure.

Tax system

Austria has implemented various taxation systems towards residents and non-residents. Local companies (with a legal address in Austria) pay taxes regardless of where they are received - on the territory of the state or outside it. Non-resident companies are required to deduct taxes on income earned only in Austria. Other profits, regardless of their source, are not subject to tax.

The following tax indicators have been established:

  • Rate on the profit of legal entities - 25%. In a situation where the company has no income, there is a minimum tax of 3500 EUR for joint-stock companies (AG) and 1750 EUR for a limited liability company (GmbH).
  • Tax on income of legal entities from capital gain – 25%.
  • Gain on sale of securities by foreign companies registered in Austria is exempt from taxes if the following conditions are met: participation of the legal entity is less than 10%, ownership of shares is at least one year.
  • Taxes on dividends paid by foreign companies – 25%. Austrian companies paying dividends to shareholders also contribute 25% to the country’s budget. According to the international double tax treaties, taxes on dividends, interest and royalties can be reduced or not charged at all from resident companies.
  • Interest paid to foreign companies is not subject to withholding tax.
  • Taxes on royalties paid to foreign legal entities - 20%.
  • Standard rate of value added tax is 20%. VAT registration is obligatory for resident companies with an annual turnover of more than 30,000 EUR.
  • Tax on capital of the legal entity – 1% of the capital or of the amount by which the company’s capital has increased. The tax is payable in the following cases: company establishment, increase in authorized capital, transfer of assets of a foreign company to an Austrian branch.

VAT tax can be reduced to 10% for the enterprises involved in tourism, agricultural and food production.

Reporting

All companies must prepare and submit financial statements to the register no later than 9 months after the close of the fiscal year. Audit is carried out in all firms, except for those with status of small enterprises.

Companies shall be considered small, if their indicators are subject to the following conditions:

  • corporate assets do not exceed 4.84 million EUR;
  • turnover is less than 9.68 million EUR for two consecutive fiscal years;
  • number of employees is no more than 50 people.

All documents submitted to the register are made publicly available. Digital reporting is regulated. Large joint stock companies (AG) must publish data in official print media - Wiener Zeitung newspaper. AG undertakes to hire an independent certified professional who will conduct a financial audit of the company.

Selection to BLS and requirements to companies

As mentioned above, the most popular business legal structures in Austria are AG (analogue of a joint-stock company) and GmbH (analogue of a limited liability company). A large number of foreign residents who has decided to set up a business in Austria choose the second option - GmbH. In this case, the liability of founders and participants is limited to the amount of their contribution to the authorized capital.

Requirements to GmbH:

  • Authorized capital – not less 35,000 EUR. If there is no possibility to pay this amount at once, there is an option to contribute the authorized capital differently: 10,000 EUR upon registration, and 17,500 EUR - in ten years. Only in this case, 50% of the first payment (i.e. 5,000 EUR) must be transferred to the account in Austrian bank before registering the company in a commercial court.
  • Director – minimum one individual person or legal entity.
  • Founder – minimum 1 (individual person or legal entity).
  • Director and founder can be one person. Although there are no residency requirements, it is still desirable that this is an Austrian citizen. The point is that it is more difficult to open a bank account with a non-resident director, because the financial institution does not see the company’s connection with Austria.
  • Secretary – optional.
  • Information on senior management is publicly available.
  • The Company is obliged to keep financial statements and submit it annually.
  • Audit of financial statements is compulsory for all, except for small businesses.
  • Registration address is necessary.

Requirements to joint-stock companies (AG):

  • Minimum company’s capital – 70,000 EUR. At the moment of registration, at least 25% of this amount should be deposited to account of the Austrian bank.
  • Shares should be registered, to bearer – can be with indication of nominal value (from 1 EUR) and without it.
  • Director (or management representative) - minimum one, individual person without requirements to citizenship;
  • Shareholders – minimum two individual persons or legal entities, without requirements to residency.
  • Secretary – optional.
  • Information on the directors and shareholders are publicly available.
  • JSC undertakes to keep and submit annual financial reports to the inspection bodies.
  • Annual general meetings of shareholders shall be recorded by the notary.

Both business legal structures allow the company to acquire rights, bring claims and be liable in court.

Legal entities registered in Austria have access to all types of activities within the limits of legislation of the republic. Period of registration is 4 to 6 weeks.

Which documents will be needed

The package of documents will differ slightly depending on who is the director/shareholder – a legal entity or individual person.

If the shareholder/director is an individual person:

  • company name (unlimited number of options are possible in priority order);
  • detailed description of the company’s activities;
  • ID cards of the directors and shareholders - a copy of the passport;
  • proof of residence of founders (utility bill/bank statement - both documents are not older than 3 months);
  • letter of recommendation from a banking organization in English;
  • certificate of no criminal record, issued no later than a month before the submission of documents for registration;
  • CV.

If the founder is a legal entity:

  • company name;
  • description of activities;
  • apostilled corporate documentation (charter, order of the director’s assignment and other papers depending on jurisdiction of the legal entity);
  • documents of the final beneficiary - scanned copy of the passport for travel abroad, utility bills/bank statement, certificate of no criminal record;
  • letters of recommendation, CV.

All certificates and copies of the documents must be translated into German and English and notarized.

Government payments are provided for – fee for entering a legal entity into the register (from 352 EUR), payment of the authorized capital, fee for publishing in newsletter.

Difficulties of self-registration

Setting up a company in Austria is a complicated procedure that requires knowledge of local laws and strict adherence to the established regulations. It is especially difficult to take into account all the nuances of legislation for persons who have not previously encountered the company registration procedure.

Difficulties may arise with the choice of a unique name, correct selection of business legal structure corresponding to the activities of the enterprise, accurate translation of the documentation into German or English and notarization of official papers.

If even small errors are found, when filling out the documents and submitting them, registration will be refused. When re-submitting the documents, examination will be even more biased than the first time. As a result, the paperwork procedure will drag on indefinitely, and for any business, time plays a crucial role.

To avoid such a situation, it is recommended to delegate the task of registration to a professional company. This will significantly speed up the process and eliminate errors in paperwork.

Services of Beforis

Professional lawyers from Beforis will assume all stages of company registration in Austria. They pay all government fees and duties (stamp and notary fees, public bulletin) and open a bank account to deposit the authorized capital.

Also, Beforis specialists will check name of the company for uniqueness, prepare charter of the company, check all documents before submitting to the register, make accurate translation of papers, and arrange notarization.

Beforis will provide registration address for the company and, if necessary, services of nominal employees, will take care of personnel recruitment. If the need arises, you can order full legal support of the company after its setting up, as well as additional services for the comfortable business operation within the framework of Austrian legislation.

If you are interested in the offer from Beforis, please send a request for free advice to e-mail hi@beforis.com or by filling out the feedback form.

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