Company Registration in Austria
Austria has secured the 12th position from the growth standpoint among all European countries. Its unprecedented business location and potential attract entrepreneurs globally. With a per capita of USD 48,586, this nation ranks among the wealthiest nations in the world. Austria is incredibly business-friendly for local and overseas entrepreneurs. Starting a business quest in Austria is almost paperless. Applicants from local or abroad undergo a simplified bureaucratic procedure to legalize their entity. Securing company registration in Austria is mandatory to commence business affairs. Let’s take a comprehensive look at the legalities concerning business establishment in this part of the world.
Why Opt for Austria for Business Endeavors?
Starting a business in Austria can be ideal for those eyeing a hassle-free business setup and access to the European market. Here’s why this nation is lauded as a business hotspot:
- The ideal destination for businesses dealing with affluent commodities thanks to the higher purchasing power of the customers.
- Strategic location and vast connectivity amplify market reach, ensuring an increased customer base for businesses.
- Robust administration with a high level of transparency, ensuring all-encompassing and effective governance.
- A strong economy and stable political environment add to the business’s success.
- Nominal taxes and incentives ensure increased profit margins for companies.
- R&D credit encourages businesses to surpass the boundaries of innovation.
- Productive and affordable labor segment
- No trade or wealth tax
Legalities For Securing Company Registration in Austria
The following requirements are necessary before setting up a business in Austria:
Work Visa
The Austrian law requires no special visa for business establishment or expansion from Swiss or EEA applicants. However, applicants from other nations must secure a work visa before forming a business in Austria. Depending on the type, the validity of such visas varies, ranging from 6 months to 12 months.
Currently, two types of work visas are available in Austria:
The Red-White-Red card
This visa allows non-EU nationals to get a work permit. The applicant’s score should be equal to or higher than 70 to qualify for this visa, which comes with a 2-year validity.
EU Blue card
This visa is ideal for those adhering to short-term business plans. It comes with a validity of 90 days.
Business visa
Being almost identical to the Red-White-Red Card, this visa confers equal rights akin to the local individuals. This visa remains valid for 4 years.
Company name and address
Having a company name and address is paramount from a legal standpoint. Whereas a registered and lawful name helps with recognition, address eases communication with several competent authorities. Head to the Austrian Federal Economic Chamber for name reservation.
Taxation
The Austrian government levies nominal taxes on overseas entities, allowing for improved profit margins. The following taxes will come into play when doing business in Austria.
- Profit earned attracts corporate taxes equivalent to 25%. A minimum taxable amount levied on limited liability structures and joint-stock ventures is EUR 3,500 and 1,750, respectively.
- The VAT rate has been capped at 20%.
- The sole traders reaping income EUR 30,000 or less attract an income tax ranging from 23-50%
- A withholding tax of 25% applies on interest earnings and income originating from security earnings.
Business capital
Business capital refers to a mandatory minimum investment for kickstarting an offshore company in Austria no matter the industry being targeted. The type of structure you choose determines the business capital to be invested. For general or limited partnerships, no minimum investment is required.
But in the case of limited liability companies, an investment amounting to EUR 35,000 is required, out of which EUR 17,500 should make its way to the designated bank account as a part of compliance. Further, those opting for joint-stock ventures must invest EUR 70,000, of which 25% need to be paid in cash.
Director/Officer
Stock corporations are mandatorily required to appoint at least three supervisory board members. The same rule applies to limited liability companies with an additional requirement of appointment at least one managing director.
Shareholders
The Austrian laws mandate the presence of at least one shareholder with no cap on the upper limit. In a joint-stock venture, shareholder’s liability is confined to their contribution, minimizing the risk of losing personal assets.
Each shareholder should have approval from the Austrian companies registry. It is noteworthy that partners in the general partneship firm must cater to gains and losses on their assets.
License
Trade endeavors in Austria are not possible without the trading license issued by the local authority. File application alongside key documents evidencing company address, name, designation, business type, etc.
Bank account
Every offshore company seeking company registration in Austria must have a corporate bank account boasting the minimum capital investment.
Business Structures Company Registration in Austria
The following structures are available for company registration in Austria.
Joint-stock company (AG)
The threshold of share ownership limits the joint-stock corporation. The shares are available for public trading, enhancing the fundraising potential. One or more shareholders can form a joint-stock company with a minimum investment of EUR 70,000. Such companies must have one supervisory board boasting at least three members.
Private limited liability company (GmbH)
A private limited liability company is among the most preferred structures thanks to its increased flexibility, limited liability, perpetuity, and stability. It supports the provision for lower equity holding. EUR 35,000 is the minimum capital required for its formation.
General partnership (OG)
In Austria, an open or general partnership is a result of collective endeavors powered by two or more entities or individuals eyeing a common business goal. Such firms bring unlimited liabilities for every partner. To legalize OG, one must secure a trade license and a certificate from the Austrian Commercial Register.
Limited partnership (KG)
Entities seeking company registration in Austria can opt for this structure due to increased flexibility and minimal risk. The KG offers a blend of a general and limited partnership. It entails at least one general partnership bearing unlimited liabilities and the rest with controlled liabilities, offering more stability than OG.
Silent partnership (stGes)
Akin to the limited partnership, this structure entails silent partners alongside general and limited partners. Despite being a part of a company, silent partners neither address any onus nor have any power to influence decision-making.
Sole proprietorship
As the name suggests, this structure is managed by one individual with ownership and managerial control. Although this might seem advantageous since the owner is not answerable to anyone, the likelihood of being outperformed by the debts under financial mishaps is significantly higher due to unlimited liabilities. A trade license is a mandate for such structures.
Checklist, Process, and Norms for Company Registration in Austria
Applicants seeking offshore company registration in Austria can follow the given steps:
Pre-registration checklist to follow:
- Local bank account
- Shareholders
- Articles of memorandum
- Financial statements of the company
- Incorporation certificate
- Minimum capital shares
- Company name
- Managing directors
- Agreement of the shareholders or notarized establishment declaration
Registration process:
After collecting key documents, follow the given steps:
- Head to the Commercial Registry (HRA) for name reservation and activity approval. Notably, you might need to share some key info about the business and its control while approving the activity.
- Draft the founding paperwork and get them notarized by a competent professional.
- Submit the notarized dossiers and application to the Trade register.
Post-registration:
After securing company registration in Austria, ensure compliance with the following operational norms:
- Securing tax registration
- Issuing share certificates to the company’s shareholders.
- Signing up for social security to ensure workers’ welfare
- Displaying company seal.
Conclusion
From appointing members, selecting a structure, and notarizing documents, to securing certificates, starting as an offshore company in Austria is a matter of legal compliance wherein several legalities come into play. New businesses often have a tough time addressing such requirements. That’s where a renowned service provider like Adviso comes into play. With years of experience and a robust network of professionals, Adviso ensures a hassle-free business journey for entrepreneurs seeking to go global. Connect with us today and overcome the labyrinth of compliance tied to global incorporation.
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