Austria is a sophisticated and prosperous business centre, which serves as a trading bridge between Eastern Europe and Balkans. Austria welcomes foreign investors and rather than combating offshore countries, Austria makes tax treaties with them. In addition, tax-minimizing structures are developed for all types of companies, which allow the effective tax rate to be only 3-5%. These are only few of numerous benefits of company formation in Austria.
Choosing the right business structure may have critical consequences therefore it is highly important to explore all the available options before making this decision. Below are four most popular types of companies available for formation in Austria:
Joint stock company (Aktiengesellschaft) is designed for large businesses and its minimum share capital is 70,000 EUR. The capital is divided into shares and can be offered to the public. One shareholder is needed to start joint stock company and his or her liability is limited by the contribution to the capital.
Limited liability company GmbH (Gesellschaft mit beschränkter Haftung) is the most popular type of company in Austria. The minimum share capital is 35,000 EUR from which 17,500 EUR or more must be deposited at the moment of registration and each shareholder must contribute with at least 7,000 EUR to the starting capital of the company. Shares of this type of company cannot be traded to the public.
General partnership is formed by two or more corporate bodies or individuals with the same economic objective. Important to note, that all individuals participating in formation of general partnership have full liability for the company's debts as well as have equal rights in managing the partnership. No minimum capital contribution is set for general partnerships.
Limited liability partnership can be formed if there is at least one partner with full liability on company's debts and can make major business decisions and at least one partner with his or her liabilities limited by the contributed capital and has no decision power.
Procedure of company formation in Austria
The number one action for all new entities is to receive a confirmation from the Economic Chamber saying that the company is indeed a new enterprise. Then a document called Articles of association is drafted by a lawyer before a notary and a starting capital is deposited in a bank account and a confirmation deed of the funds is received.
After the above things are done, the company formation process can be started at the local court. For this process shareholders need to deposit following documents:
Application of registration;
Notarized declaration of establishment;
Articles of association;
Confirmation deed that the starting capital is deposited in the bank;
Specimen signatures of the board of directors.
After around seven days, when the business entity is registered at the local court and the information is published at the local newspaper, the company can be registered with the local Tax Office. There you will need to fill an application and declare the Articles of association, certificate of company registration at the local court and specimen signatures of the company representatives. In exchange, Tax Office issues a VAT number and tax identification number.
The last steps include registration in the Trade Register, registration with the municipality and finally – registration of company's employees with the social security authority.
The average time needed to set up a company in Austria is 21 days, from which the most time – 12 days – is spent waiting for a tax identification number (the official deadline to obtain the tax identification number is 1 month).