Austria

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Austria

General information about the jurisdiction

Austria (official name is the Republic of Austria) – a union state of Central Europe, which consists of 9 independent lands.

The economy of the state is based on the high-tech industry and agriculture. The other source of fiscal revenue is tourism generated by rich cultural heritage and beautiful natural landscapes.

Moreover, in anticipation of joining the EU in 1995 the Parliament made some amendments to the law, which helped Austria to become one of the most cost-effective states in Europe for doing business.   

1. Legislation

Company activity in Austria is regulated by Commercial Code and the Law on the promotion of new companies.

2. Company formation

2.1 Types of companies

The Austrian law provides a lot of corporate forms (partnerships with limited and unlimited liability, Limited Liability Company, public joint stock company with limited liability etc), but the most preferable for foreigners are

  • Joint stock company (AG);
  • Limited Liability Company (GmbH). 

         2.2. Joint Stock Company (AG):

  • The minimum authorized capital – 70.000€, 100% of which must be paid by the moment of incorporation. 
  • Shares – registered, bearer. Shares may be par value (from 1€) and without it.
  • Director (chairman of the board) –at least 1 individual, no residency required. There must be a Supervisory Board that appoints the Board for a term not exceeding 5 years.   
  • Members – at least 1, individual or legal person, no residency required.  
  • Secretary – not required.
  • Publicly available information: information about directors and shareholders. 
  • Company is obliged to keep and submit an annual financial report, an audit is not required for small companies.
  • Annual meetings of shareholders are required. 

         2.3. Limited Liability Company (GmbH):

  • The minimum charter capital is  35000, 50% of which should be paid at the moment of company’s incorporation.
  • Shares – the minimum cost of a share – 70€.
  • Director – at least 1 individual, no residency required. If it is necessary for the company to be resident (for the purpose of the agreements on avoidance of double taxation) its executive body should locates in Austria.
  • Members – at least 1, individual or legal person, no residency required.  
  • Secretary – not required.  
  • Publicly available information: about directors and shareholders.
  • Company is obliged to keep and submit an annual financial report and to be audited (not required for small companies).
  • Annual meetings of shareholders are required.

3. Taxes

There is a territorial principal of taxation in Austria, which means that resident companies pay taxes on their entire global income and non-resident companies are subject to tax only the income derived from sources in Austria.

Income tax –  25%

Tax on capital - 0.8 - 1%

VAT – 20% (reduced rate – 10%, applies to food, rent, tourism, agriculture products).

Taxes on income source:

Dividends:

  • EU – the parent company: 0%
  • state with agreements on avoidance of double taxation: 0 % - 10 %
  • Other countries: 25%

Interests:

  • EU – the parent company: 0%
  • state with agreements on avoidance of double taxation: 0 % - 25 %
  • Other countries: 25%

4. Currency control

None

5. Agreements on avoidance of double taxation

Austria concluded more than 90 agreements on avoidance of double taxation, including Ukraine.