How to register a Company in Austria. Step-by-step guide

How to Register a Company in Austria: A Step-by-Step Guide, Key Considerations, and Benefits

Austria, nestled in the heart of Europe, is an attractive destination for entrepreneurs due to its stable economy, strategic location, and business-friendly environment. Registering a company in Austria offers access to the European Union market, a skilled workforce, and a transparent legal framework. This article outlines the step-by-step process for registering a company in Austria, highlights the main things to keep in mind, and explores the benefits of setting up a business in this vibrant country.

Step-by-Step Guide to Registering a Company in Austria

The most popular business structure in Austria is the Gesellschaft mit beschränkter Haftung (GmbH), or limited liability company, due to its flexibility and liability protection. Below is a step-by-step guide to registering a GmbH, which can be adapted for other business forms like sole proprietorships, partnerships, or stock corporations (AG).

1. Choose a Business Structure
   Select the appropriate legal form for your company. Common options include:
• GmbH (Limited Liability Company): Requires a minimum share capital of €35,000, with at least €17,500 paid in cash at registration. Ideal for small to medium-sized businesses.
• AG (Stock Corporation): Suitable for larger companies, requiring €70,000 in share capital.
• Sole Proprietorship: Best for freelancers or small businesses, with unlimited liability but simpler setup.
• Partnerships (OG or KG): General or limited partnerships, with no minimum capital but varying liability.
• FlexCo (Flexible Company): A newer structure allowing for profit-sharing shares without voting rights, often used to incentivize employees.
  Consider factors like liability, capital requirements, and operational complexity when choosing. Consult with legal or tax advisors to align the structure with your business goals.
2. Select and Reserve a Company Name
   Choose a unique company name that includes the legal form (e.g., “GmbH”). Check availability with the Austrian Commercial Registry Office (HRA). Some words, like “Austria,” require special permission. You can reserve the name for free for 10 days.
3. Draft Articles of Association
   For a GmbH, prepare notarized articles of association (or a declaration of establishment for single-person companies). This document outlines the company’s registered office, name, managing director, and scope of activities. Work with a legal advisor to ensure compliance with Austrian law.
4. Open a Bank Account and Deposit Share Capital
   Open an Austrian bank account to deposit the minimum share capital (€17,500 in cash for a GmbH). Obtain bank confirmation of the deposit, which is required for registration. Non-EU/EEA companies may need a permanent representative in Austria to open an account due to strict anti-money laundering regulations.
5. Register with the Commercial Register
   Submit the registration application to the Commercial Register Court, including:
• Notarized articles of association.
• Shareholder resolution appointing the managing director (if not in the articles).
• Notarized specimen signatures of managing directors.
• Proof of share capital payment.
• Confirmation of a valid company name from the Economic Chamber.
  Registration can be done online via the Business Service Portal (USP) or through a notary, with digital notarization available since 2022.
6. Obtain a Business License (if applicable)
   Most business activities require a trade license (Gewerbeberechtigung), issued by the district or city administrative authorities. For regulated trades (e.g., carpentry, pharmacy), provide proof of qualifications or appoint a qualified trade manager. Free trades require only a clean criminal record and being over 18. Submit applications via the Austrian Business Licence Information System (GISA).
7. Register for Taxes and Social Security
• Tax Registration: Request a tax number and VAT identification number from the tax office (Finanzamt) after Commercial Register entry. The standard VAT rate is 20%, with reduced rates for certain goods. VAT registration is mandatory if annual revenue exceeds €30,000. 
• Social Security: Register employees with the Austrian Health Insurance Fund (ÖGK) and the Social Insurance Institution for the Self-Employed (SVS) before their first day. Sole proprietors must also register with SVS. 
• Corporate Tax: Austria’s corporate income tax rate is 23% (recently reduced from 25%). A minimum annual tax of €500–€1,000 applies for the first five years, even if profits are low.
8. Notify the Oesterreichische Nationalbank (OeNB)
   Report cross-border capital transactions (e.g., direct investments) to the OeNB for statistical purposes. This is typically handled by your tax advisor.
9. Comply with Ongoing Requirements
   Maintain accurate financial records, file annual financial statements (audited for larger companies), and adhere to employment and tax regulations. For online businesses, comply with the E-Commerce Act, Electronic Signature Law, and Intellectual Property Law.

Timeline and Costs: The registration process typically takes 2–4 weeks, assuming all documents are complete. Costs include:

• Notary and administrative fees: €1,000–€2,500.
• Minimum share capital for GmbH: €17,500 (cash portion).
• Incorporation costs: Approximately €7,400 in the first year, including legal and administrative fees.

Main Things to Keep in Mind

1. Legal and Tax Compliance
   Austria has strict regulations for accounting, tax filings, and employee rights. Engage a local tax advisor or lawyer to navigate corporate tax (23%), VAT (20%), and social security obligations. Non-compliance can lead to penalties or legal disputes.
2. Residency and Visa Requirements
   EU/EEA or Swiss citizens can register a business without restrictions. Non-EU entrepreneurs may need a residence permit or visa to operate a business, especially for sole proprietorships or partnerships. A “permanent representative” in Austria is required for non-EU/EEA companies opening branches.
3. Trade Licenses for Regulated Activities
   Certain professions (e.g., engineering, pharmacy, or construction) require specific licenses or proof of qualifications. Ensure you or an appointed trade manager meet these requirements. Free trades are simpler but still require registration.
4. Minimum Capital Requirements
   For a GmbH, the minimum share capital is €35,000, with €17,500 paid upfront. Startups can begin with €10,000 (with €5,000 in cash) but must increase to €35,000 within 10 years. Plan your finances to meet these requirements.
5. Cultural and Language Considerations
   Formal business etiquette and punctuality are valued in Austria. Learning German can enhance your prospects, as it’s the primary business language. Small and medium-sized enterprises dominate the economy, so tailor your approach to this market.
6. Use of Digital Tools
   Austria’s Business Service Portal (USP) allows online company registration, digital notarization, and administrative tasks. Leverage this for efficiency, but ensure all documents are accurate to avoid delays.
7. Employee Regulations
   If hiring staff, comply with Austria’s robust labor laws, including mandatory health insurance, pension contributions, and unemployment insurance. Register employees with the ÖGK before they start work.

Benefits of Registering a Company in Austria

1. Strategic Location
   Austria’s central European position, bordering eight countries (e.g., Germany, Switzerland, Italy), provides easy access to the EU’s 500-million-consumer market. Its well-developed transport infrastructure supports efficient trade.
2. Stable Economy and Political System
   Austria ranks among the top 30 global economies, offering a reliable and prosperous environment for businesses. Its political neutrality and EU membership ensure stability and adherence to international standards.
3. Business-Friendly Environment
   The registration process is transparent and streamlined, taking as little as 2–4 weeks. The Business Service Portal simplifies administrative tasks, and digital notarization reduces paperwork. Incentives like the New Companies Promotion Act (NeuFöG) exempt startups from certain fees.
4. Tax Advantages
• Corporate Tax: A competitive 23% rate, with a minimum tax of €500–€1,000 for the first five years. 
• Double Taxation Agreements: Over 90 agreements prevent foreign companies from being taxed twice. 
• R&D Tax Credits: Companies engaged in research and development can claim a 14% tax credit, fostering innovation. 
• Group Taxation: Allows tax optimization for companies with multiple entities.
5. Skilled Workforce
   Austria boasts a highly educated and skilled labor pool, ideal for industries like technology, manufacturing, and services. Small and medium enterprises, which make up 99.6% of businesses, employ nearly two million people, ensuring a robust talent market.
6. Funding and Incentives
   Austria offers grants and subsidies for startups, SMEs, and R&D-focused companies. Programs through Invest in Austria provide financial support, reducing the burden on new businesses.
7. High Quality of Life
   Austria’s high living standards and cultural richness make it an appealing destination for entrepreneurs and employees, enhancing business operations and staff retention.

Conclusion

Registering a company in Austria is a straightforward process, particularly for a GmbH, with a clear path from choosing a business structure to completing tax and social security registrations. Key considerations include compliance with local laws, securing necessary licenses, and meeting capital requirements. The benefits—strategic location, a stable economy, tax incentives, and access to a skilled workforce—make Austria an excellent choice for entrepreneurs looking to establish a presence in Europe. For personalized guidance, consult with legal and tax professionals or leverage resources like Invest in Austria or the Austrian Federal Economic Chamber (WKO). Start your business journey in Austria today and tap into one of Europe’s most dynamic markets.

This article is carefully prepared by the team of dedicated professionals from Migrate Global.