How to start a business in Austria
Did you know Austria is one of Europe’s most prosperous nations? Its GDP per capita is $48,586. With a strategic location, stable politics, and economics, plus great tax benefits, it’s perfect for entrepreneurs.
Starting a business in Austria varies based on where you live and the business type. This guide explains the key steps to launch your business here. It covers the local business scene, laws, how to find funding, and running the show. It’s for anyone, EU citizen or not, who wants to start a business dream in Austria.
Key Takeaways
- Austria’s strategic geographic location, stable political and economic environment, attractive tax incentives, and productive labor force make it an attractive destination for entrepreneurs.
- The process of starting a business in Austria can vary depending on residency status and the type of business entity chosen.
- This guide will cover the essential steps and requirements for launching a venture in Austria, including understanding the local business culture, navigating legal and regulatory aspects, securing funding, and managing operations.
- Both EU citizens and non-EU expats will find the information and resources necessary to turn their business dreams into reality in Austria.
- Austria’s thriving startup ecosystem and small and medium-sized enterprises (SMEs) contribute significantly to the country’s robust economy.
Understanding Austrian Business Culture
If you’re an entrepreneur looking to start a business in Austria, understanding the Austrian business culture is key. Austria is known for its formal and polite business practices. These can greatly impact how successful you are in the professional world.
Formal Approach and Etiquette
Formality matters a lot in Austrian business etiquette. Meetings must be set up beforehand and must stick to their schedules. When working with others, using formal titles shows respect. This is vital for gaining trust and a good reputation in the Austrian market.
Importance of Punctuality and Agendas
Being on time is crucial in the Austrian business environment. It’s expected that you show up for meetings either on time or a little early. Using detailed agendas for meetings keeps things on track and productive.
Significance of German Language Proficiency
In Austrian business, German is the main language. Knowing the language well can improve your business practices in Austria. It makes talking to clients, partners, and officials easier. This can lead to more business opportunities.
Overview of the Austrian Economy
In 2017, Austria saw its businesses shine bright. This was mainly thanks to SMEs, which made up 99.6% of all businesses. They employed over two million people and had sales exceeding €482 billion. This shows how important these companies are to Austria’s economy.
Role of Small and Medium Enterprises
SMEs are key to Austria’s prosperity, adding to job numbers, bringing in new ideas, and pushing the economy forward. They work across many sectors, including construction, electronics, and tourism. Their role is vital in keeping the country’s economy varied and strong.
Self-Employment Trends and Statistics
Though Austria isn’t big on self-employment compared to some places in Europe, it’s picking up speed. The rate in 2017 was 10.6%, just below the EU’s 13.7% average. More Austrian men are self-employed than women – 12.9% compared to 7.9%. Still, the country sees lots of new businesses, with 35,371 startups in 2021.
Prominent Industries and Sectors
Austria is known for a wide variety of industries that help its economy thrive. Notable sectors include construction, electronics, and tourism. These fields are key in promoting new ideas, boosting efficiency, and growing the economy. They also make Austria a top choice for starting a business or investing.
Legal Requirements for Starting a Business
Starting a business in Austria is easy for those from the EU or with an Austrian resident card. But, it’s harder for people from outside the EU. Everyone must meet basic rules to start a business in Austria.
Eligibility Criteria for EU and Non-EU Citizens
You need to be at least 18 and have a clean record to start a business in Austria. If you’re from the EU or have an Austrian resident card, it’s easier. You can start your business without many extra steps. For non-EU citizens, getting a residence permit like the Red-White-Red Card is a must before you can register a business.
Trade License and Commercial Registration
Every entrepreneur in Austria, whether citizen or not, must get a trade license. This is from the local district authority. You’ll give your personal info, business location, and type of business activity. You also need to register your business with the Austrian Commercial Register. It includes your personal info, details about your business, and paying the registration fees. Non-EU citizens must first get their residence permit before they can fully register their business.
Types of Business Entities in Austria
In Austria, entrepreneurs can choose from several business types. Each has unique features and needs. It’s important to pick the right one when starting a company.
Limited Liability Company (GmbH)
The GmbH is Austria’s most popular business form. It needs at least €35,000 to start. Many small and medium businesses like it. It protects owners from using their personal money to cover debts.
Joint-Stock Company (AG)
Larger businesses may choose the AG form. It’s like the GmbH but with a higher start-up cost of €70,000. The AG is good for companies that want to grow big or need a lot of money.
Partnerships and Sole Proprietorships
Partnerships come in different types, like the OG and KG. The OG needs less paperwork and no starting money. A KG gives one partner limited liability. Sole proprietorships are easy to set up, needing just a business license. There’s no minimum capital needed.
| Business Entity | Minimum Capital Requirement | Liability Protection | Suitability |
|---|---|---|---|
| Limited Liability Company (GmbH) | €35,000 | Limited | Small and medium-sized businesses |
| Joint-Stock Company (AG) | €70,000 | Limited | Larger enterprises seeking significant funding |
| General Partnership (OG) | None | Unlimited | Businesses with fewer formalities |
| Limited Partnership (KG) | None | Limited for one partner | Businesses with limited liability for one partner |
| Sole Proprietorship | None | Unlimited | Simple business structures |
Starting a Business in Austria as an Expat
Beginning a business in Austria is harder for those outside the EU. They must get a permit or visa first. The Red-White-Red Card is good for entrepreneurs. It is for self-employed people from abroad.
Visa Options for Non-EU Entrepreneurs
Applicants for the Red-White-Red Card need to meet certain conditions. These include having €100,000 in capital and creating jobs in Austria. They must also show they will bring new technologies. There is also a Start-up Founders option. This needs €50,000 and an innovative business plan.
Requirements for the Red-White-Red Card
Foreign residents need to register their business in the Austrian Commercial Register. They must get the right trade licenses too. For non-EU citizens, the process is more complex. It involves more paperwork and steps.
Registering a Business as a Foreign Resident
As a foreign resident, starting a business in Austria needs several steps. You must register the business. This includes giving personal and business details and paying fees. All documents need to be in German and notarized.
How to start a business in Austria
Starting a business in Austria is a process with several important steps. First, you need to get a trade license from the local authority. You will need to share your personal info, where your business will be, and what it will do.
Obtaining a Trade License
To get a trade license, you must apply to the local authority. They look after this process. Your application will need details about yourself, your business plans, and where your office will be.
Registering with the Commercial Register
Next, register your business with the Austrian Commercial Register. You will have to provide information about you and other business owners. This includes details of your business and paying the registration fees. Make sure all documents are in German and notarized.
Additional Registrations and Compliances
After you have your trade license and register commercially, other steps are needed. You must also register for social security. This ensures your employees have the right coverage.
With all the necessary approvals and registrations, your business is set to start in Austria.
Taxation and Financial Considerations
Operating in Austria means businesses must deal with various taxes. They pay a corporate tax rate of 25% on their total income and net profit. Also, they face a 20% value-added tax (VAT) on goods and services. For those running the show solo, the tax rate changes based on what they make, from 23% to 50%.
For limited liability companies (GmbH), there’s a minimum share capital of €35,000. At least €17,500 must be in cash. If it’s a joint-stock company (AG), they need €70,000 as their starting capital. But for partnerships and those going it alone, there’s no specific amount they must have.
| Tax Type | Rate | Applicable Entity |
|---|---|---|
| Corporate Tax | 25% | Companies |
| VAT | 20% | Goods and Services |
| Income Tax for Sole Proprietors | 23% – 50% | Sole Proprietors |
| Minimum Capital Requirement (GmbH) | €35,000 | Limited Liability Companies |
| Minimum Capital Requirement (AG) | €70,000 | Joint-Stock Companies |
Business Banking and Accounting
To start a business in Austria, you need a local bank account. This is very important for your company’s money matters, payments, and keeping correct financial records. When you pick a bank, think about its reputation, fees, and services for your business needs.
Opening a Business Bank Account
Starting a business bank account in Austria means you have to show some personal ID, your company details, and make the first deposit the bank asks for. You might also need to prove your business is registered and get a tax number. Some banks want more, like a business plan or where you live, especially if you’re not from the EU. It’s smart to look into different banks to find the best one for your business.
Bookkeeping and Financial Reporting
Keeping accurate financial records and reporting well are key for your business to do well and obey the law in Austria. Every company in Austria needs to have correct financial records, like reports on earnings, what you own and owe, and how money moves in and out. Depending on how big and what kind of business you have, you might need an accountant or bookkeeper. Good and on-time financial reports will help with taxes and making smart choices for your business.
