A central European region that is circled by various landmasses across its borders. The central European location implies that one can efficiently and successfully manage a broad range of business ventures in this country.
With a population of about 9 million and an area space of 90,000 sq km, this country offers a wide range of opportunities and mediums for one to establish and grow their business in that particular geographical area.
Foreign organizations and directors can set up their entities in this region with an ulterior perspective of attaining remuneration and incorporation benefits with an opportunity to migrate with their businesses as well.
Why register a company in Austria?
There are several reasons to register a company in Austria:
- Austria is an attractive country for foreign investors due to its stable political system and skilled workforce.
- Investors can take advantage of a transparent, flexible process for company registration and favorable legislation for opening new businesses.
- Austria is a member country of several international organizations, including the World Bank and the World Trade Organization.
- Investors can benefit from the assurance of the highest international standards.
- Austria’s standard corporate tax rate is 25%. Investors must also draw up the Articles of Association, make cash contributions to share capital, and register the company in the Company Register.
Procedure for Company Registration in Austria
The procedure to register your company in Austria is been explained in 8 steps:
1. Deciding the legal structure
The first phase of the Austria company registration is to choose the organizational structure of the firm.
2. Have your business name and activity approved
The second step involves getting the business name and operation authorized by the Austrian Commercial Registry Office, or HRA. It is the government organization responsible for regulating the formation of corporations, their registration, as well as other services related to company incorporation.
You may be required to submit particular personal credentials to receive approval.
3. Create and notarize your firm’s statutory documents
The third step is to prepare and notarize the statutory documents of your business.
4. Collect & submit the necessary documents to the Trade Register
The necessary registration paperwork should be gathered, prepared, and submitted to the Trade Register for approval.
5. Open a corporate bank account
The last step involves opening a corporate bank account to deposit the required share capital.
6. Registering for tax purposes
It is important to register for tax-related activities.
7. Signing up workers for social security
It is important to sign up workers for social security.
8. Acquiring the corporate seal
Once the corporate has been incorporated, you must acquire the corporate seal.
Eligibility Criteria for Austria Company Registration
The following eligibility criteria is to be met for company registration in Austria:
Name of the Company
Austrian company names must begin with GmbH. We can perform a company name check with registries to confirm if the name you are interested in is still available. You can reserve the name free of charge for 10 days. Some words, like “Austria”, are restricted and require permission from The Commercial Register.
Registered Office
The companies must have a registered address. This physical address must be in Austria. As part of our incorporation services, we can provide a registered office.
Directors
Austrian companies can only be formed by one director. There are no restrictions on nationality or residence.
Shareholders
Austrian company formations only require one shareholder. This can be the same person as the company director. Shareholders of corporations are permitted.
Share capital
The minimum share capital of a GmbH should be EUR 35,000. A minimum of 50% (EUR 17.500) must be paid up before incorporation. Additionally, a bank certificate verifying this status is required at incorporation.
Timescale
In Austria, it takes two weeks to form a GmbH company.
Requirements for Company Registration in Austria
All the requirements are been explained below:
- One shareholder minimum
- One managing director is required. (No residency conditions);
- A shareholders’ agreement/establishment declaration (must be notarized);
- Managing director appointment;
- Signatures on the specimens;
- Minimum capital requirements for shares of 35,000 euros (at least 50% must be paid on the day of company establishment);
- Company Extract and Financial Statements;
- The bank account of the company (capital payments contribution);
- Capital contribution payment evidence;
- Tax identification numbers are obtained from an authority that handles tax.
Documents Required To Register a Company in Austria
For Austria company registration, you’ll need the following documents:
- Notarized passports or IDs for directors and shareholders.
- Certificate of Incorporation
- Articles and Memorandum of Association
- Documents that the company’s statutory authorities
- A lease agreement that includes an address local to the location of the company in Austria.
- Documentation required by directors and managers e.g., copies of IDs, passports Residence permits, etc.
- Information on the distribution of shares between shareholders.
- Austrian bank account details.
NOTE: All the above documents need to have been filed in the Trade Register to obtain the Certificate of Incorporation of the Company. They should translate into German and notarized to be considered official copies.
After approval of all registrations and the payment of the fees, your business can legally be able to conduct business.
Types of Business Structures in Austria Company Registration
There are various kinds of legally-formed entities that are available for those who wish to incorporate a firm in Austria:
J-stock-company (AG)
A joint-stock corporation, also known as a company, is restricted by shares. A stock market is a place where shares can be traded. The Austrian law stipulates a single supervisory board for each joint-stock company that has a minimum of three members. Joint-stock companies are legal entities that can be created with one or two shareholders and at least EUR 70,000 in principal investment.
Private Limited Liability Company (GmbH)
Private limited liability companies are among the most sought-after kinds that legal businesses can use. Its popularity is because it has more influence over the corporate legal system, as well as an option for a smaller percentage of equity. The minimum investment required for a business structure of this type can be EUR 35,000, half of which has to be deposited at the local bank before the Austrian company registration.
General Partnership (OG)
In Austria, the term “open” or general partnership is when two legal entities (at the very least) or individuals form a partnership and function as one entity. In general partnerships, each partner is responsible for the full sum, both individually and collectively. A trade license, as well as Registration certificates issued by the Austrian Commercial Register, are the sole two formal requirements for establishing the general partnership.
Limited partnership (KG)
The formation of a company is similar to general partnerships in the form of a limited partnership. One distinct feature of KG is the requirement that at least one partner has to be a general partner and take all responsibility for the management of the company, its obligations, as well as rights. The remaining members solely have responsibility for their investments because they are limited partners. There are formal rules for limited partnerships that are similar to a general partnerships.
Silent partnership (stages)
The structure is like a limited partnership, where only one partner is responsible for the entire responsibility of business. The major distinction is that a silent partnership does not assign any management or responsibility to the silent partners.
Sole proprietorship
It is the second-most popular kind of business structure that is legal in Austria in which the entire entity is a single person. This kind of self-employment provides the owner’s independence in investing as well as simple accounting and a low tax burden (though taxation may vary based on the variation in turnover).
Advantages of Austria company registration
The Austria company registration has many advantages due to the great economic climate and central area of Austria:
A small initial investment (only 5000 EUR):
The process of Austrian company registration requires a small initial investment. It is possible to register a company in Austria with just 5000 EUR share capital. However, the share capital needs to be raised to 35000 EUR within 10 years.
Simple registration:
The company registration is a remote process which can be completed in 10 days’ time by keeping complete transparency.
EU VAT number as of today:
Rapid EU VAT registration number for the Austrian GmbH is issued immediately upon the filing of the Austrian VAT number.
Corporate tax and low VAT:
Austria functions at 20% of VAT and imposes Corporate Income Tax at 25%.
Affordable economic conditions:
A central European country with a sustainable standard of living.
A cost-effective registration processes
The government of Austria incentivizes new businesses by providing them with additional discounts and levying them from incorporation taxes.
Costs for Company Formation in Austria
The cost of incorporating a business in the first year is EUR 7400. This includes fees for the following:
- Enrollment fees
- Registration of your business and payment of taxes
- Austrian legal document preparation
The corporation’s annual expenses in the upcoming year could total about 3500 euros. Additionally, you must pay EUR 47.30 to obtain a trade license in Austria. The typical fee for Austrian company registration is 14,920, which covers all administrative fees, company establishment, establishing a domestic business bank account, and other costs.
Taxation Structures in Austria
Understanding the tax system is crucial whether you’re a resident of Austria or operate a company there.
Here are the numerous taxes in Austria:
- Personal income tax: Every person who resides in Austria is liable for paying Austrian income tax on all of their international earnings, whether any from a trade or company, an occupation, a job, investments, or real estate. Non-residents, however, pay personal income tax on specific sources within the nation.
- Corporate income tax: If a corporation has its registered office in Austria, it is liable to unlimited taxation on all of its earnings. A non-resident business is only partially taxed in Austria on several types of earnings. The rate of CIT in Austria is 25%.
- Withholding taxes: On dividends sent to an overseas parent business, under Austrian domestic legislation, there is typically a WHT of 25% for companies and 27.5% for other recipients.
Conclusion
Austria is renowned for its strong economy, welcoming business climate, and advantageous position in the middle of Europe which makes it a desirable location for setting up businesses by both local and domestic investors. Company registration in Austria is a relatively straightforward process as long as the correct procedure is followed. Businesses in Austria can be incorporated in person or remotely and it takes approximately 10 days to set up a business in the nation.
If you are looking to register a company in Austria, you can consult our team of professionals at OnDemand International. Our professionals are highly experienced and can assist you in setting up a business and can further guide you with all the legal requirements.
