The company formation procedure in Austria is mainly based on drafting the articles of association and notarizing the specimen signatures, the passport copies and some other special forms requested by the Austrian authorities. An economic entity established in Austria requires a registered office and a bank account necessary for depositing the capital. The entities established in Austria are advised to hire a local accountant before beginning the commercial transactions.
Types of Austrian companies
The individuals who can afford to bring a contribution to the capital of an entity and who desire to have their personal assets protected in case of bankruptcy can incorporate an Austrian company.
For instance the Austrian joint stock company (Aktiengesellschaft) is a company type designed for large businesses. A minimum share capital of EUR 70,000 is necessary to start this type of company. One shareholder is required to start this type of business with his liability limited by his/her contribution to the capital. The capital is divided into shares which can be offered to the public.
The daily decisions are taken by the management board, appointed by the supervisory board which is elected by the highest instance in a AG, the general meeting of the shareholders.
The most popular type of business in Austria is GmbH (Gesellschaft mit beschränkter Haftung) which can be established by limited liability members with a minimum share capital of EUR 35,000, from which at least EUR 17,500 must be deposited at registration. A general rule states that EUR 7,000 is the minimum contribution of each shareholder of the Austrian GmbH. The shares of an Austrian GmbH cannot be freely traded to the public. The management of this type of business is assured by a director appointed by the highest instance in a GmbH, the general meeting of the shareholders.
Usually the individuals (and sometimes some corporate bodies) willing to share the same liabilities and who cannot provide a minimum share capital can open a partnership which can be general, limited, civil or silent.
The most popular form of Austrian partnership is the general partnership, formed by two or more individuals or corporate bodies united under the same name (usually the partners’ name) with the same economic objectives. The individuals who decide to incorporate a general partnership in Austria must be aware that all the members have full liabilities for the company’s debts and have equal rights to manage the partnership. A major advantage is that no minimum contribution must be delivered by its members at the time of incorporation.
If there are at least two types of partners from which one has full liability on the entity’s debts and can take the major business decisions, while the other one has his liabilities limited by the contribution brought to the capital and has no decisional power, they together can incorporate limited liability partnership in Austria.
The third form of partnership which can be incorporated in Austria is the silent partnership formed only by silent partners and which is not considered a legal entity.
A type of partnership for professionals this time is the Austrian civil law partnership which is formed by members who combine their knowledge in order to achieve certain economic objectives. A certification of their knowledge owned by each individual must be registered before being part of this type of partnership. It is reorganized as Austrian general partnership, if the annual turnover in one year is above EUR 600,000 EUR or in two consecutive years is above EUR 400,000 EUR.
If a foreign entrepreneur is willing to open a business here, he/she can opt for opening a branch (Zweigniederlassung) which is not considered a legal entity, but extensions of their parent companies that will provide the capital, all their assets and the management. One of the particularities of this type of business is that the name of a branch is the same as the name of its parent company, followed by the termination Zweigniederlassung Osterreich (branch in Austria) or Zweigniederlassung Wien (branch Vienna).
An Austrian representative office can be incorporated in Austria by the foreign companies, but just like the branches, is not considered a legal entity. Moreover a representative office cannot perform any commercial activities at all and it is established more in order to explore the Austrian market and see the opportunities offered by it.
We invite you to watch a short video about company formation in Austria:
Company incorporation procedure in Austria
The first action a new entity must take in order to be incorporated in Austria is obtaining the confirmation from the Economic Chamber that the company is really a new enterprise. This procedure takes around one day and it is mandatory.
The document having all the company’s details and internal regulations is called articles of association and must be drafted by a lawyer before a notary. The Austrian entity’s articles of association contain:
- its unique name,
- the purpose and domain of the company's activity,
- the initial contribution of each shareholder and the final capital,
- the details related to the shares and the share capital,
- the names and addresses of the managing members,
- the name and addresses of the shareholders,
- the procedures of company transformation or liquidation.
Another step which must be taken before registering the Austrian company is depositing the minimum required capital in a bank account and receiving a confirmation deed.
The process of company registration of an Austrian entity at the local court (Handelsgericht) and publishing an announcement of formation in the Wiener Zeitung (local newspaper) takes around seven days and consists in depositing an application for registration along with the notarized declaration of establishment, the articles of association, the confirmation certificate from the bank that the minimum required capital has been deposited and the specimen signatures of the managing board or director (in case of a GmbH without a managing board).
The registration with the local Tax Office is made by depositing three forms along with the articles of association, the evidence that the entity was registered at the local court, the specimen signature of the representatives of the company. As a result, the Tax Office issues a tax identification number and a VAT number.
After that, the process of recording in the Trade Register (Gewerbeanmeldung) with the trade authority (Bezirksverwaltungsbehörde) is mandatory.
The last steps of incorporation are registration with the social security authority of all the entity’s employees and the registration with the municipality.
Economy overview in Austria
Austria attracts a wide range of foreign investors, especially in the service sector. This is due to the fact that Austria’s economy is one of the most advanced, very suitable for starting companies. The main partners of trading are Germany and Italy. The economic infrastructure in Austria is based on the well-developed industry, the sector of banking, as well as transportation, services and commerce.
For more details about how you can open a company in Austria or in other European countries such as Serbia, you may contact our specialists in company formation. If you are interested in other jurisdictions, we can put you in touch with our foreign partners, such as LawOfficeMalaysia.com.
Call us now at (+44)203-287 0408to set up an appointment with our lawyers in Vienna, Austria. Alternatively you can incorporate your company without traveling to Austria.
As a Bridgewest client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Austria.