Establishing a Zweigniederlassung Osterreich (branch in Austria) or Zweigniederlassung Wien (branch in Vienna) is not a very difficult process, as the Austrian government is trying to encourage the foreign investments by having just a few requirements at registration and not having a discriminatory policy for the foreign investors.
A branch established in Austria, even though is not considered a legal entity, has the same rights and obligations as any registered legal entity in Austria.
As a basic requirement to operate a branch in Austria is having a registered office here that may be physical or virtual.
Before starting any commercial activities, the parent company’s representatives must submit at the Companies Register specific notarized and translated into German documents:
- a copy of the foreign company’s registration certificate,
- the articles of incorporation or the memorandum of association,
- the certificate of good standing of the foreign company,
- the decision of opening a branch,
- the address of the branch’s registered office,
- the branch’s representative (not necessary to be an Austrian resident).
These documents must be submitted no longer than a month since the decision of incorporation.
After registering with the Commercial Registry, the branch created in Austria must also apply for registration for VAT, even though the tax authorities were already announced regarding the new incorporation.
A bank account must be opened by the foreign company in the name of the branch. For this, the foreign company’s representative must come in person in Austria.
A few disadvantages occur though in the administration of a branch in Austria. The parent company is totally responsible for the branch’s acts and the representative of the branch may be liable for the tax debts.
A branch opened in Austria must also have a resident representative to deal with the local tax authorities and must carry the same name as the parent company (but with the termination “Zweigniederlassung”).
Even though it is not considered a legal entity, the same taxes must be paid and annual accounts must be deposited every year. Also, VAT returns must be submitted every month or quarterly. The financial statements of the foreign company must be submitted to the Companies Register. Annual audits are necessary for this type of business.
The parent company is often preferred by the clients or banks instead of the branches, because of the higher degree of safety.