Foreign companies seeking to
establish a presence on the Austrian market have several choices when it comes to the business form. Among these structures are the branch office, the
representative office, and the
subsidiary.
An Austrian subsidiary company falls under the scope of the Company Law and is subject an easy incorporation procedure. Our
company formation agents in Austria can explain the requirements related to
opening a subsidiary.
Quick Facts | |
Applicable legislation (home country/foreign country) | Foreign country |
Best used for | - trading, - IT, - commerce, - pharmaceutical etc. |
Minimum share capital | - 10,000 EUR for private companies, - 70,000 EUR for public companies |
Time frame for the incorporation (approx.) | Appox. 5 week |
Management (local/foreign) | Local or foreign |
Legal representative required | No |
Local bank account | Yes |
Independence from the parent company | Independent legal form |
Liability of the parent company | The parent company bears no liability for its subsidiary/subsidiaries |
Corporate tax rate | 25% |
Possibility of hiring local staff | Yes |
Steps for opening a subsidiary in Austria
The following steps need to be completed for the creation of Austrian subsidiary company:
- select a company name and reserve it with the Companies House;
- draft the incorporation papers with a local notary office;
- set up a corporate account with a local bank;
- file the documents with the Trade Register and obtain a tax identification number;
- apply for the necessary licenses to start operating.
Voluntarily, the company can also be registered for
VAT purposes to simplify the operations once the mandatory registration threshold is reached.
Our company registration agents in Austria can help you set up this business form with the help of a power of attorney.
The minimum share capital for opening a subsidiary in Austria
At the level of 2022, foreign investors who want to open Austrian subsidiaries can choose the type of legal vehicle they want, however, they need to apply for various business licenses and permits.
Requirements for opening an Austrian subsidiary in 2022
The representatives of foreign companies can
open subsidiaries in Austria under the form of
limited liability companies which can be public or private. However, the most employed form is the private limited liability company.
Compared to the
branch office, the
subsidiary is an independent entity which requires the following documents for registration:
-
- a copy after the parent company’s certificate of registration issued by the Trade Register in its home country;
-
- the parent company’s resolution indicating the opening of the subsidiary in Austria;
-
- information about the representative of the company in Austria;
-
- the incorporation documents of the subsidiary which must be drafted in German.
All documents must be translated into German and certified by a local public notary.
Our
local agents can help with the preparation of the incorporation documents when
setting up a subsidiary in Austria in 2022.
Why choose a subsidiary to expand a foreign business in Austria in 2022?
Economic forecasts offered by the European Commission and the
International Monetary Fund provide for 4.9%, respectively 4.5% increase of Austria’s Gross Domestic Product (GDP) for 2022. This is a great incentive to
open a new Austrian company or expand an existing one. Foreign enterprises can choose the subsidiary because:
- - it offers great flexibility in terms of operations;
- - it will be treated as a domestic business;
- - the parent company can also benefit from the EU Parent-Subsidiary Directive;
- - it will operate as a fully independent business form.
The main trait of the subsidiary is that it does not depend on the foreign mother company. Compared to the branch office, it has full decision capabilities. It will also have an independent management, and most importantly, it can adjust its services and goods to the Austrian market.
Being treated as a domestic firm will enable it to gain access to incentives offered by the Austrian government.
Should you want to expand your company through a subsidiary in Austria in 2022, you can obtain the support of our specialists.
Hiring employees through a subsidiary in Austria
Running a business in Austria implies respecting the Employment Law here. However, the parent company can apply for work permits on behalf of the
employees it wants to transfer in Austria. This requirement applies only to non-EU citizens, as the rules are more flexible for EU ones.
In 2021, there were more than 1.5 million expats living in Austria, their number representing 16.7% of the population. While some of them worked for local companies, other had their own businesses here. This is a good indicator for those interested in a multicultural workforce who want to enjoy hard and soft skill of their employees.
Hiring employees in Austria also implies registering them for social security purposes here, situation with which our local consultants can help you.
It is also possible to open a subsidiary by
purchasing a shelf company in Austria. The advantage of choosing this option is skipping the incorporation procedure that can span over 5 weeks. No matte your option, you can count on our officers for support.
Licensing is also one of the phases to go through when opening a subsidiary. All foreign companies are required to register with the industry representing body, as well as with the municipal authorities before starting operating.
Management requirements for company formation in Austria
Setting up a subsidiary in Austria implies respecting local regulations that stipulate the requirement of having at least one director. The advantage lies in the fact that the person appointed can have any nationality and must not be an
Austrian resident. In practice, foreign companies appoint directors from the headquarters who
move to Austria and manage subsidiaries from here.
The same management requirements apply to private and public companies, no matter the selected legal entity. You can obtain more information on this requirement from our local advisors.
Why set up a subsidiary in Austria?
The
subsidiary company is an independent company which can complete a wide range of activities which are not limited to those of the parent company. Also, from a
taxation point of view,
the subsidiary is considered a tax resident company, therefore will benefit from the same
tax treatment as local companies.
Another interesting fact about opening a subsidiary in Austria is that it falls under the New Companies Promotion Law which provides for lower incorporation costs.
Why invest in Austria in 2022?
With an economy that relies mostly on exports that represent more than 50% of its GDP, Austria has important trading relations with two of the largest states in the world: its neighbor Germany and the United States.
Most foreign direct investments are attracted by the research and development (R&D) and technology sectors. In terms of foreign companies operating here, the USA alone had around 300 subsidiaries of 200 US-based enterprises at the end of 2019.
Political stability, good managerial culture, high productivity, and openness to international competitiveness are only a few of the qualities foreign companies consider for expanding their operations here.
If you decide to set up a subsidiary in Austria in 2022, you can ask our agents about the latest conditions to respect.