GENERAL INFORMATION

Austria has an area of 32,374 square miles and is completely landlocked. It is bordered by Switzerland, Germany, the Czech Republic, Slovakia, Hungary, Italy, Slovenia and Liechtenstein. The capital is Vienna and other cities are Graz, Linz, and Salzburg.

POPULATION

Austria has a population of approximately 8 million people. Its inhabitants belong to the major European groups, Germanic, Neo-Latin and Slav peoples.

POLITICAL STRUCTURE

Austria is a Federal Republic of nine provinces. It has a president (Bundespraesident) who is Head of State. He is elected directly by the people and holds office for six years. The Federal Government has powers of legislation. The Bund is entitled to legislate but the Laender are responsible for the implementation of such legislation. There are two chambers in the parliament, the Nationalrat and the Bundesrat, the latter representing the provinces.The Federal Government is headed by the Chancellor (Prime Minister), who is chosen by the president.

INFRASTRUCTURE AND ECONOMY

Austria became a full member of the EU in January 1995, entered the ERM and is now within the EURO zone. Austria's domestic market is relatively small and foreign trade is of major importance. The single biggest partner for imports and exports is Germany. Its geographical closeness to Eastern Europe has meant that substantial inward investments have been made into Austria by multinationals in order to reach these markets. As with most other industrialised countries, the service industry and particularly financial services have grown considerably over the last few years, with agriculture, forestry, and also tourism declining. Other industries are iron and steel, paper and engineering.

LANGUAGE

98 % of Austrians speak German, with various local dialects.

CURRENCY

The currency is the Euro, it was introduced in 2002.

EXCHANGE CONTROL

There is no exchange control in Austria other than certain reporting requirements for statistical purposes.

TYPE OF LAW

Civil Law

PROCEDURE TO INCORPORATE

As a legal entity, a company comes into existence upon registration in the commercial register. To form a company, an agreement of incorporation (for a GmbH) must be drawn up in German and has to be filed with the Commercial Court. For an AG, all founders need to sign the Articles of Association before a Notary. Founders may grant Powers of Attorney to our offices lawyers to represent them. All Austrian companies are obliged to become members of the local Chamber of Commerce.

RESTRICTIONS ON TRADING

Yes, for certain industries such as banking and insurance, as well as industries where the state retains the monopoly, i.e. broadcasting, tobacco importation and production, and gambling. Real estate acquisitions by foreigners are subject to approval.

POWERS OF COMPANY

A company has the same powers as a natural person.

LANGUAGE OF LEGISLATION AND CORPORATE DOCUMENTS

German

PRINCIPAL CORPORATE LEGISLATION

The Commercial Code and the Financial Reporting Act.

COMPANY INFORMATION

TYPE OF COMPANY

The two main types of company are the Joint stock company (AG) and the limited liability company (GmbH), which is the most widely used form of foreign investment. Other types include the general partnership (offene Handelsgesellschaft), the limited partnership (Kommanditgesellschaft) and the silent partnership (stille Gesellschaft).

SHELF COMPANIES AVAILABLE

Yes, but not used very widely.

TIME TO INCORPORATE

Six weeks to two months, branch registration can take longer.

NAME RESTRICTIONS

Names that are too similar or identical to already existing ones.

NAMES REQUIRING CONSENT OR A LICENSE

Banking and Insurance businesses and names, businesses within the financial services industry, and business names that include the term "Austria".

REGISTERED OFFICE REQUIRED

Yes, in Austria.

SUFFIXES TO DENOTE LIMITED LIABILITY

GmbH and AG

DISCLOSURE OF BENEFICIAL OWNERSHIP

No

COMPLIANCE

MINIMUM SHARE CAPITAL

CLASSES OF SHARES PERMITTED

• GmbH is based upon participations
• AG permits ordinary and bearer shares, voting or non voting, preference shares

BEARER SHARES PERMITTED

Only of AG

TAXATION

Corporate Tax rate is 25 % and capital gains are treated as regular corporate income. There is a minimum corporate tax of € 1,092 in the first years after incorporation and € 1,750 in the following years irrespective of profits.
Real Estate Transfer tax: 3.5 %

DOUBLE TAXATION AGREEMENTS

Austria has double tax treaties with more than 40 countries which include:
Australia, Belgium, Brazil, Bulgaria, Canada, China, Cyprus, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Luxembourg, Malta, New Zealand, Poland, South Korea, Spain, Sweden, Switzerland, Thailand, Turkey, UK, USA, Zambia.

SPECIAL FEATURES

Austrian law does not allow for the creation of Trusts, but it does recognise foreign Trusts. In order to foster investment, Austria has a regime for Holding companies. Under the international participation exemption, dividend income received from foreign subsidiaries or capital gains realised from the sale of the same are exempt from Austrian tax. In order to enjoy this tax treatment, certain criteria have to be met, i.e. a percentage of shares held in the foreign corporation for a certain period. The subsidiary must not be subject to tax of less than 15 % in its home country. Not more than 50 % of the Holding company must be owned by Austrian residents.