Relocating to Austria to Start a Business: What You Should Know

Austria, a country known for its rich cultural history, stunning landscapes, and high standard of living, is also a thriving hub for entrepreneurs looking to start and grow a business. With its strategic location at the heart of Europe, access to the EU single market, and a business-friendly environment, Austria offers numerous advantages for both local and international entrepreneurs. If you are considering company formation in Austria, this guide will walk you through everything you need to know about relocating your business to Austria, from legal and regulatory requirements to practical steps for setting up and thriving in this dynamic economy.

Why Austria Is an Attractive Destination for Entrepreneurs

Before diving into the practical steps of starting a business in Austria, let’s first explore why this country is an appealing choice for entrepreneurs in 2024:

Strategic Location in Europe: Austria's central location in Europe makes it an ideal gateway for businesses aiming to access the EU market of over 450 million people. The country is well-connected by road, rail, and air, facilitating the smooth movement of goods and services across Europe.
Stable Economy: Austria has a robust and stable economy with a high standard of living. The country’s political and economic stability is underpinned by sound fiscal policies, low inflation, and a highly skilled workforce. It has a competitive business climate, making it ideal for startups and established businesses.
Favorable Business Environment: Austria is known for having an efficient bureaucracy and transparent regulations that support entrepreneurship. The process of company formation is straightforward, and the country’s legal framework protects both local and foreign investors.
Innovation and Technology Hub: Austria is becoming increasingly recognized for its focus on innovation and research and development (R&D). The country offers various grants and incentives for businesses that are involved in tech, digital services, and other innovative industries.
High Quality of Life: Austria consistently ranks high in global quality of life indexes, making it a great place to live and work. For entrepreneurs, this means attracting talent from all over the world who are eager to live in a secure, prosperous, and well-developed environment.
Access to Talent: Austria’s excellent education system, combined with its status as a member of the European Union, allows entrepreneurs to tap into a highly educated workforce. Additionally, Austria attracts skilled workers from other EU countries and beyond, making it easier to hire top talent for your business.

Key Steps for Starting a Business in Austria

Starting a business in Austria requires careful planning and knowledge of the legal, regulatory, and financial frameworks. Below are the key steps involved in company formation in Austria.

1. Choose the Right Business Structure

One of the first decisions you’ll need to make when starting a business in Austria is determining the right legal structure for your company. The most common business structures in Austria include:

Sole Proprietorship (Einzelunternehmen): Ideal for individuals who want to run the business alone. It is easy to set up but comes with unlimited personal liability for the business owner.
Limited Liability Company (GmbH): The GmbH is the most popular business structure in Austria, offering limited liability for the owners. It requires a minimum capital investment of €35,000, of which at least €17,500 must be paid up front. This structure is ideal for small to medium-sized businesses.
Stock Corporation (AG): This structure is best suited for larger businesses or those looking to raise capital by issuing shares. The minimum capital requirement is €70,000. It involves more complex regulatory requirements and is usually chosen by larger corporations.
Partnership (OG/KG): This structure involves at least one general partner with unlimited liability and one or more limited partners. It is more complex than a sole proprietorship but still relatively easy to set up.

For most entrepreneurs relocating to Austria to start a business, the GmbH is the most commonly chosen structure because it combines limited liability with a relatively straightforward setup process.

2. Register Your Business

Once you have chosen your business structure, the next step is to officially register your company. This involves several steps:

Commercial Register (Firmenbuch): All businesses in Austria, except sole proprietorships, must be registered in the Austrian Commercial Register. This process involves submitting documents such as:
- Articles of Association or partnership agreement.
- Proof of capital investment (for GmbH, a minimum of €17,500).
- Personal details of the directors and shareholders.
Tax Registration (Finanzamt): You will need to register your company with the Austrian tax office (Finanzamt) to obtain a tax identification number (Steuernummer). This is required for VAT registration (if applicable) and other tax obligations.
VAT Registration: If your business generates annual revenues over €35,000, you must register for VAT. Austria’s standard VAT rate is 20%, with reduced rates for certain products and services.
Social Security: If you hire employees, you will also need to register for social security. This ensures that your employees are covered for healthcare, pension, and unemployment benefits.

3. Open a Business Bank Account

Opening a business bank account is essential for managing finances, handling payments, and ensuring legal compliance. Austria’s banking system is well-developed, and many local and international banks provide business banking services.

To open a business bank account in Austria, you will typically need to provide:

Your company’s registration documents.
Proof of address for your business.
Identification documents for the company’s directors and shareholders.

Once your bank account is open, you can start conducting business transactions, processing customer payments, and handling operational expenses.

4. Understand Taxation and Financial Obligations

Austria has a transparent tax system that is favorable to businesses, but it is important to understand the taxes you’ll be responsible for as a business owner. Key taxes for businesses in Austria include:

Corporate Income Tax (Körperschaftsteuer): The corporate tax rate in Austria is 25% on net income. However, Austria offers various tax incentives, particularly for companies engaged in research and development (R&D) and innovation.
VAT (Value-Added Tax): The standard VAT rate is 20%, but there are reduced rates for certain products, such as food and books. As mentioned earlier, if your business’s revenue exceeds €35,000 annually, you will need to register for VAT.
Social Security Contributions: As an employer, you must contribute to social security for your employees. The rates depend on the level of wages paid.

It’s essential to consult with a tax advisor or accounting professional to ensure that you comply with Austria’s tax laws and optimize your financial obligations.

5. Hire Employees

If you plan to hire employees for your business, you will need to navigate Austria’s labor laws and employment regulations. Austria has strong labor protections, and it is important to understand your obligations as an employer.

Employee Contracts: Austrian law requires that employment contracts be in writing. The contracts should outline the terms of employment, including salary, work hours, and job responsibilities.
Minimum Wage: Austria does not have a national minimum wage, but there are industry-specific agreements that set minimum salary standards.
Work Permits and Visas: If you are not an EU/EEA/Swiss citizen, you will need to apply for a work permit to employ foreign nationals. There are various work permits available depending on the type of employment.

6. Find an Office or Workspace

Though many online businesses can operate remotely, having a physical office or workspace can be an advantage. Austria offers a variety of coworking spaces and office locations in major cities such as Vienna, Salzburg, and Graz. You can choose from flexible office spaces, serviced offices, or traditional office leases, depending on your needs.

Many entrepreneurs choose Vienna for its thriving business ecosystem and access to government support for startups. The city is home to many international corporations, tech startups, and a growing ecosystem of investors and innovation hubs.

7. Consider the Costs Involved

Starting a business in Austria can come with some upfront costs. Some typical costs include:

Company Formation Fees: The cost of setting up a GmbH is typically between €1,500 and €3,000, depending on the complexity of the business structure and the legal assistance required.
Capital Requirements: A GmbH requires a minimum capital investment of €35,000, with at least €17,500 paid up front.
Bank and Registration Fees: There are also costs associated with opening a business bank account and registering your company, which can amount to a few hundred euros.
Legal and Tax Advisory Fees: Professional legal and tax services can cost anywhere from €500 to €2,000, depending on the complexity of your business.

B2B Hub: Helping You with Company Formation in Austria

Relocating your business to Austria and navigating the company formation process can be complex, but B2B Hub offers comprehensive company formation in Austria and can assist with every step of the process. Whether you need help with business registration, tax optimization, or finding the right business structure, B2B Hub provides expert guidance and services tailored to your specific needs.

For inquiries, please contact us at tel:+447700183107, visit our website at b2bhub.ltd, or send us an email at reg@b2bhub.ltd.

By partnering with B2B Hub, you can ensure a smooth transition as you establish your business in Austria and tap into the country’s vibrant and growing economy. Let us help you unlock the potential of Austria as your business’s new home.