AUSTRIAN COMPANY FORMATION
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 companies in Austria
Major forms of Austrian business. 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 70.000 EUR is necessary to start this type of business. One shareholder is required to start this type of business with his liability limited by its 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 an AG, the general meeting of the shareholders.
Opening a GMBH. The most popular form of business form of Austrian business is the GmbH (Gesellschaft mit beschränkter Haftung) which can be established by limited liability members with a minimum share capital of 35.000 EUR, from which at least 17.500 EUR must be deposited at registration. A general rule states that 7000 EUR 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.
Forms of business for individuals. 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 a contribution bring to the capital and has no decisional power 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. This type of partnership is reorganised as Austrian general partnership if the annual turnover in one year above 600000 EUR or in two consecutive years is above 400.000 EUR.
Forms of business for foreign entities. If a foreign business is willing to open a business here it can opt for opening a branch (Zweigniederlassung) which are not considered legal entities, but extensions of their parent companies which 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.
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 start-up 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 contains 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 publish an announcement of formation in the Wiener Zeitung 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 at the 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 Register trade (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.