Looking to start a business in Austria as a foreigner but don’t know how to go about it? In this article, you’ll get detailed guidelines on how to successfully start and run your business in Austria, even as a foreigner.
But before we go into that, let’s find out if Austria is a good place for a foreigner to run a business.
Is Austria a Good Place for Business?
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Austria is a viable economic environment to do business as a foreigner. It has a diversified economy in which manufacturing is a major contributing sector. With a population of 25.74 million people and the 30th largest GDP in the world, Austria offers great business opportunities.
In addition, the country has a stable political system and a well-established rule of law. Even in terms of business operations, Austria has favorable laws and regulations for business owners, including foreigners. In fact, the World Bank ranked it 27th among the 190 countries examined for ease of doing business in the world.
With over 300 United States companies operating subsidiaries in Austria, it’s clear the market is viable enough for the international community. If you’re thinking of starting a business in Austria, you should know that over 12,500 foreign companies in the country won’t be there if they aren’t making profitable transactions.
Who is Eligible to Start a Business in Austria?
Anyone can start and run a business in Austria, as far as he meets the required conditions. But if you’re from Switzerland, or any EU country or from the European Economic Area, there are no requirements for you to start a business in Austria. However, if you’re not from those areas, you have to be at least 18 years of age and have a resident permit before you can run a business in the country. Furthermore, you need to register your business with the Austrian commercial register and obtain a license to run a business in the country.
Though it’s easy to start and run a business in Austria, the process can be challenging if you don’t know how to go about it. Let’s look at the steps you need to take to start a business in the country.
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Steps to Starting a Business in Austria as a Foreigner
Obtain a Residence Permit
Obtaining a residence permit is the first step you need to take to start a business in Austria. There are several ways to obtain an Austrian residence permit. But as someone who’s looking to start a business in Austria, what you need is a residence permit for entrepreneurs.
The process of obtaining an Austrian residence permit is straightforward. You need to apply with the Austrian embassy in your country, submit the required documents and wait for 90 days for it to be processed. However, if you’re from Switzerland, an EU or EEA country, you do not need a residence permit to move into Austria and start a business.
Determine the Legal Structure of Your Business
Once you’ve obtained a residence permit and moved to Austria, the next phase is to determine the legal structure of your business. The common business structures in Austria are the sole proprietorship (the Einzelunternehmen), the limited liability company (Gesellschaft mit beschränkter Haftung, or GMBH) and the joint-stock company (aktiengesellschaft). The others are subsidiaries and branch offices.
As a foreigner, the easiest business structure available to you is the sole proprietorship. However, the most welcome structure by the Austrian government is the limited liability company. And if you’re seeking a resident permit to invest in Austria, the only business structures available to you are the GMBH and the subsidiaries.
To start a GMBH in Austria, you need a minimum share capital of 35,000 euros, of which 17,500 euros must be paid in cash.
Submit Company Name and Details for Approval
Once you’re sure of the kind of business you want to start in Austria, the next phase is to get approval for your company name and activities. The Austrian Commercial Registry (also known as the HRA) is the government agency in charge of company registration and incorporation. You’ll be required to provide certain personal information at this stage, such as your address, your partners’ and directors’ names and the kind of business you wish to run in Austria.
Open an Austrian Bank Account
After your company name and details are approved, you go on to open an Austrian business account. This will enable you to make payments for the minimum share capital and other fees you need to pay for the business incorporation. It’ll also come in handy when you’re applying for a business license.
Notarize Your Company’s Statutory Documents
The next phase after you’ve opened an account and paid in the minimum share capital is to draft your company’s statutory documents and have them notarized. The documents required here are the memorandum of incorporation, a list of the directors, and other relevant documents needed for the business to legally operate in Austria.
Apply for Business License
After notarizing your company’s documents, the next phase is to submit the documents to the Trade Register for approval. Once the documents are approved, you’ll be issued a license to begin trading in Austria. This is the ultimate permission you need to start your business.
Register Your Business with Tax Authorities
Running a limited liability company in Austria doesn’t come with a tax exemption. You’re required to pay corporation and sales tax regularly. To do this, you need a tax number. Therefore, immediately after your business has been entered into the company register, the next thing to do is register with the tax authorities in Austria. For efficiency, you can hire a tax adviser to help you with this process.
Register Your Employees for Social Security
It’s required in Austria that if you must have employees, you have to register them for social insurance even before their first day of work. Your tax adviser can also help you with this process while filing your business for corporation and sales tax.
How Long Does it Take to Register a Business in Austria?
It takes approximately four weeks to register a business and begin operations in Austria. Business name registration can be done online within a few hours, while it takes approximately ten days to draft and notarize company documents and also document them with the trade register. Opening a business bank account can be done in one day. However, what takes a lot of time is the registration with the tax authorities. It takes about two weeks to do that in Austria, including the registration for employee social security tax.
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With a GDP of $390.80 billion, Austria is one of the wealthiest countries in the European Union. This shows the country has a high standard of living, making it possible for its citizens to afford a good, luxurious life. Starting a business in a country with low unemployment and poverty rates would always be a profitable venture.
The fact that it ranks as one of the easiest countries to do business in the world also means you won’t be frustrated with bureaucratic policies and procedures. Hopefully, this article has answered all the questions you have about setting up a business in Austria.