Establishing a Zweigniederlassung Osterreich (branch in Austria) or Zweigniederlassung Wien (branch in Vienna) is not a very difficult process, as the Austrian government is trying to encourage the foreign investments by having just a few registration requirements and not having a discriminatory policy for the foreign investors.
A branch established in Austria, even though is not considered a legal entity, has the same rights and obligations as any registered legal entity in Austria.
Below, our company formation agents in Austria explain the registration procedure for a branch office.
Table of Contents
Characteristics of Austrian branch offices
| Quick Facts | |
|---|---|
| Applicable legislation | For foreign countries |
| Best used for | Highly regulated activities, such as banking, insurance, financial operations |
| Minimum share capital | No |
| Time frame for the incorporation (approx.) | Approx. 7 weeks |
| Management | Local for non-EU and non-EEA companies |
| Legal representative required | Yes, for non-EU and non-EEA enterprises |
| Local bank account | Yes, but not mandatory |
| Independence from the parent company | Dependent on the parent company |
| Liability of the parent company | Full liability on the branch office’s debt and obligations |
| Corporate tax rate | 25% on profits obtained in Austria |
| Possibility of hiring local staff | Yes |
In order to be considered a branch office, a company registered under the Austrian Company Law must:
- be a permanent establishment and represent the interests of a foreign company in Austria;
- depend on the parent company when it comes to the activities it undertakes in Austria;
- bear the same name as the parent company and be registered with the Austrian Trade Register;
- foreign companies outside the EU and EEA must appoint a local representative for their branches.
Our local agents can act as representatives when opening an Austrian branch office.
Requirements for opening a branch office in Austria in 2023
As a basic requirement to operate a branch in Austria in 2023 is having a registered office here that may be physical or virtual.
Before starting any commercial activities, the parent company’s representatives must submit at the Companies Register specific documents notarized and translated into German:
- a copy of the foreign company’s registration certificate, issued by the Trade Register in its home country;
- the articles of incorporation or the memorandum of association of the branch office;
- the certificate of good standing of the foreign company, issued by the Trade Register;
- the minutes of the management board’s meeting presenting the decision of opening a branch;
- the address of the branch’s registered office in the Austrian city where it will operate;
- the branch’s representative (not necessary to be an Austrian resident).
These documents must be submitted no longer than a month since the decision of incorporation.
In 2023, after registering with the Commercial Registry, the branch created in Austria must also apply for registration for VAT, even though the tax authorities were already announced regarding the new incorporation.
Our company registration advisors in Austria can help with the preparation of the documents needed to submit with the Companies Register.
We remind interested foreign companies that the main taxes for companies applicable in 2023 (which also apply to branches) are the following:
- 25%: the corporate income tax rate which is also the branch tax rate;
- 25% withholding tax on dividends (unless the company receiving the dividend payment holds at least 10% of the shares of the company distributing the dividends); a different rate applies to dividend payments to resident individuals;
- 20% value-added tax; reduced rates of 10% and 13% also apply, and some types of goods and services are subject to 0% (such as exports);
- social security contributions, given the fact that the branch will have employees in Austria; these can vary, however, the employer’s contribution can amount to 21.13% of the salary paid to the employee.
Other procedures when opening an Austrian branch in 2023
A bank account must be opened by the foreign company in the name of the branch. For this, the foreign company’s representative must come in person in Austria.
A few disadvantages occur though in the administration of a branch in Austria. The parent company is totally responsible for the branch’s acts and the representative of the branch may be liable for the tax debts.
A branch opened in Austria must also have a resident representative to deal with the local tax authorities and must carry the same name as the parent company (but with the termination “Zweigniederlassung”).
Even though it is not considered a legal entity, the same taxes must be paid, and annual accounts must be filed every year. Also, VAT returns must be submitted every month or quarterly. The financial statements of the foreign company must be submitted to the Companies Register. Annual audits are necessary for this type of business.
Branch tax compliance is easier with the help of our Austrian accountants. We provide foreign investors with complete assistance for tax compliance in case of branches, as these business forms are taxed in much the same way as Austrian corporations. We can also guide branch managers on the conditions applicable to keeping the books and records outside of Austria.
The parent company is often preferred by the clients or banks instead of the branches, because of the higher degree of safety.
For more information about opening a branch, you may contact our specialists in company formation in Austria.