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Why Is Austria an Attractive Country for Investors?

Why Is Austria an Attractive Country for Investors?

Since 1995 when it joined the European Union, Austria has rapidly ascended as one of the most powerful economies in Europe and one of the most industrially developed countries in the world. Foreign companies with branch offices and subsidiaries in Austria have contributed to the expansion of the country’s economy indicating that foreign investors are very attracted by the business environment here. The high living standards, the infrastructure and the well-developed industry were the main incentives for foreign investors who came to Austria until now.

If you want to invest in Austria, you can obtain more information on the regulations of doing business here from our advisors.

If you want to open a company in Austria and need assistance with the company formation process, you can rely on our consultants. 

Foreign direct investments in Austria

Fitch, Moody’s and Standard and Poor’s, the three largest credit rating agencies in the world, have offered high ratings to Austria during the last few years which was a very strong reason for foreign investors to choose Austria as their business destination. Austria attracted foreign direct investments worth an average 5 billion euros in the last few years.

At the moment, Austria is one of the largest exporters in Europe and is one of the easiest countries to do business in, according to the World Bank, which are two other reasons that make this country very attractive to foreign investors who are mainly interested in industries like pharma and research and development. It is also known that the Government offers many tax breaks to Austrian companies in the research and development field.

Our company registration agents in Austria can offer information on the available tax incentives. If you are attracted by the opportunities offered here and want to invest in Austria, we invite you to get in touch with our company formation agents in order to start the procedure of registering a business.

Why do foreign investors come to Austria?

Austria is one of the most stable economies in the world and boasts one of the most skilled labor forces in Europe which are some of the most powerful arguments foreign investors rely on when choosing to open companies here. Also, Austria offers one of the most favorable set of foreign investment legislations in the world which is what makes and will make the country one of most attractive places to do business in. Among the industries bound to grow in the following years, analysts say that banking, transportation and agriculture are highly to render the best returns on investment.

What are the main laws governing foreign investments Austria?

First of all, Austria does not discriminate between local and foreign investors, which is why the Commercial Code provides the same requirements for both types of enterprisers seeking to open companies here. The most important Austrian laws governing foreign investments are:

  • –          the Civil Law;
  • –          the Limited Liability Company Law;
  • –          the Stock Exchange Law;
  • –          the Joint Stock Company Law;
  • –          the Employment Contract Adaptation Law;
  • –          the Reorganization Tax Law.

Austria also included most of the EU directives in its national laws. Among these, The Law on Societas Europea, the EU Merger Law and the EC Merger Regulation which provide for EU investors interested to expand their foreign companies in Austria without further requirements from the local authorities. Additionally, Austria has enabled several laws related to specific industries foreign investors are most interested in. Among these, the financial and the trading industries.

Given the welcoming legislation, those who plan to invest in Austria will also benefit from the support of various governmental agencies interested in attracting large numbers of overseas businesspersons willing to contribute to the economy.

What are the most important incentives for foreign investors in Austria?

Apart from the legislation related to foreign investments in Austria, the government also offers a wide range of incentives which are adapted every year to the investors’ needs. Among these are:

  • –          industry-targeted cash incentives;
  • –          subsidies;
  • –          tax rebates;
  • –          guarantees related to exports;
  • –          loans with preferential interests.

Apart from these, Austria ensures a strong protection of intellectual property rights which is very important for the research and development industry.

The Austrian Company Law encourages investments

The Company Act is the main law providing for the opening of companies in Austria. Foreign investors have the following advantages if they decide to set up businesses here:

  • –          the Austrian Company Act provides for a wide variety of entities which can be registered in Austria;
  • –          foreign investors can open all the types of companies prescribed by the Company Law;
  • –          foreign entrepreneurs will follow the same regulations as local ones when it comes to the requirements for creating businesses;
  • –          the requirements for opening a company in Austria are minimum, implying at least one shareholder and one director;
  • –          the company registration procedure can be completed remotely.

You can give power of attorney to our company registration consultants in Austria who will incorporate the company on your behalf.

The most prolific investment industries in Austria

Foreign investors wondering why they should open companies in Austria must know that in terms of investment industries this country is quite advanced. Among the most prolific industries they can establish companies in are:

  • –          information technology which encompasses subsectors like security and financial technology;
  • –          the financial sector which now includes cryptocurrencies and blockchain technology;
  • –          trading which is one of the largest contributors to the Austrian economy;
  • –          real estate, in which investors can set up construction companies and real estate agencies;
  • –          manufacturing which is the top economic sector in Austria.

Austria’s policy for foreign investments

Austria has a pro-foreign investment policy and direct investments do not require special approvals from the Government. This may be needed in some cases where real estate purchases are necessary and it applies especially to non-EEA investors. If this is the case, one of our attorneys in Austria can help answer your questions.

Three of Austria’s advantages for foreign investors include its central position in Europe, its political stability and its focus on R&D activities. The country also has a highly qualified workforce and a very well developed infrastructure. A large number of international companies have chosen Austria as their headquarter location. The quality of life and personal security are high in Austria.

Foreign companies in Austria are subject to the same rules and regulations as locally incorporate companies, including in obtaining special permits and licenses. A lawyer in Austria can help you with the special permits.

Advantages of those who want to invest in Austria

Apart from the legislation and industries in which foreign investors can set up businesses in Austria, the country’s strategic location in Europe and being a member state of the European Union (EU) are also good reasons to choose to set up new operations or to expand existing ones here.

Austria follows all EU regulations and mechanisms which enable them to focus on their business without having to comply with additional requirements. Of course, the local government also has specific laws and rules to abide by, however, these are harmonized with EU ones, so they are easier to follow.

Apart from these, Austria also follows other regulations such as those imposed by the Organization for Economic Cooperation and Development (OECD) and the World Trade Organization (WTO).

Other advantages of Austria’s economic environment are:

  1. a quick company registration procedure which resembles those of other European countries which favors investors from neighboring countries,
  2. the fair and equal treatment offered to foreign investors helps them have an increased confidence in the rules applied locally,
  3. the favorable taxation of individuals and companies (the corporate tax rate is 23%),
  4. the highly specialized workforce which also comprises many foreigners,
  5. the safe business environment and economic and fiscal stability,
  6. the fact that it has the 4th most important purchase power at the level of the EU.

As mentioned above, the country has strategic position bordering important European economies, and thus enabling direct access to regional markets is also a noteworthy reason to invest in Austria.

Expansion options for foreign investors and companies

Foreign investors who have companies in other countries, no matter if these are located in Europe or outside it, can expand them in Austria by creating branch offices or subsidiaries. These are generally the types of entities one can use in order to sell goods or provide services to one of the most important purchasing powers in the European Union.

While the branch can be entirely controlled by the parent company, the subsidiary can act independently and thus adjust to the exact requirements of the Austrian market. Moreover, these two entities can also enjoy the benefits offered by Austria’s double taxation conventions.

If you want to invest in Austria through one of these legal entities, our company registration officers are at your service in order to incorporate the selected form in the fastest manner possible.

Austria is a model of productivity

Choosing to invest in Austria will lead to high productivity thanks to the low labor costs and motivated employees. The Austrian labor market is made of highly skilled workers, many of them coming from other countries thanks to the high salaries which enables good relations between employers and employees.

The labor market is also helped by the local educational system that harmonizes theory with practice and thanks to which the workforce represents the mix any employer is looking for.

Austria can be seen as one of the most important business hubs that connects Western and Eastern Europe, considering that the country is also ranked 8th in Europe in terms of English proficiency, thus easing communication between the different nationalities that live here.

If the reasons above convinced you to invest and open a company in Austria, do not hesitate to ask for the services of our local officers.

Foreign direct investments (FDIs) in Austria in numbers

There are numerous reasons to choose to invest in Austria by starting a new business or expanding existing operations, and among these, FDI numbers speak on these matters:

  • – in 2019, Austria attracted FDI amounting up to 4.6 billion USD,
  • – the country’s FDI stock reached 205 billion USD the same year,
  • – Austria also raised from the 24th to the 21st position in Kearney’s Foreign Direct Investment Confidence Index in 2019,
  • – in terms of ease of doing business, Austria ranked 27th in the World Bank’s report for 2020.

For more information on why invest here, you can contact our Austrian company formation representatives.