ENCYCLOPEDIA
When people think of Austria, they first think of Vienna, the capital of music, and the lakes and mountains of the Alps. But this EU member state is also an industrial powerhouse and R&D hub, and it is becoming a strategic springboard for Chinese enterprises entering Europe’s high-end market. This article focuses on foreign investment market access, security review, foreign exchange, employment and tax, providing practical reference for companies going global.
Austria is generally open to foreign investment. Foreign investors enjoy national treatment, there is no cap on shareholding, and there is no sector prohibition list specifically targeting foreign investment. Foreign investors may hold 100% equity, and shareholders are not subject to residency requirements. Foreign natural persons may establish a company themselves or invest through a company in their home country. However, environmental protection, product safety and public health requirements are relatively strict. Banking, insurance and securities, energy, telecommunications and broadcasting, military goods, security services, gambling, aviation and freight forwarding are regulated sectors and require separate special permits.
Fields involving public interest and national security are managed through sector licenses and special reviews. In finance, for example, banking, investment, insurance, e-money, payment, asset management and investment advisory services all require approval from the Financial Market Authority (FMA) and the Austrian National Bank (OeNB). Before a license is issued, a company’s management body must be established, with specific requirements on the number of managers and their professional suitability. In practice, at least one member of management should be able to communicate with regulators in German.
Austria does not have a dedicated foreign investment authority; the central bank is responsible for foreign investment statistics. The Austrian Business Agency (ABA) is the official investment promotion agency and provides free consulting services. In 2025, ABA provided 26,736 consultations and supported 283 settlement and expansion projects, with total investment of approximately EUR 900 million. The federal states also have investment promotion agencies, such as the Vienna Business Agency.
The Austrian government strongly supports R&D and innovation. FFG provides funding support for corporate R&D, technology development and innovation activities, and assists participation in EU projects. The Climate and Energy Fund supports R&D in the environment and energy fields. Start-ups can access seed funding, and cash grants for R&D projects of mature companies can reach up to 80%. The Industrial Strategy 2035, released in early 2026, identifies nine key technology areas: AI and data, chips and electronic components, advanced manufacturing and robotics, quantum and photonics, advanced materials, life sciences and biotechnology, energy and environment, mobility technologies, and aerospace. It plans to provide EUR 2.6 billion in R&D funding by 2029.
Austria’s foreign investment security review mainly targets M&A transactions. Greenfield investment and joint ventures are outside the scope of review, so establishing a new company or building a plant does not require this procedure.
If the transaction involves acquiring an existing Austrian company, the notification thresholds under the Investment Control Act should be noted:
In particularly sensitive sectors (defense, critical energy and digital infrastructure, etc.), acquiring 10% of voting rights triggers notification; in other sensitive sectors (key technologies, critical resources, etc.), acquiring 25% triggers notification. Acquiring control or acquiring core assets requires notification regardless of shareholding percentage. The competent authority is the Federal Ministry of Labour and Economy. For specific procedures, consulting a professional firm is recommended.
Austria is a eurozone country and applies the EU’s common foreign exchange policy. Foreign exchange is freely convertible, and inbound and outbound remittances are in principle unrestricted. Foreign-invested enterprises can open euro or other major currency accounts locally, and foreign employees may remit their lawful after-tax income in full.
After completing the annual financial statements and paying corporate income tax, an enterprise may remit profits as dividends in accordance with a resolution of the shareholders’ meeting or board of directors. The current mainstream dividend withholding tax rate is 27.5%. Under the China-Austria tax treaty, the rate may be substantially reduced: if the beneficial owner directly holds ≥25% of voting rights, or is the other government, central bank or a wholly government-owned entity, the rate shall not exceed 5%; in other cases, it shall not exceed 10%. Enterprises may apply for treaty benefits before payment, or submit tax residency certificates and beneficial owner documentation afterward to apply for a refund. At the same time, they may apply in China for credit for foreign taxes paid. The treaty rate for interest and royalties is generally 10%.
Capital changes such as capital increase, equity transfer, capital reduction and liquidation are not subject to foreign exchange controls and have no amount limits. Enterprises may borrow from overseas financial institutions or related parties, with currency, term and repayment arrangements agreed by the parties. Banks mainly focus on transaction authenticity, contract terms and AML compliance.
Carrying EUR 10,000 or more in cash when entering or leaving Austria must be declared. Customs has the right to monitor and confiscate undeclared cash. In recent years, AML enforcement has intensified, and in many cases proof of the purpose and lawful source of funds must be submitted.
Employment contracts may be concluded in writing or orally and are formed upon mutual agreement. The standard full-time working time is 40 hours per week, and many sectors have reduced it to 38.5 hours. Overtime is generally paid at 50% or compensated with time off; work on statutory holidays is paid at 100%; night work and Sunday work are determined by the Working Time Act and collective agreements. From 2026, overtime allowances of up to 15 hours per month (capped at EUR 170) are tax-exempt.
Austria has no national minimum wage; wages are set by sectoral collective agreements, covering about 98% of employees. In 2026, entry-level monthly salaries in most sectors are approximately EUR 2,000 to 2,400 (gross), paid 14 times a year; in tourism and hospitality, cleaning and similar sectors, they are approximately EUR 1,750 to 1,950. Employer social security contributions are about 21%; including other costs, total employment cost is about 30%. The social security contribution ceiling is EUR 6,930 per month.
Non-EU citizens require an employment permit for long-term employment, and Austria operates a points-based Red-White-Red Card system. In 2025, shortage occupations include high-voltage electricians, nurses, doctors, senior data processing specialists and others. The revised protocol to the China-Austria tax treaty raises the threshold for a construction permanent establishment from 6 months to 12 months, applicable from January 1, 2025. Employees on assignment should also pay attention to the 183-day rule and individual income tax credits.
Since 2024, Austria’s corporate income tax rate has been reduced to 23%, applicable to all profits. Resident companies are taxed on worldwide income; non-residents are taxed only on Austrian-source income. Annual minimum corporate tax for resident companies: EUR 3,500 for stock corporations, and EUR 500 for limited liability companies and flexible capital companies (FlexKapG). The minimum tax can be credited indefinitely against future years’ tax liability.
Progressive tax rates apply. Annual income below EUR 13,539 is tax-free; the excess is taxed at progressive rates from 20% to 55%. The top marginal rate of 55% applies to annual income exceeding EUR 1 million and is valid until 2029.
The standard rate is 20%. 10% applies to food, rent, etc.; 13% applies to plants, cultural events, domestic flights, etc.; 19% applies only to the two special regions of Jungholz and Mittelberg. From 2025, the small business VAT exemption threshold increases from EUR 35,000 to EUR 55,000.
R&D expenditure qualifies for a 14% tax credit. Since 2023, investment in assets with a useful life of at least 4 years may qualify for an allowance that reduces taxable income. The allowance is 10% of acquisition or self-construction cost, and 15% for environmentally friendly assets. Conditions must be met; early transfer of assets requires an upward adjustment of income; R&D credit documentation must be kept for at least 7 years.
A tax group may be formed where the parent company holds more than 50%, allowing profits and losses within the group to be offset, with a minimum duration of 3 years. Since 2020, a 5% digital tax has been levied on internet companies with global annual sales exceeding EUR 750 million and Austrian sales exceeding EUR 25 million.
If an Austrian subsidiary within a group has annual revenue exceeding EUR 50 million in each of the preceding two years, it must prepare transfer pricing master file and local file.
Chinese companies’ investments in Austria cover finance, telecommunications, manufacturing, new energy and other fields.
Financial institutions: Bank of China Vienna Branch, Industrial and Commercial Bank of China Austria Limited and others have branches providing corporate banking services.
Telecommunications and technology: Huawei Technologies Austria, ZTE Austria GmbH and others have been established for many years. Huawei and Dronetech cooperate in smart agriculture using 5G, cloud, AI and IoT technologies; ZTE supports Drei in deploying its 5G network.
New energy vehicles and manufacturing: In September 2025, XPENG partnered with Magna to assemble the G6 and G9 in SKD form at the Graz plant, becoming the plant’s first Chinese OEM contract manufacturing customer. In November 2025, GAC and Magna announced local production of the AION V at the Graz plant. BYD and voestalpine signed a cooperation agreement in Vienna in June 2025, under which voestalpine will supply steel to BYD’s Hungarian plant.
New energy and energy storage: ZTT and KKI are jointly developing a 176 MW/432.5 MWh energy storage project in Austria. CRRC Zhuzhou Locomotive (Europe) has a branch office.
Chinese enterprise association: The Association of Chinese Enterprises in Austria was established in 2017, with its first chairman being the head of Bank of China Vienna Branch.
Austria is not only a country of music, but also an industrial powerhouse known for its hidden champions and R&D strength. Located in the heart of Europe, it is both a springboard into Central and Eastern European markets and a bridge connecting technology and capital between Eastern and Western Europe. For Chinese enterprises, strong compliance and deep local engagement are also a long-term path.
If you are planning an investment in Austria, you are welcome to contact Chuyuan (Chyield).
WeChat: chyieldconsulting
Website: www.chyield.com
