ENCYCLOPEDIA
Austria is becoming an increasingly attractive option for setting up a company in Europe. Lower share capital than in many other European countries, the ability to incorporate with just one person, a fast registration process, and a 23% corporate income tax rate make this gateway to Central and Eastern Europe a practical springboard for Chinese companies entering the European market. This article focuses on the practical details of Austrian company registration, from choosing the right company type to ongoing compliance, and provides an actionable registration guide.
EU membership and gateway to Central and Eastern Europe: Austria is an EU member, a eurozone country and a Schengen member. It provides direct access to the EU single market of 450 million people and borders Germany, Switzerland, Italy and Central and Eastern European countries.
Business-friendly environment: Austria has political stability, a sound rule of law and a high level of public safety. Vienna has repeatedly been ranked as one of the world’s most livable cities.
Open foreign investment access and low entry barriers: A GmbH requires EUR 10,000 in share capital (EUR 5,000 paid in). It can be established by one person, allows 100% foreign ownership, and most sectors have no shareholding restrictions (certain sensitive sectors require approval).
Favorable tax rates compared with major Western European economies: Corporate income tax is 23%, lower than Germany’s approximately 30% and France’s approximately 26%. The standard VAT rate is 20%, with reduced rates of 10% or 13% applicable to certain sectors.
Highly qualified workforce: Austria has a highly educated, multilingual workforce with strong German and English proficiency and high labor productivity.
Austrian company law provides for various company forms. The most commonly chosen form among foreign investors is the limited liability company (GmbH). The following are the most common types:
The GmbH is the most popular company form in Austria, especially suitable for SMEs and international investors.
Its core advantages are that shareholders are liable for company debts only up to their capital contributions, so personal assets are separated from company risks. It has independent legal personality and can independently hold assets, sign contracts and conduct business. Since January 1, 2024, the minimum share capital of a GmbH has been reduced from EUR 35,000 to EUR 10,000, and at least EUR 5,000 must be paid in cash at the time of registration. A minimum of one shareholder is required. Neither shareholders nor directors are subject to nationality or residency restrictions, and foreign investors may hold 100% of the shares. The company name must end with “GmbH.”
A new company form introduced in 2024, designed specifically for start-ups and venture capital-backed companies. It is similar to a GmbH but allows the issuance of employee equity and is better suited to companies with multiple financing rounds. If you are setting up an operating business with a conventional ownership structure, a GmbH remains the default choice. If you are a start-up planning employee share ownership and financing rounds, you may consult an advisor on whether to choose a FlexCo.
Suitable for large companies or companies planning to list. The minimum share capital is EUR 70,000, and a supervisory board with at least three members must be established. For the vast majority of Chinese companies expanding overseas, a GmbH is sufficient to meet European business operation needs.
An extension of a foreign parent company established in Austria. It does not have independent legal personality, and the parent company bears full legal liability. The establishment process is simpler than that of a subsidiary and is suitable for companies exploring the market in the initial stage.
Practical recommendation: For the vast majority of Chinese companies expanding overseas, a GmbH is the optimal choice. Its advantages include limited liability, a low share capital threshold (EUR 10,000), the ability to be established by one person, and no mandatory local director requirement (but please note the special reminder below regarding “directors and trade-law managing directors”).
The name must be checked in the Austrian Commercial Register (Firmenbuch) system to ensure it has not been registered and is sufficiently distinguishable from existing companies. The company name must end with “GmbH.”
At least one shareholder is required, which may be a natural person or a corporate entity. There are no nationality or residency restrictions on shareholders, and 100% foreign ownership is permitted. A single shareholder may also establish a GmbH.
At least one managing director is required. The managing director must be a natural person and is not subject to nationality restrictions or Austrian residency requirements, but must have full legal capacity and no record of bankruptcy or major economic crime. If the managing director is a third-country national, in some cases an Austrian local authorized representative (Prokurist) may need to be appointed to handle legal matters.
If the company actually carries out commercial activities governed by the Trade Act (Gewerbeordnung), a “trade-law managing director” (gewerberechtlicher Geschäftsführer) must be appointed. This person must be a resident of Austria, the EEA or Switzerland, or hold an Austrian residence permit. For regulated industries, relevant qualification proof must be provided, and this person must be a director or an employee working at least part-time with full social security contributions.
The minimum share capital is EUR 10,000. The law requires that at least one quarter of the cash contribution be paid before filing for registration, and the total paid-in amount must be no less than EUR 5,000. After payment, a bank confirmation must be obtained. The share capital remains in the company as company assets for investment or daily operations and is not a formation expense.
A valid registered address in Austria must be provided. This address is the company’s legal domicile and must be stated in the Commercial Register.
The articles of association must be executed in the form of a notarial deed (Notariatsakt) and include core contents such as the company name, registered address, business scope, share capital and each shareholder’s subscribed amount.
The required documents vary depending on the type of shareholder. All non-German documents must be translated into German and undergo apostille or consular legalization.
Clear color scan of a valid passport;
Proof of address issued within the past three months (such as a bank statement or utility bill), showing the shareholder’s name and address;
CV (may be required by some notaries);
If the shareholder is not resident in Austria and holds more than 50% of the shares, a criminal record certificate from the country of residence for the past five years is also required. It must be translated into German by a court-sworn translator and issued no more than three months before submission;
Power of Attorney (POA).
Clear scans of the parent company’s business license and articles of association;
Passport and proof of address of the parent company’s legal representative;
Complete equity structure chart, with look-through to the ultimate beneficial owner;
Clear color scans of the ID card and passport of the ultimate beneficial owner, plus proof of address (a utility or bank statement showing the address issued within the past three months, with English translation), and evidence of source of income (bank deposit certificate with English translation);
Resolution of the parent company’s shareholders’ meeting or board of directors regarding the establishment of an Austrian subsidiary;
Apostilled Power of Attorney (POA) authorizing an Austrian notary or agent to handle registration matters;
Extract from the parent company’s commercial register (if applicable).
Notarized articles of association or declaration of incorporation (drafted by an Austrian notary);
Resolution appointing the managing director(s) by the shareholders (if not included in the articles of association);
List of directors and specimen signatures;
Bank confirmation of capital payment (Bankbestätigung);
Proof of a valid registered address in Austria;
Completed commercial register application form.
Check the company name in the Commercial Register to confirm that it does not infringe rights and ends with “GmbH.” Clarify the business scope and determine whether it falls within a regulated industry. Complete the information collection form and provide the required documents.
Draft the articles of association, power of attorney and other documents. Arrange apostille for the power of attorney, and arrange local notarization in Austria after confirming the content of the articles of association. Original apostilled documents must be sent to Austria.
Open a bank account, pay in at least EUR 5,000 and obtain a bank confirmation. Non-EEA founders are advised to communicate with the bank in advance.
The notary submits the notarial documents and registration application to the court via ERV. The company acquires legal personality from the date of registration.
After incorporation, complete business registration (a trade-law managing director must be appointed); complete tax registration within one month and obtain a tax number and VAT number; complete UBO filing within four weeks after entry in the Commercial Register.
Registration timeline: Approximately one to two months in total, excluding document courier and notarization/legalization time. The time required for the above process is based on experience and is for reference only; actual timing depends on the specific circumstances.
Annual financial statements: Prepare within five months after the end of the fiscal year and submit to the Commercial Register court within nine months.
Corporate income tax return: Without a tax advisor, file by June 30 of the following year; with a tax advisor, the deadline may be extended to March 31 of the second year.
Minimum corporate tax: EUR 500 per year for a GmbH. It is payable even in loss-making years and can be credited indefinitely against future years’ tax liability.
VAT returns: Submit preliminary returns monthly or quarterly.
Audit requirements: Small GmbHs (total assets of EUR 6.25 million, revenue of EUR 12.5 million, and no more than 50 employees; meeting two of the three criteria) may be exempt from audit. Medium-sized and large companies must be audited.
Ultimate beneficial owner registration: File UBO within four weeks after the company is entered in the Commercial Register, review annually, and late filing is subject to penalties.
Austria has a moderate company registration threshold and a low corporate income tax rate. As an EU member state, it provides free access to the European single market. For companies that want to establish a presence in Europe without bearing excessively high costs, it is a good choice. Registration is only the starting point. Ongoing compliant operations and capital planning should also be considered in advance. Consulting a professional firm before launching the project is recommended.
If you are planning an investment in Austria, you are welcome to contact Chuyuan (Chyield).
WeChat: chyieldconsulting
Website: www.chyield.com
