Austria (limited liability company (GmbH)

Austria (limited liability company (GmbH)

To organise a company in Austria is quite simple, but there are important organisational issues that must be resolved at the time of company registration. It is also necessary to meet professional requirements to the companies existing in Austria ('Gewerberecht').

Austria is a country, which has free capital and income floating. Austria signed agreements for avoidance of double taxation with a number of states, in particular with all members of the European Union, the USA, Canada, Russia. There are not sectors that are closed for foreign investments, although in strategic sector Austrian companies are sometimes of priority. Income tax from a company is 25%.

In Austria there is a number of state benefits for business development, such as: tax incentives for investing (9% of all purchases of depreciable property of companies, and 6% of all software purchases are deducted from taxable income), investment incentives (recoverable project costs from 15% to 70 %); pre-market developments (bonuses from 25% to 50%), research subsidies (the budget for research is subject to deductions of 12% to 18%, if research would lead to an increase in export revenues), industrial research (incentive payments from 50% to 60% of the costs paid from the subsidies fund depending on the scope and size of an enterprise), etc.

The Most Popular Forms of Incorporation for Companies Established in Austria are:

• Unlimited Liability Partnership (OHG and OEG);
• Limited Liability Partnership (KG and KEG);
• Limited Liability Company (GmbH);
• Joint Stock Company (AG);
• Branch of a Foreign Company.

There is no fundamental difference between a limited partnership and unlimited partnership, except that:

Unlimited Liability Partnership (OHG and OEG) is supposed to have two or more equal partners (individuals and/or legal entities, residents and/or non-residents of Austria), who and which shall be unlimitedly liable for debts and obligations of the partnership in Austria;

Limited Liability Partnership (KG and KEG)  is supposed to have at least one general partner with unlimited liability and at least one partner with limited liability, who is limitedly liable for debts and obligations of the partnership in Austria within the amount specified between the partners. General partner, in turn, may be a limited liability company.

Limited Liability Company (GmbH) is characterised as follows:

• The total capital (at least 35,000 Euro) must be signed by shareholders, and a half of the capital must be paid at the time of registration by the cash contribution;
• If the other half of the capital is paid in the form of non-monetary assets, it will be necessary to assess such property by an independent expert in Austria;
• Articles of Association of the company is registered by a notary in Austria in the presence of founders or their agents;
• Shares can only be nominal;
• Shareholders are free in transferring their shares to third parties subject to the proper notarisation, but Articles of Association may provide for the provision on necessary availability of the relevant decision of the general meeting of shareholders.

Joint Stock Company (AG) is characterised as follows:

• The total capital (at least 70,000 Euro) must be signed by shareholders, and a half of the capital must be paid at the time of registration by the cash contribution;
• If the other half of the capital is paid in the form of non-monetary assets, it will be necessary to assess such property by an independent expert in Austria;
• Articles of Association of the company is registered by a notary in Austria in the presence of founders or their agents;
• Shares of the company can be issued in any form;
• Shareholders are free in transferring their shares to third parties without proper notarisation;
• Shareholders' liability is limited to their share in the charter capital of the company;
• No restrictions for a number of shareholders, who may be individuals and legal entities, residents and non-residents of Austria (at least 2 shareholders, but can be one if it is a holder of shares of other shareholders in trust);

Branch of a foreign company in Austria is an economically and territorial separate subdivision of a foreign entity in Austria. Branch is a legal entity independent of its parent company. Its activities, however, should be organise so to ensure further financial and administrative independent 'existence' in Austria. Branch is vested with the property of the legal entity that has created it and operates on the basis of the regulations approved by this legal entity.

Please note that this information may be changed from time to time and shall be re-checked by experts of the relevant jurisdiction. To obtain updated information and information on the cost of registration, please contact our representatives.