Notes when setting up a company in Austria

Austria, the heart of Europe, is not only famous for its stunning scenery and rich cultural heritage, but it is also an attractive destination for international investors. Setting up a company in Austria offers many strategic advantages, including economic and political stability, a central geographical location that connects major markets, a highly skilled workforce, and a friendly business environment. However, to ensure a successful business establishment and operation, investors need to pay attention to a number of important factors. Viet An Law would like to provide information to customers through the article below.

Notes on charter capital when setting up a company in Austria

For Limited Liability Company (Gesellschaft mit beschränkter Haftung – GmbH)

• Minimum charter capital: According to current regulations, the minimum charter capital to establish a GmbH in Austria is €35,000.
• Cash contribution requirement: Of this total charter capital, Austrian law requires a certain part to be contributed in cash at the time of incorporation. Specifically, the minimum cash contribution amount is €17,500. The remaining capital can be contributed as non-cash assets, such as fixed assets, intellectual property, or other valued contributions.

For Joint Stock Company (Aktiengesellschaft – AG)

• Minimum charter capital: For larger and more complex companies such as AGs, the minimum charter capital requirement is significantly higher, currently € 70,000.
• Note: This higher charter capital reflects the nature of AGs as businesses are typically larger in size, capable of raising capital from the public and have more complex operations.

The minimum charter capital requirement when establishing a company, whether a GmbH or AG in Austria, is not only a mere legal regulation, but also an essential measure set out for many important reasons, in order to ensure the stability and transparency of the business environment.

First of all, this capital level acts as an initial financial “buffer”, protecting the interests of business partners and creditors. It ensures that the company has a certain financial resource to launch operations and is capable of meeting its basic financial obligations. This helps minimize risks for third parties when engaging in transactions with businesses.

Secondly, the fact that the founders have to contribute a certain amount of capital shows their seriousness and commitment to the business project. It is an indication that they have invested their personal finances in the company, thereby creating responsibility and motivation for the business to operate effectively. At the same time, this also helps prevent the formation of “ghost” companies that only exist on paper without real financial capacity.

Third, the minimum charter capital helps ensure the initial sustainability of the business, providing resources to cover startup costs and supporting operations in the early stages before the company achieves stable revenue.

In addition, meeting the requirements for charter capital also contributes to building trust and prestige for businesses in the eyes of partners, customers and financial institutions, demonstrating a certain level of initial financial capacity.

Finally, the minimum charter capital varies between types of companies (e.g., GmbH and AG) often reflects their level of responsibility and expected size of operations, which is consistent with the nature and growth potential of each type of business.

Notes on applying for an investment license when setting up a company in Austria

One of the points that investors should pay special attention to is that there is no need to apply for an investment license applicable to all foreign investment activities. Unlike some other legal systems, where investors may have to go through a separate licensing process to be allowed to make investments in that country, Austria focuses primarily on complying with the legal regulations on business formation and licensing requirements specific to the business sector. This This means that instead of applying for an “investment license”, investors need to focus on the following legal and administrative aspects:

• Business registration procedures: This includes the implementation of the necessary procedures for registering a business at the Austrian corporate regulatory authorities, e.g. registration in the Commercial Court (Handelsgericht) for most types of businesses.
• Requirements for licensing business activities: Depending on the business field in which the business intends to operate, there may be specific requirements for operating licenses in fields such as finance (banking, insurance), medical and healthcare, some technical activities, etc construction, transportation, and special trade.
• Visas and residence permits (for investors who are not EU/EEA citizens): If you are a citizen outside the European Union (EU) or the European Economic Area (EEA), you will need to apply for visas suitable for business purposes and residence permits in order to be able to legalize your stay and business in Austria.