Q&A Austria

What are the advantages of the jurisdiction for Chinese investors?

Austria, a Member State of the European Union, offers perfect access to the European Market and gives direct access to all EU Directives. Austria has a tax treaty with China since 1992 and with Hong Kong since 2011. Holding shares in an Austrian company does not trigger CFC-legislation in China and Austrian based companies have access to currently 90 tax treaties Austria has signed with other countries and have access to 59 Investment Protection Treaties signed with other countries.

Furthermore, domestic Austrian tax legislation foresees significant tax exemptions for foreign source income and offers additional tax benefits.

What types of companies can be opened?

Company with limited liability (GmbH). Limited and unlimited partnerships can be established easily as well as Austrian Private Foundation.

What are the requirements for company formation?

Capital requirements

The Austrian GmbH Act foresees a statutory share capital of € 35.000, of which at least € 17.500 – has to be paid in. After the registration of the company the share capital can be used as working capital.

The Austrian Private Foundation Act foresees a minimum capital to be paid in amounting to € 70.000, again after the registration of the private foundation these funds can be used for making investments.

Partnerships do not have any capital requirements.

Structure of an Austrian company

Each GmbH must have at least one director and one shareholder. The Austrian private foundation is managed by a board of three members; an Austrian private foundation does not have any shareholders.

Annual meeting, auditing and reporting

Austrian companies are obliged to have books of accounts and have to file annual accounts and tax returns as well as report to the competent court of registration.

In case of a GmbH no compulsory audit is necessary, only if certain thresholds regarding the number of employees, the assets value and the turnover are exceeded. The Austrian private foundation is obliged to have an audit of its books annually.

What are the fees associated with the company incorporation?

The fees usually are in a range between €4.000 and €6.000, whereby this includes the cost for drafting the articles of association, the notarial deed, the bank compliance and obtaining a taxpayer’s identification number and a VAT identification number. Furthermore 1% capital transfer duty has to be paid for the effectively paid in share capital as well as court duties in a range between €400 and €600.

What is the general taxation rate for incorporated companies?

Austrian corporations have to pay a flat 25% corporate income tax on their worldwide income whereby material tax exemptions are granted for foreign source dividends and foreign source capital gains, even if there is no tax treaty existing with the other country.

Austrian companies can also obtain tax-free dividends and tax-free capital gains from off-shore companies under certain circumstances.

Can the regulatory authorities request information about the background and identify of the company officers, or company accounting information?

Yes, provided that this information is requested and required to assist investigations or prosecutions in case of serious crimes such as money laundering, terrorism or fraud. Such information can be shared with other jurisdictions provided that there was a criminal prosecution initialized by a regular court in the other country.

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