If properly structured, an Austrian limited liability company (GmbH) allows international entrepreneurs to legitimately receive low-taxed dividends from global subsidiaries. The following information will help you determine whether forming a company in Austria is the optimum corporate structure with which to fulfil your international business objectives.
Advantages of company formation in Austria
An Austrian company is legally exempt from dividends tax received from a foreign subsidiary. Austria levies no withholding tax on dividends paid to the foreign parent.
As a member of the European Union (EU), Austria is governed by the provisions of the EU's Parent-Subsidiary directive. Thus, an Austrian holding company which holds at least 25% of the shares of an EU subsidiary can receive dividends from the subsidiary free of withholding tax.
An Austrian company can access a large network of double taxation treaties which Austria has signed with major trading nations around the world.
A minimum of one shareholder and one director is required to form a company in Austria. The shareholder and director can be the same person, and does not need to be Austrian resident. Corporate shareholders are allowed to form a company in Austria.
Austrian company formation is trustworthy. Austria was positively ranked as the 16th least corrupt country in the 2011 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians. Furthermore, Austria is positively ranked as the world's 22nd freest economy in the Heritage Organisation's 2010 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labour markets. Additionally, Austria is ranked 19th in the World Economic Forum's Global Competitiveness Report 2011-2012.
It is easy to open global corporate bank accounts to support an Austrian company formation. Our company works with internationally recognised banks, such as HSBC, Standard Chartered and Citibank, to provide corporate bank account services.
In its 2011 World Competitiveness Yearbook, the Switzerland-based IMD positively ranked Austria as the world's 18th most competitive economy. The ranking takes into account factors including economic performance, government efficiency, business efficiency and infrastructure.
In the 2010 Quality of Living Survey by Mercer Human Resources, Vienna was ranked as the best city in the world in which to live. Vienna ranks 8th in the Monocle Quality of Life Index. The index bases its ranking on factors like quality of housing and urban scale as well as amount of crime and the quality of education and healthcare.
Disadvantages of company formation in Austria
A GmbH pays corporate profits tax of 25% on all income. In addition, financial statements must be submitted annually to the Austrian Chamber of Commerce. Our company will assist clients to complete this statutory obligation efficiently and effectively.
Austrian company formation requires a minimum share capital of 35,000 EUR, of which at least half (17,500 EUR) must be paid in. A register containing information about shareholders and directors is available for public viewing.
Company formation in Austria is a relatively time consuming process. According to the World Bank's Doing Business 2011 Survey, Austria is the world's 32nd easiest place to do business. The survey measures factors including business start-up procedures, time, cost and minimum capital required to start a business.
Forbes' Tax Misery Index 2009 rated Austria as having the 6th highest tax misery in the world. The index takes into account corporate income, employer social security, personal income, employee social security, wealth tax and VAT/sales. Forbes suggests the index can be used to evaluate whether a country's policy attracts or repels capital and talent.