Austria offers four common structures for running a business: the GmbH, the Aktiengesellschaft (AG), the newer Flexible Kapitalgesellschaft (FlexCo), and the unincorporated Einzelunternehmen. Each sets a different bar for capital, liability, and administrative weight, and the right one depends on what the business needs to do — raise outside capital, grant employees a stake, limit personal liability — not on which name sounds most established. The FlexCo, in force only since 1 January 2024, is the newest of the four and the least understood outside Austria.
GmbH, AG, FlexCo and Einzelunternehmen Compared
The table below sets out the GmbH, the AG, the FlexCo, and the Einzelunternehmen side by side on the dimensions that actually drive the choice. Figures for capital and minimum tax are current as of July 2026; formation cost is described qualitatively rather than as a fixed figure, because notarial and court fees are tariff-based rather than flat.
| Dimension | GmbH | AG | FlexCo | Einzelunternehmen |
|---|---|---|---|---|
| Minimum capital | EUR 10,000 (EUR 5,000 cash) | EUR 70,000 (EUR 17,500 cash) | EUR 10,000 (EUR 5,000 cash) | None — no share capital concept |
| Liability | Limited to company assets | Limited to company assets | Limited to company assets | Unlimited — owner and business are one legal person |
| Formation cost | Firmenbuch fee ≈ EUR 450; notary fee scaled to capital | Scales with the higher capital base — typically the highest of the three | Comparable to the GmbH; confirm with the acting notary | Lowest — no notarial deed and, for most sole traders, no Firmenbuch entry |
| Minimum corporate tax | EUR 500/year | EUR 3,500/year | EUR 500/year | None — taxed as personal income (0–55%) |
| Share transfer | Notarial deed required for each transfer | Freely transferable; no notarial deed per transfer | Notarial deed for voting shares; enterprise-value shares can be structured more flexibly | Not applicable — a business sale, not a share transfer |
| Employee participation | Possible via standard shares; each transfer needs a notarial deed | Straightforward via freely transferable shares or options | Purpose-built: non-voting enterprise-value shares, up to 24.99% of capital | Not applicable |
| Who it suits | Most trading companies, holding structures, single-founder businesses | Businesses planning public capital raising or a large, changing shareholder base | Startups planning to grant equity-like stakes to employees or early investors | Freelancers and low-risk single-person service businesses |
GmbH — The Standard Choice
The GmbH (Gesellschaft mit beschränkter Haftung) is Austria's default structure for a trading company, and the one this site covers in full on our company formation page, including package pricing. Minimum capital is EUR 10,000, of which EUR 5,000 must be paid in cash before registration; liability is limited to the company's own assets, not the shareholders' personal assets. A single person can be both sole shareholder and sole director.
It suits most people reading this page: a trading business, a holding company for foreign subsidiaries, or a single-founder operation that needs a separate legal entity and does not need to grant employees an equity stake. It is less well suited to a business that plans, from the outset, to bring in outside investors through staged share issuances or to run an employee-participation scheme — the notarial-deed requirement on every share transfer makes both slower than they are under an AG or a FlexCo.
AG — The Public-Facing Structure
The Aktiengesellschaft (AG) is Austria's public-company structure, and the more expensive one to set up: minimum capital is EUR 70,000, with at least a quarter — EUR 17,500 — paid in cash immediately at founding, against the GmbH's EUR 10,000 and EUR 5,000, per the Chamber of Commerce's AG formation checklist. That capital requirement has not changed in the recent company-law reforms; it is set independently of the GmbH and FlexCo capital reduction.
The AG's structural advantage is share transferability: shares are freely transferable instruments rather than interests requiring a notarial deed to move, which is what makes an AG the natural choice for a business planning to raise capital from a changing group of investors, list eventually, or run a large-scale option scheme. For a single-founder business with no such plan, the higher capital bar buys structural flexibility that is unlikely to be used.
The difference that decides the choice more often, though, is control, and it is not a matter of capital at all. Section 20(1) GmbHG obliges a GmbH's managing directors to observe restrictions imposed by the articles, by shareholder resolution or by the supervisory board — the owners direct the business. Section 70(1) AktG says the AG's management board runs the company under its own responsibility, having regard to the interests of shareholders, employees and the public interest. Shareholders in an AG elect the supervisory board; they do not instruct the board on how to trade. An owner who wants to keep running their own company should not be sold an AG, whatever the capital position.
The AG also carries a supervisory board as standard rather than by threshold: § 86(1) AktG sets it at three natural persons, with the articles free to go up to 20. A GmbH needs one only where § 29(1) bites — capital over EUR 70,000 and more than 50 shareholders, or more than 300 employees on average, or heading a qualifying group. Three more people to find, convene, minute and usually pay is a recurring cost the capital comparison never shows.
FlexCo — Built for Startups
The Flexible Kapitalgesellschaft (FlexCo or FlexKapG) has existed only since 1 January 2024, introduced specifically for startups and founders whose needs did not fit neatly into either the GmbH or the AG, per the Chamber of Commerce's FlexKapG overview. Capital requirements are identical to the GmbH — EUR 10,000 minimum, EUR 5,000 in cash — but the share structure is not.
A FlexCo can issue two kinds of stake: ordinary voting Geschäftsanteile, structured much like GmbH shares, and non-voting Unternehmenswert-Anteile — enterprise-value shares — designed for employee and early-investor participation without diluting control. Enterprise-value shares are capped at 24.99% of total share capital, so founders keep voting control even after issuing them broadly. This is the specific gap the FlexCo closes: a GmbH can grant employees economic upside only awkwardly, and an AG's freely transferable shares bring administrative weight most early-stage companies do not need yet.
It suits a startup that knows, at formation, that it will want to grant stakes to early employees or investors without building a full option scheme on top of a GmbH. It is not a shortcut on capital or formation cost — those match the GmbH almost exactly — so choosing it purely to save money over an AG, without needing the enterprise-value-share mechanism, does not gain much.
Einzelunternehmen — Sole Proprietorship
The Einzelunternehmen — sole proprietorship — is not a company at all in the GmbH, AG, or FlexCo sense: there is no separate legal entity, no share capital, and, for most sole traders, no Firmenbuch entry. The owner and the business are the same legal person, which is both the appeal and the risk.
The appeal is speed and low overhead: formation is a trade notification and a tax registration, not a notarial deed and a court filing, and there is no minimum capital to raise. Profits are taxed once, as the owner's personal income under the ordinary progressive Einkommensteuer scale, rather than at a flat corporate rate with a separate minimum tax charged regardless of profit.
The risk is liability: because the business has no separate legal personality, the owner's personal assets are exposed to the business's debts and obligations without the ceiling a GmbH, AG, or FlexCo provides. It suits a freelancer or a single-person service business testing a concept, particularly one with low contractual and liability exposure. It stops suiting anyone the moment the business takes on meaningful financial risk, a partner, or outside capital.
Which One Is Wrong for You
Choosing between the GmbH, the AG, the FlexCo, and the Einzelunternehmen is easier as a process of elimination than as a search for the single right answer. The faster question is which ones are wrong for a given business, because that shortens the list quickly.
- The Einzelunternehmen is wrong for you if the business carries real liability exposure — contracts with meaningful penalty clauses, physical products, employees, or anything where a claim against the business could reach your personal assets. The absence of a capital requirement is not a saving if it is bought with unlimited personal liability.
- The AG is wrong for you if there is no concrete plan to raise capital from a changing group of investors or to list. The EUR 70,000 capital bar and the heavier governance expectations that come with a public-company structure buy flexibility that an early-stage or single-founder business is unlikely to use.
- The FlexCo is wrong for you if you have no intention of granting anyone else an equity-like stake. It matches the GmbH on cost and capital, so choosing it for any other reason gains you the enterprise-value-share mechanism and nothing else — no cost advantage, no simpler formation.
- The GmbH is wrong for you only in the specific case where you already know, at formation, that you will want to grant staff or early backers a stake without a full share transfer each time. That is the one gap the FlexCo was built to close.
For most single-founder trading businesses and holding structures, that process of elimination leaves the GmbH, which is why it is the structure this site covers in full detail on the company formation page. If the constraint is formation time rather than structure, a ready-made shelf company sidesteps the registration timeline entirely, whatever structure you eventually want to grow into.
Frequently Asked Questions
What is the minimum capital for a FlexCo compared with a GmbH?
The same: EUR 10,000 minimum, of which EUR 5,000 must be paid in cash. The FlexCo does not offer a lower capital bar than the GmbH — its distinguishing feature is the enterprise-value share, not a cheaper formation.
Can a FlexCo really give employees equity without founders losing control?
Yes, within a cap. Non-voting Unternehmenswert-Anteile (enterprise-value shares) can be issued for employee or early-investor participation, but they may not exceed 24.99% of total share capital, so voting control cannot be diluted below majority through this mechanism alone.
Is an Einzelunternehmen cheaper than a GmbH to set up?
In cash terms, yes — there is no minimum capital to raise and no notarial deed. The trade-off is liability: an Einzelunternehmen has no separate legal personality, so the owner's personal assets stand behind the business's debts, which a GmbH's limited liability does not expose.
Do I need EUR 70,000 to form any Austrian company?
No — that figure applies only to the AG. The GmbH and the FlexCo both require EUR 10,000 minimum capital, with EUR 5,000 in cash. EUR 70,000, of which EUR 17,500 in cash, is specific to the Aktiengesellschaft.
What is the difference between an AG and a GmbH?
Who is in charge. Section 20(1) GmbHG binds a GmbH's managing directors to restrictions set by the articles, by shareholder resolution or by the supervisory board, so the owners direct the business. Section 70(1) AktG has an AG's management board run the company under its own responsibility, weighing the interests of shareholders, employees and the public. Capital differs too — EUR 70,000 against EUR 10,000, and minimum corporate tax of EUR 3,500 a year against EUR 500 — but the control provision is what makes the two forms genuinely different animals.
Is a GmbH the same as a Ltd or an LLC?
No. All three limit what the owners can lose, and there the equivalence ends. An Austrian GmbH needs EUR 10,000 of share capital with at least EUR 5,000 of cash contributions paid in before registration, is formed by notarial deed, must have a natural person as managing director, and files public annual accounts every year whether or not it trades. A UK Ltd and a US LLC have no statutory minimum capital and no notarial formation, and an LLC is by default not a separate taxpayer at all — which is a difference of design, not of rate.
What are the disadvantages of a GmbH?
Four, and they are worth naming before formation rather than after. Capital has to exist in cash before the court will register the company. Every share transfer between living persons needs a notarial deed under section 76(2) GmbHG, and so does any agreement to transfer in future — options and pre-emption promises included. Annual accounts go on a public file that anyone may inspect, from the first year, trading or not. And there is a minimum corporate income tax of EUR 500 a year regardless of profit.
Can a GmbH's managing director be another company?
No. Section 15(1) GmbHG allows only natural persons with legal capacity to be appointed managing director, by resolution of the shareholders. The corporate-director arrangement available in some common-law jurisdictions has no Austrian equivalent, so a holding company cannot be registered as the manager of its Austrian subsidiary — an individual has to take the role and the liability that comes with it.