Expats can set up a business in Austria, provided they are citizens of the EU, the EEA, Switzerland, or if they hold an Austrian residence permit. In any case, you need to apply for a trade licence. This can be done at the local authority (municipal or district council, Magistrat or Bezirkshauptmannschaft).
You can set up a number of different types of legal business in Austria, according to your financial capacities. You can choose between corporations, for which you need a minimum starting capital. Or, you can go for a non-corporate form of business and invest whatever amount you can afford.
Below you can find a more detailed account of the relevant business types that exist in Austria.
Limited liability society
The Austrian limited liability society (Gesellschaft mit beschränkter Haftung - GmbH) is the most common form of both corporation and private business. As the name indicates, this business entity limits its owner’s/founder’s liability, namely to the starting capital of € 35,000. When setting up a business, which can be done by one person or several partners, a contract has to be drawn up, stating the responsibilities and rights of the owner or partners, including information about financial and economic assets. Apart from registration in the Austrian Commercial Register (Firmenbuch), the firm also has to be registered with the municipal or district council authority to apply for a trade licence. It is advised that taxes and accounting, especially if you want to hire staff, are done by a professional accountant.
Joint-stock company
The Aktiengesellschaft (AG) is the second most common type of corporation. It is not very different from the GmbH, its main distinction being that the starting capital has to be € 70,000. The advantage of this form of business is that the starting capital can be divided up into shares that are sold to shareholders. However, these shareholders are also entitled to dividends, i.e. they get the part of the profits corresponding to their shares.
General partnership
The general partnership (Offene Gesellschaft - OG) is one of the non-corporate forms of business in Austria. The only formal requirements for setting up an OG is a trading licence and registration in the Austrian Commercial Register (Firmenbuch). OGs differ from corporate business in that there is no certain amount of required starting capital. Moreover, all partners assume both directorship and liability. They can either be people or legal entities and bear solidarity, that is, equal liability with their money and property. The partnership contract can be both oral or written, whilst the latter is recommended.
Limited partnership
The limited partnership (Kommanditgesellschaft - KG) does not differ from the OG with respect to the formal requirements for setting up the business. What is different are the rights and duties of the partners. There have to be at least two partners, of which one is liable with a freely chosen amount of capital, the Kommanditist. The other partner, the Komplementär, assumes unlimited liability. The partner with unlimited liability is also the one with the right to directorship, the other associate is a silent partner.
Sole proprietorship
Sole proprietorship is the smallest and second most common form of business and a “minimum requirement” for self-employment. The legal entity, the Einzelunternehmen, is represented by one person, the sole proprietor. The advantage of sole proprietorship is that the owner can decide freely how much money they want (or can afford) to invest. Accounting is simple and, depending on turnover, taxes are moderate. The downside of it is that the private trader is the only person financially liable and legally responsible, with all their money and property.
In order to become sole proprietor, you have to apply for a trade licence. This has to be done at the municipal or the district council authority. Sole proprietors have to insure with the Austrian Social Insurance Authority for Business (Sozialversicherungsanstalt der Gewerblichen Wirtschaft - SVA). Insurance tends to be moderate at maximum.