Austria is known for its stunning scenery, high quality of life and the presence of numerous international companies. Many expats are thinking about starting a business in Austria. This article provides an overview of the company registration process and answers some of the most common questions.
Which legal form should I choose?
Choosing the legal form of organisation is one of the first steps in setting up a business in Austria. There are different company forms in Austria, which entrepreneurs can choose depending on their needs and situation. Each company form has its own legal, financial and organisational characteristics. The most common are:
- Sole proprietorship (sole proprietorship): This is a simple form of company in which one person is fully responsible for all business operations. The owner has unlimited liability with all his personal property.
- Civil law partnership (GesbR): This is where two or more people come together to achieve a common goal. The liability is unlimited, and no minimum capital is required.
- General partnership (OG): This form of company is set up by two or more persons. The partners have unlimited liability and are personally liable for their private assets.
- Limited partnership (KG): It consists of at least one full partner and one or more limited partners (partial partners). While the full partner has unlimited liability, the liability of the limited partner is limited to his contribution.
- Limited liability company (GmbH): This is the most commonly chosen company form in Austria. Liability is limited to the assets of the company. A minimum capital of EUR 35,000 is required, of which at least half must be contributed in cash at the time of incorporation.
- Public limited company (AG): This is a company with authorised capital divided into shares. Liability is limited to the assets of the company. The minimum capital is 70,000 euros.
- Co-operative: an association of at least five persons pursuing a common economic objective. Liability may be regulated differently.
- European company (SE, Societas Europaea): a public limited liability company regulated at EU level that can be set up in any EU Member State.
- Non-operating partnership: A partner participates in the business of the other partner without any external manifestation.
Various factors such as liability, taxes, capital requirements and organisational structure should be taken into account when choosing the appropriate form of company. It is often advisable to seek the advice of an expert, such as a lawyer or tax advisor. Your decision should be based on factors such as the size of your business, the number of founders and your liability risk.
With or without VAT?
Whether you have to pay and remit Value Added Tax (VAT) depends on your annual turnover. Small businesses with a turnover of up to €35,000 per year are exempt from paying VAT. If you exceed this limit, you must register, collect and pay VAT. However, it may be advantageous to register for VAT voluntarily to be able to utilize the input tax credit.
Who should I entrust with my bookkeeping and accounts preparation?
It is recommended that you hire a qualified tax advisor or accounting firm. They will not only assist you in setting up and maintaining your bookkeeping but will also help you with tax issues, financial reporting and communicating with the tax office.
What is the advantage of digital bookkeeping?
Digital accounting has a number of advantages:
- Efficiency: Automated processes save time and reduce errors, allowing you to devote time to your business.
- Accessibility: Data can be accessed anytime and from anywhere, creating transparency for both the tax advisor and the client.
- Integration: Many digital accounting tools can be integrated with other business applications such as CRM or e-commerce platforms.
- Real-time updates: You always have insight into your current finances and can manage them more efficiently, making it easier for your tax advisor to advise you at any time.
- Green: In times of climate change, there is also the aspect of being environmentally friendly. A digital system greatly reduces paper consumption and saves a lot of space normally used for bookkeeping.