What are the criteria and procedures for starting a business in Austria for individuals and legal entities, including age, authorized capital, compliance with laws, entrepreneurial qualifications, residence, and other requirements?

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The procedure for opening a business in Austria depends on the organizational and legal form chosen for conducting the business. Both individuals and legal entities can engage in entrepreneurship, and different requirements apply to each.

To open a business in Austria, an individual must meet the following criteria:

· the person must be at least 18 years old;

· sufficient funds to pay the statutory capital are required;

· compliance with Austrian laws is essential;

· confirmation of the entrepreneur's qualifications (educational diploma, previous work experience in the relevant field);

· availability of a permanent residence in Austria;

· possession of a document confirming the legality of the grounds for residing in Austria.

Individual Entrepreneur

An Individual Entrepreneur (Einzelunternehmen; EPU) is an individual who manages a business on their own behalf and for their own account. In Austria, being an individual entrepreneur is the most popular way to run a business.

Features:

· each individual entrepreneur bears unlimited liability for all business and private assets;

· a residence permit in Austria is required for conducting business activities in Austria;

· individual entrepreneurs wishing to engage in trade require a trade license;

· registration in the Austrian Commercial Register (Firmenbuch) is mandatory only for private entrepreneurs whose annual turnover exceeds 1 million euros or 700,000 euros for two consecutive years. (However, voluntary registration in the Firmenbuch is possible.);

· the individual entrepreneur pays a 20% income tax;

· an individual entrepreneur has the right to hire employees based on an employment contract.

To register a company in Austria, the following steps need to be taken:

· reservation of the Commercial Name;

· registration of the Legal Address;

· preparation of the Articles of Association with Notarial Certification;

· submission of Documents to the Local Trade Register Office;

· obtaining Tax Numbers and VAT Numbers;

· submission of Documents for Obtaining Necessary Business Permits and Licenses.

Limited Liability Company (Gesellschaft mit beschränkter Haftung, GmbH):

· сan be established by one or several individuals, with no maximum limit on the number of participants;

· limited personal liability;

· minimum statutory capital: €35,000, with the possibility of contributions in kind;

· two-tier taxation system: corporate income tax is paid on the company's income initially, followed by the taxation of dividends distributed among participants;

· the company is managed by a management board. The creation of a supervisory board is mandatory only for companies with a statutory capital exceeding €70,000 and more than 50 founders;

· the management board must have at least 1 member, and the supervisory board, if created, must have at least 3 members;

· registration is carried out with the relevant authority at the company's registered office (administration, magistrate, municipal district office). The following documents are submitted for registration:

- registration application;

- notarized articles of association;

- certificate from a local bank confirming the payment of the statutory capital.

Joint-Stock Company (Aktiengesellschaft, AG):

· can be established by one or several individuals;

· there is no maximum limit on the number of participants;

· limited personal liability;

· minimum statutory capital: €70,000, with shares having a nominal value of at least €1;

· two-tier governance system: the executive board manages the ongoing business, while the supervisory board oversees the activities of the executive board and grants approval for certain actions;

· board composition: the executive board must have at least 1 member, and the supervisory board must have at least 3 members;

· registration is done with the relevant authority at the company's registered office (administration, magistrate, municipal district office). The following documents are submitted for registration:

- registration application;

- notarized articles of association;

- notarized decisions on the appointment of the executive board and supervisory board;

- written confirmation from the founders that the AG has been properly established;

- certificate from a local bank confirming the payment of the statutory capital.

General Partnership (Offene Gesellschaft, OG):

· conducts commercial activities, and all partners bear full responsibility for the company's debts with their entire property;

· all partners actively participate in the management of the company; individuals and legal entities not serving as partners are not involved in the management.

· single-level taxation system: only the corporate income of the partners is taxed.

Limited Partnership (Kommanditgesellschaft, KG):

· engages in commercial activities and has one or more general partners who have unlimited joint responsibility for all company debts, and one or more limited partners who limit their liability for debts to a certain amount;

· external managers (individuals not acting as general partners) cannot be appointed;

· single-level taxation system: only the corporate income of the partners is taxed.

For more details on the registration procedure, required documents, and other specifics, refer to the link.