Austria: Advantages Of Establishing A Company's Headquarters In Austria: Part 1

Choosing or changing a multinational company's headquarters involves considerations of quality of living and political stability in addition to economic and legal issues. This arti-cle, in two parts, outlines some of the advantages of and basic information about choos-ing Austria for a company's headquarters. Part 1 is an overview of Austria's social and political background and of some legal forms to consider for a holding company. Part 2 will introduce Austrian tax law and provide additional legal information.

Living in Austria

Located in the centre of Europe, Austria offers an outstanding geographical position. The quick and easy accessibility of branches and subsidiaries in different locations is crucial. For example, from Vienna one can reach Berlin or Zurich in less than 90 minutes, Frankfurt or London in about two hours, and Moscow in less than three hours.

Also, according to Mercer Consulting Group's 2010 survey, for the second straight year the quality of living in Vienna for expatriates is first among 221 large cities (Paris is 34 and London 39). Yet Vienna ranks only 28th for cost of living.

Austria offers stable politics and has been a member of the EU since 1995. And Austria's political stability mirrors its social stability: Between 2000 and 2011, average unemployment was about half the EU's (4.4% versus 8.7%). From 2004 to 2008, not a single working day was lost due to strikes, while the EU average was 43 days lost. Furthermore, the World Competitiveness Yearbook 2010 ranks Austria first in protecting personal security and private ownership.

Introduction to Austrian corporate law

Considering the business and economic risks a company is exposed to, shareholders throughout the world seek to limit their liability as far as possible. This also applies to the legal form of a company headquarters. The following is a brief overview of some possible legal forms for an Austrian holding company that do not entail personal liability from shareholders. The list contains only basic information; it is not a comprehensive treatment of the advantages and disadvantages of these legal forms.

Amongst others, Austrian company law offers these forms: (i) Limited Liability Company (GmbH), (ii) Stock Company (AG) and (iii) Limited Partnership (KG), all of which enjoy a legal personality.

The Limited Liability Company (GmbH)

The GmbH is the most common legal form for companies in Austria (about 2/3 of registered companies are GmbHs). It permits almost all business purposes, with only a few exceptions (e.g., insurance or political activities). Accordingly, most holding companies in Austria are GmbHs. As its name implies, shareholder liability is limited. Limited liability may, however, be overridden by banks who grant loans and demand additional security, such as guarantees from the shareholders or managing directors.

There are no restrictions on shareholders. Individuals, corporations, partnerships, residents, non-residents, Austrians, non-Austrians, and foreign corporations can all be founders and shareholders. Share transfers must be concluded by notarial deed.

The equity capital of a GmbH must be at least EUR 35,000 and every shareholder must invest at least EUR 70. An Austrian GmbH's minimum equity capital is the highest in the EU – a fact that brings trust in the company from investors and business partners throughout Europe. Furthermore, the shareholders need to deposit a cash amount of only EUR 17,500.

The GmbH must have at least one managing director who is subject to shareholders' resolutions. This means that shareholders have the right to issue directives that obligate the managing director(s) to act accordingly. The obligation to observe such directives is delimited by instructions that would give rise to criminal responsibility of the managing director(s).

A supervisory board is optional except in some cases (e.g., if the company employs more than 300 people).

A big advantage of the Austrian Limited Liabilities Companies Act (GmbHG) is that it enables a flexible and dispositive designing of the GmbH.

Both Austrian statutory provisions and constant judicature on capital maintenance rank among the strictest in the EU and protect not only the company's share capital but all company assets. This means that the company may distribute only its profits. This, again, engenders trust in the GmbH from investors and business partners.

The Stock Company (AG)

An AG has no restrictions on its intended business purposes. It requires a minimum share capital of EUR 70,000, while a single stock must be at least EUR 1.

There are no restrictions on shareholders, and the transfer of shares is – by contrast to the GmbH – easy. The tradability of its shares (also in the stock market) is the AG's main advantage.

The AG, though, is subject to a strict regime of statutory provisions. For example, it must always have a supervisory board (two tier management system).

With regard to capital maintenance, please see the remarks above.

The Limited Partnership (Kommanditgesellschaft; KG) in the form of a GmbH & Co KG 

The KG is a partnership, as its name implies. It consists of at least one shareholder with unlimited liability (general partner) and at least one shareholder with limited liability (limited partner). The limited partner is liable towards creditors only for that sum entered as a liability deposit in the Company Register. There are no regulations on the deposit; any amount may be determined. Limited partners are not entitled to represent the company. They merely have certain control rights, which can be amended through the articles of association (AoA).

The founding of a KG is simple, and no notarial deed is needed. But, because there are few statutory provisions, the AoA should be precise to avoid conflicts between shareholders wherever possible.

The KG can be structured as a GmbH & Co KG. As its name says, a GmbH can be assigned as general partner, so the GmbH holds the position of general partner with unlimited liability. Complete limitation of shareholders liability can thus be achieved.

It should be mentioned, however, that the Austrian Supreme Court has held that the rules on capital maintenance (originally designed for corporations) also apply to a KG if no individual holds the position of general partner. Therefore, please refer to the remarks on capital maintenance above under "The Limited liability Company (GmbH)".


An Austrian headquarters means the possibility of reorganisations, such as mergers, demergers and conversions. Such measures often bring tax relief and allow for the reorganisation of a group of (affiliated) companies.


Austria offers a variety of reasons to establish or relocate a company headquarters there. Next to the high quality of living and stable political and legal systems are the above-mentioned legal forms, which allow for the designing of a group of (affiliated) companies according to the needs and wishes of the top management or shareholders.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions