How to set up a company in Austria

Practical Guide

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Which corporate form is recommended for setting up a sole shareholder subsidiary company in Austria and why?

Establishment of a limited liability company (Gesellschaft mit beschränkter Haftung - GmbH)

For the establishment of a subsidiary in Austria the corporate form of a limited liability company (GmbH) is recommended. It is the most frequently chosen legal form in Austria for the establishment of a company. The shareholder(s) of the subsidiary (= Austrian limited liability) company may be a natural person(s) or a legal entity or legal entities. The shareholders may be non-Austrian citizens or legal entities established under the law of another country.

  • Liability and the principle of separation

One of the greatest advantages of a limited liability company in Austria is the principle of separation: that means that the shareholders are not liable for the company's debts with their personal assets, but only the company's assets are liable (no personal liability of the shareholders).

The liability of the shareholders is limited by the amount of the shareholders' contributions.

  • Establishment

A limited liability company is established by concluding a company agreement in the form of a notarial act, but it does not come into existence (acquire legal capacity) until it is entered in the Company Register.

In the case of the formation of a one-person limited liability company, “Einpersonen GmbH”, the limited liability company is formed by a declaration of formation.

The GmbH may be established for any purpose, but it must not be established for political activities or for banking and insurance activities.

The limited liability company must have its own share capital, management and accounting system, and is subject to Austrian law (= the country of incorporation), even if the shareholder(s) are foreign natural persons or foreign legal entities of their Austrian subsidiary company.

Share capital

  • Minimum share capital The minimum share capital to be raised by the shareholders is EUR 35,000. It can be raised by cash or non-cash contributions.

At least half of it must be paid in cash (EUR 17.500,00) prior to the registration in the Company Register.

  • Company light ("GmbH light") with the privilege of a low minimum share capital.

The Company light is a special feature under Austrian Company law: The purpose of this privilege is to lower the amount of the share capital for the first ten years after foundation to facilitate the foundation.

Accordingly, the share capital is still EUR 35,000, but in the first ten years only EUR 10,000 must be raised, of which EUR 5,000 must be paid in cash. After ten years, the privilege no longer applies, and the amount of EUR 35,000 must be raised.

In the first ten years the privilege is also effective in case of insolvency. A one-person limited liability company (Ein-Personen GmbH) can also benefit from the foundation privilege.

Minimum number of shareholders

The establishment of a limited liability company does not require a minimum number of persons: one person alone can also establish a limited liability company (,,One-Person-GmbH” ,,Ein-Personen-GmbH").

The principle of separation also applies to a One-Person-GmbH.

What are the requirements for capital and ownership of quotas or shares by foreign companies in Austria?

Minimum share capital

See answers 1 and 2 to the question before 2.


It is not necessary for the shareholders to be Austrian citizens: Any domestic or foreign natural person or legal entity may be a shareholder of an Austrian limited liability company.

Foreign companies that participate in the formation in Austria must prove their legal existence by a confirmation from the competent court or chamber of commerce. If this is not issued in German (=the official language in Austria), a certified translation into the German language by a certified translator enrolled in the list of Austrian court interpreters must be provided.

What are the requirements for the corporate governance of the company in Austria?

Number of managing directors

Each limited liability company must have at least one managing director. This(it is a mandatory body. The managing director manages and represents the limited liability company. Several managing directors may be appointed.

Who can be a managing director

Only physical (natural) persons can be appointed as managing directors, but not legal entities. A limited liability company cannot be a managing director. The managing director does not have to be a shareholder of the limited liability company; hence, an external managing director can also be appointed.

Other requirements

The managing director does not have to be an Austrian citizen, nor does he have to have a domicile or residence in Austria.

However, in urgent cases, if the managing director(s) required to represent the limited liability company is/are absent or cannot be reached in Austria, the court may, at the request of a party involved – e.g., a business partner of the GmbH, a creditor, an employee, or a public authority – appoint a so-called “emergency managing director”, the so called Notgeschäftsführer. If you want to avoid this, it is advisable to appoint either a managing director or at least an authorized signatory [a so called “Prokurist”] with ordinary residence in Austria.


The managing director is appointed by shareholders' resolution. The appointment is to be registered by the managing directors in the Company registers without delay.

What are the legal requirements a foreign company should comply with when incorporating a subsidiary?

Same requirements for domestic and foreign companies

There are no specific legal requirements for foreign companies or natural persons coming from abroad to establish a company with limited liability in Austria.

However, it is essential to consult a lawyer qualified in Austria (Rechtsanwalt) and a tax advisor (Steuerberater) before founding the limited liability company to obtain knowledge of the legal and tax provisions.

Formation documents

All documents required for the formation of the limited liability company must be translated into German (=the official language in Austria) by a certified translator enrolled in the list of Austrian court interpreters.

In case the shareholder of the Austrian limited liability company is a foreign company, the individuals who will sign the Articles of Association must provide an officially translated power of attorney (Spezialvollmacht) granting them the right to represent the founder and the shareholder company.

What is the process for the incorporation of the subsidiary in Austria?

The formation of a GmbH in Austria takes place in the following steps:

  • pre-founding company (“Vorgründungsgesellschaft”): prior to the conclusion of the company’s agreement, the limited liability company is in the pre-founding company stage. In this stage the law assumes that a "pre-founding agreement" exists. Such a pre-founding company is qualified as a civil law company (Gesellschaft bürgerlichen Rechts) - however, it has no legal personality. The founders of the company are personally and unlimitedly liable for the liabilities of the pre-founding company. Once the limited liability company is founded there is no automatic transfer of legal rights and obligations to the limited liability company;
  • establishing the contract or statutes: the contract establishing the limited liability company requires the form of a notarial deed and must have the following content: - company name and registered office - object of the company - amount of the share capital - amount of individual contributions;
  • preliminary company (,,Vorgesellschaft”) Between the establishment of the company’s agreement (the signing) and the registration in the Company register the company is in the stage of a preliminary company.
    If in this phase the company acts in the name of the future limited liability company, the persons acting (usually the managing directors) are personally liable for the liabilities. For the constitutional act of the company (the signing) the shareholders either must present themselves in Austria for signing the documents or they appoint somebody, preferably the managing director, to sign in their names.
    For this it is required that the shareholders produce a special power of attorney that has to be signed at any Austrian consulate/embassy abroad and then handed over to the director. At this stage, all business papers must bear the designation: “in incorporation" (in German: “in Gründung”) must be indicated.
    Once the company is registered in the Company register the contracts concluded and their respective rights and obligations (= legal relationships) are automatically transferred to the "finished" GmbH;
  • registration of the company in the Company register
    - deposit of the capital contribution: before the company is registered in the Company Register, the share capital must be paid into the account of a bank holding an Austrian banking licence. The account holder must be the newly founded company or the managing director(s). The nominal capital must be at the free disposal of the managing directors. The managing director must prove this when registering the company in the Company register. For that purpose, the banks issue a written confirmation;
    - registration in the Copany register: the application to have the company registered must be signed by all the managing directors. Furthermore, the company’s agreement and the documents whereby the managing directors are being appointed as well as the bank confirmation must be attached to the application.
    With the registration in the company register the limited liability company comes into existence. This is called the principle of publicity (Grundsatz der Publizität).
  • trade license (Gewerbeberechtigung): in order to be operative, the company needs to have a trade license for the object for which it was established. The Austrian trade law (Gewerbeordnung) contains the relevant activities for which a trade license is required. If the company is engaged in one of the activities for which a trade license is required, an application for a trade license must be filed with the competent authority (not the court). Furthermore, a managing director (,,gewerberechtlicher Geschäftsführer”) must be appointed who has the personal qualifications or the required certificate of competence for the activities for which the company was set up.

What are the usual challenges for foreign companies setting up a subsidiary in Austria?

The biggest challenges for foreign companies are issues of legal compliance, tax regulations and employment law. It is therefore essential to consult an Austrian lawyer qualified in Austria (Rechtsanwalt) and a tax advisor (Steuerberater) before founding the GmbH.

Money laundering

Strict European and Austrian money laundering rules require that the company give to the Austrian bank clear information about the origin of the money transferred to the Austrian bank account and the purpose of your business.

Register of Economic Owners (Register wirtschaftlicher Eigentümer)

After the company has been registered in the commercial register, a notification must be made in the Register of Economic Owners. In order to combat money laundering and terrorist financing, the Economic Owners Register Act (WiEReG) established the "Economic Owners Register". This enables those obliged by the money laundering regulations (such as banks and real estate agents), but also the authorities, to more easily determine the beneficial owners of legal entities.

All newly established legal entities must submit a report within four weeks of entry in the respective Company Register. Limited liability companies (GmbH) are exempt if all shareholders are natural persons (the data from the commercial register is used).

If no report is made, there is the threat of a compulsory penalty and subsequently also a financial penalty of up to EUR 200,000 in the case of intent and up to EUR 100,000 in the case of gross negligence.

Beneficial owners are always one or more natural persons. Anyone who holds more than 25% of an entity is the beneficial owner. If another entity has a shareholding of more than 25%, the beneficial owner is the natural person who exercises control over that entity. In the case of a chain of ownership, the beneficial owner must be determined at the end of the chain of ownership. Only if this is not possible, the top management level shall be indicated as the beneficial owner.

Labour law

Should the GmbH hire employees, it is highly advisable to be informed about the applicable labor law and social law regulations as well as about the tax law regulations.

Trademark protection

Trademark protection regulations must also be observed: A limited liability company that wants to identify its goods and services with trademarks in order to distinguish itself from competitors and their goods or services must register the trademark with the competent authority.

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