Country Desks — Central Europe
Austria
Legal System
Civil law — codified system based on the Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch, ABGB, 1811). Strong Germanic legal tradition; EU member state. Federal structure with nine Bundesländer.
Principal Arbitration Centre
VIAC — Vienna International Arbitral Centre. VIAC Rules 2021. Governed by the Austrian Code of Civil Procedure (ZPO, Part 6). Vienna is a preferred neutral seat for Central and Eastern European disputes.
Corporate Tax
Corporate income tax rate 23% (reduced from 25% in 2024 under the eco-social tax reform). VAT standard rate 20%. Participation exemption and group taxation regime available.
Partner Office
Served in coordination with our Vienna partner office across cross-border M&A, CEE market entry, energy investments and VIAC arbitration proceedings.
Country Desk Brief
Legal System, Investment, Trade & Regulation
Austria operates under a civil law system anchored in the Allgemeines Bürgerliches Gesetzbuch (ABGB), one of Europe's oldest and most influential civil codes, in force since 1812. Commercial law is governed by the Unternehmensgesetzbuch (UGB), with company law regulated separately under the GmbH Act and the Stock Corporation Act (AktG). As an EU member state and a founding member of the EFTA area (prior to EU accession), Austria is fully integrated into EU regulatory frameworks while maintaining a distinct and well-developed domestic legal tradition. Mermeroglu Legal advises on market entry, investment structuring, foreign trade and dispute resolution in Austria, working in coordination with our Vienna partner office.
The principal corporate vehicle for foreign investors is the Gesellschaft mit beschränkter Haftung (GmbH) — the Austrian limited liability company — requiring a minimum registered capital of €35,000. The Aktiengesellschaft (AG) is used for publicly listed or larger corporate structures, with a minimum share capital of €70,000. The GmbH is the dominant vehicle for subsidiaries and joint ventures; branch offices (Zweigniederlassung) and European companies (SE) are also common for international market entry.
Austria imposes no general nationality restrictions on inbound FDI. The Investment Control Act (InvKG), in force since July 2020 and substantially strengthened in 2022, introduced mandatory notification and approval procedures for acquisitions in sensitive sectors by non-EEA investors. Vienna's position as the geographic and commercial bridge between Western Europe and Central and Eastern Europe (CEE) — combined with VIAC's reputation as the preferred neutral arbitration seat for CEE-related disputes — makes Austria a strategically important jurisdiction for cross-border investment and dispute resolution.
At a Glance — 2024 / 2025
Investment & Trade Indicators
Establishment
How to Form a Company
The GmbH is the standard vehicle for foreign investors — minimum registered capital of €35,000 (at least half to be paid in upon incorporation). Incorporation is effected by a notarial deed before an Austrian notary and the company must be registered in the Companies Register (Firmenbuch) maintained by the commercial courts. No residency requirement for managing directors (Geschäftsführer), though at least one authorised signatory must be reachable within the EU. The AG requires a minimum share capital of €70,000 and a supervisory board (Aufsichtsrat) when certain thresholds are met.
Foreign ownership: Austria imposes no general nationality restrictions on FDI. The Investment Control Act (InvKG) requires prior notification and, in some cases, approval by the Federal Ministry of Labour and Economy for acquisitions of 10% or more (or gaining significant influence or control) in companies operating in 27 designated sensitive sectors by non-EEA investors. The review period is up to 4 months. EU FDI Screening Regulation obligations are also met through InvKG procedures.
Group taxation: Austria offers a fiscal group taxation regime (Gruppenbesteuerung) allowing Austrian parent companies to offset losses of group members — including foreign subsidiaries — against domestic profits, making Austria attractive for holding and regional headquarters structures.
Typical steps — GmbH incorporation
Investment Climate
Investment Models & Where Capital is Flowing
Austria consistently attracts FDI as a stable, high-income EU economy with a strategic geographic position at the crossroads of Western and Central-Eastern Europe. Vienna is the most important regional headquarters city for multinationals covering the CEE region — over 350 company headquarters for CEE operations are based in Austria. The ABA (Austrian Business Agency) actively supports inbound investors. Key structural advantages include a highly skilled German-speaking workforce, the group taxation regime, participation exemption, an extensive network of over 90 double taxation agreements, and Vienna's unique position as a neutral international city hosting UN offices and major international organisations.
- CEE regional headquarters — Vienna's proximity to and cultural familiarity with Central and Eastern European markets makes it the preferred base for managing investments across the CEE/SEE region; the group taxation regime reinforces this structural advantage.
- Manufacturing & machinery — Austria has a strong industrial base in high-value machinery, automotive components, steel and paper; export-oriented SMEs (Mittelstand) are a central feature of the economy.
- Tourism & real estate — Austria is one of Europe's top tourist destinations; Vienna and alpine resort real estate attract sustained international investment flows.
- Energy & renewables — Austria produces over 70% of its electricity from renewables (hydro, wind, solar); the Renewable Energy Expansion Act (EAG) targets 100% renewable electricity by 2030, attracting green energy investment and hydrogen projects.
- Financial services & banking — Vienna is a significant financial centre for CEE banking; Erste Group, Raiffeisen Bank International and UniCredit Austria operate major CEE networks from Vienna.
- Life sciences & technology — Vienna and Graz host growing life sciences, medtech and software clusters; the Austrian Research Promotion Agency (FFG) provides R&D incentives for technology-intensive investments.
Foreign Trade — 2024
Recent Trade & Principal Partners
Austria's total goods and services exports were approximately €200 billion in 2024. Goods exports are dominated by machinery, vehicles, pharmaceutical products, metal goods and paper. Services exports — particularly tourism and business services — contribute significantly to total export value. Germany is by far Austria's largest trading partner, accounting for roughly 30% of goods exports and imports. The EU single market accounts for approximately 70% of Austrian trade flows. Austria's geographic position gives it strong trade links with CEE economies, particularly Hungary, Czech Republic, Slovakia and Poland, as well as Italy and Switzerland as non-EU neighbours.
Top Export Partners (2024)
- Germany (~30% of goods exports)
- United States
- Italy
- Switzerland
- Hungary
Top Import Partners (2024)
- Germany (~40% of goods imports)
- Italy
- Czech Republic
- China
- Switzerland
Principal Export Sectors
- Machinery & mechanical equipment
- Vehicles & automotive parts
- Pharmaceuticals & chemicals
- Metal products & steel
- Tourism & business services
Regulatory Developments
Notable Legislative Changes
In force July 2020; expanded 2022
Investment Screening — Investment Control Act (InvKG)
Introduced mandatory prior notification and approval for acquisitions of 10% or more (or significant influence/control) in companies in 27 designated sensitive sectors by non-EEA investors. The 2022 amendment significantly expanded the list of sectors and lowered the acquisition threshold. Reviews are conducted by the Federal Ministry of Labour and Economy; the process can take up to 4 months. Aligns with and fulfils Austria's EU FDI Screening Regulation obligations.
In force 1 January 2024 (phased to 2025)
Corporate Tax Reform — Eco-Social Tax Reform (ÖkoStRefG 2022)
Austria's eco-social tax reform progressively reduced the corporate income tax (KöSt) rate from 25% to 23% (24% in 2023, 23% from 2024). The reform also introduced a carbon pricing mechanism, an investment premium for green and digital investments, and expanded R&D incentives. The participation exemption and group taxation regime remain in force.
In force 1 July 2021
Renewable Energy — Renewable Energy Expansion Act (EAG)
Set legally binding targets for 100% of Austrian electricity consumption to be covered by renewable energy by 2030 (measured on an annual national balance). Introduced market premiums, investment subsidies and simplified permitting for wind, photovoltaic, hydropower and biomass projects. A foundational instrument for green energy investment in Austria.
Ongoing — EU-driven regulatory alignment
Digital & AI — EU AI Act, DORA & NIS2 Directive
As an EU member state, Austria is implementing the EU AI Act (Regulation (EU) 2024/1689), DORA (applicable to financial entities from January 2025) and the NIS2 Directive on cybersecurity. The Financial Market Authority (FMA) supervises financial sector compliance; the Data Protection Authority (Datenschutzbehörde) enforces GDPR. The Austrian Parliament has enacted the necessary transposition legislation for NIS2.
Note: energy, financial services and regulated industries in Austria are governed primarily through sectoral regulators (E-Control, FMA, RTR) and evolving EU and federal regulatory guidance. Project-specific verification against current official sources is recommended.
Resources
Useful Official Links
Our Approach
How Mermeroglu Legal Engages in Austria
Austrian mandates typically combine GmbH or AG structuring, InvKG investment screening advice for sensitive-sector transactions, tax structuring through the group taxation regime and participation exemption, and CEE regional market entry strategy connected to Vienna's role as the leading CEE headquarters location. Our practice is structured to coordinate across those systems through a single point of accountability, working in close coordination with our Vienna partner office.
Each mandate is led by a single matter principal at the firm, supported by an internal team and local counsel — covering company formation, investment screening under InvKG, financing, foreign trade, M&A and dispute resolution before VIAC and the Austrian commercial courts.
INITIAL ENQUIRIES
Market entry and cross-border matters in Austria are handled through coordinated internal and alliance teams.
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