Company formation in brief
Austria is not a tax haven or offshore jurisdiction, and of the diversity of organisational and legal forms of Austrian enterprises, a prospective non-resident investor could be interested in setting up one of the following:
There is no fundamental difference between limited and unlimited liability partnerships, except that:
In case a partnership's annual turnover will be less than € 400,000 or the intended type of activity is not directly related to trade, production or provision of professional services such as medical or lawyers, then a partnership with unlimited liability will be registered in the form of OEG, and a limited liability partnership in the form of KEG.
If partnership conducts actual activities in Austria, it must have at least one Austrian resident among its managers who could also be a resident of one of the neighboring countries of Austria. Depending on specifics of the proposed partnership's activity, the resident manager must obtain in his name either a formal permit or a license.
There are more than 80 types of activities which are prohibited without an appropriate license in Austria. Licensing as such is rather long process which requires confirmation of the manager’s professional compliance, verification of his/her non-criminal past, availability of reference letters, etc. The manager is also required to be registered in Austria for social security purposes.
Gesellschaft mit beschrankter Haftung (GmbH) is a private limited company that has specifics as follows:
By analogy with partnerships, to operate in Austria, a GmbH will have to obtain a license.
In some cases, when, for example, a capital of GmbH exceeds €70,000 and when it has more than 50 shareholders, such company will be obliged to form a supervisory board to control activities of directors, even if this was not initially provided for by the company' s Memorandum of Association.
Aktiengesellschaft (AG) is a joint stock company that has specifics as follows:
Stiftung, being a specific form of a private foundation, is a legal entity designed for management of its founder's assets and property.
A capital of Stiftung is formed by contributions of its founder in cash and other kind, for example, real estate, antiques, jewelry, patents, copyrights, etc.
An agreed amount of the authorized capital is fixed by the founder upon registration, regardless to the actual size of Stiftung' funds. This guarantees anonymity of the actual Stiftung assets, since the founder has rights to add any contributions to it after registration.
After the founder transfers his/her property to Stiftung, legally it no longer belongs to the founder and no legal claims can be made against this property, even if the founder is prosecuted (except in proven cases of fraud). In practice, the founder remains an actual owner of his/her property and controls it through authorized lawyers during his/her lifetime in the same way as in a classic trust. Any individuals and legal entities can be beneficiaries of Stiftung, as well as the founder him/herself, who remains practically anonymous.
Stiftung is managed and controlled by a board consisting of at least three members, two of whom are required to be residents of Austria. The founder and beneficiaries are not entitled to be members of the board, whose members have the right to delegate their authority to third parties, regardless of their place of residence. The founder may limit rights of members of the board and has a right of veto on any decisions. The board meets once a year to approve an annual report, which is not available for public in Austria.
Zweigniederlassungen (branch of a foreign company) is an economically and geographically separate division of a foreign legal entity in Austria.
A branch is not a legal entity independent of the parent company, but its activities must be organized in such a way as to ensure further financial and administratively independent “existence” in Austria. A branch is endowed with a property of the parent company and acts on the basis of provisions approved by the parent company which also decides on the appointment of a head of the branch, who in turn works based on a power of attorney issued by the parent company.
The Austrian branch' name must match the name of the parent company.
A branch, like any other Austrian company or partnership, is required to obtain a license to conduct business activities in Austria.
Membership in the Chamber of Commerce of Austria is mandatory for all enterprises registered or incorporated in Austrian.
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