Company Formation & Entity Setup in Austria

How company formation works in Austria

Austria applies a flat 23% corporate income tax rate, unchanged since 2024 after a phased reduction from 25%, alongside a 20% standard VAT rate and employer social security contributions of 20.98% of gross salary under the ASVG system. Dividends are subject to 27.5% withholding tax (23% where the recipient is a corporation), reducible under double tax treaties. A GmbH can be formed with a reduced minimum share capital of €10,000 (€5,000 paid in cash) since 2024, or the standard €35,000 (€17,500 paid in) variant; an AG requires €70,000.

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What it takes to register, and how long

Formation runs through the Firmenbuch (Commercial Register), administered by the regional Commercial Courts (Landesgerichte), typically taking 3–6 weeks for a standard GmbH (notarised formation, capital deposit, Firmenbuch entry).

• Asymmetric loss recapture in Gruppenbesteuerung — — foreign subsidiary losses offset immediately against Austrian taxable income are clawed back and taxed once the subsidiary turns profitable or leaves the group
• First-tier-only foreign inclusion — — only directly held (>50%) foreign subsidiaries resident in the EU or in states with a comprehensive administrative assistance agreement with Austria qualify for the tax group
• No statutory minimum wage — — pay floors are set by roughly 95% sector-level collective agreements (Kollektivverträge), each with its own entry-level minimum, paid over 14 instalments per year
• 14 salary payments — — 13th (Christmas) and 14th (holiday) month payments are mandatory under virtually all collective agreements, affecting payroll cash-flow planning and pro-rating for new hires and leavers

Frequently asked questions