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...