Foreign Investment in Austria

These are the highlights if you want to know more about the Foreign Investment in Austria. This entry was drafted by Kraft & Wildenhofer Rechtsanwälte. Link to e-IURE Network.

This collaboration is a brief step-by-step guidance. In no case it can be considered as legal advice. If you want -or need – legal advice, ask for a lawyer or a law firm. In that case Kraft & Wildenhofer Rechtsanwälte is an excellent option in Austria.

There are in general no restrictions on converting or transferring funds related to foreign investments. All cross-border capital transactions for non-residents and residents, including the acquisition of Austrian securities, debt services, the repatriation of profits, interest payments, dividends and proceeds from the sale of investment are unrestricted.

Nevertheless the Austrian Central Bank (Nationalbank) is entitled to enact restrictions pursuant to EU-law under certain circumstances, e.g., major difficulties in international relationships, where the security of Austria is endangered, etc. In this case certain transactions require the permission of the Austrian Central Bank.

The EU-directives on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing do apply.

Furthermore various transactions related to foreign countries, e.g. foreign direct investments, must be notified to the Austrian Central Bank for statistical purposes.

Austrian Foreign Trade Law and the applicable EU directives provide for restrictions regarding the import and export of certain goods (e.g. fire arms).

The nine provinces have established regulations (Grundverkehrsgesetze) under which the acquisition of real estate (and certain rights related to real estate) by foreigners (in some cases also by Austrians) is subject to approval by the provincial authorities. These restrictions concern primarily real estate for agriculture use and real estate in tourist regions. The regulations differ from province to province.

Most business activities in Austria require a business license (Gewerbeberechtigung). If the business is conducted by a corporation, a partnership or a branch of a foreign company an individual person (trade manager) must be named who is responsible for the correct conduct of the business. This person is commonly called the “gewerberechtlicher Geschäftsführer”, who must be resident in Austria, in the EEA or Switzerland or in a country where penalties of Austrian administrative authorities can be executed. Since the manager must be in a position to work in the business accordingly which the authority checks, therefore, in most cases a “gewerberechtlicher Geschäftsführer” is nominated who is resident in Austria.

Transfer of dividends, interests and royalties abroad

Austria does, generally, not restrict the transfer of dividends, interests and royalties abroad. The exemptions are mentioned above.

For the taxation of these transfers see section “Tax Law”.

Foreign personnel

There are restrictions on employment of foreign employees.

Citizens of the „old“ EU member states plus citizens of the member state of the enlargement 2004 have already been entitled to work in Austria without a work permit. On December 31st, 2013 the restrictions concerning citizens of Bulgaria and Romania ended. Currently special transition rules still apply for citizens of Croatia.

The former system of a quota-based system has been changed. For key personnel, high qualified persons and skilled workers in shortage occupations the “Red-White-Red-Card” is possible: the work permit is valid for a certain job in a certain company for a maximum period of one year. After a year a (i) “Red-White-Red-plus” card or (ii) a temporary residence permit is possible.  The“ Red-White-Red-plus” allows working not only in a certain job but in the whole country. After five years a residence permit EC (Daueraufenthalt EU) can be obtained if an integration agreement (especially evidence of knowledge of the German language has to be provided) is fulfilled.

Additionally, there are special provisions regarding juvenile persons, family reunification and citizens of non-EC member states having a residence permit of another EC-member state.

Foreign companies who perform services in Austria with foreign personnel have to consider that some rules of Austrian labour law apply, e.g., the minimum salaries stipulated in collective bargaining agreements, restrictions of working time etc. Any violation of provisions can lead to administrative penalties.