Even though the period of time before taking the first step and the last stage of the incorporation is pretty long, if all the documents are submitted correctly, a new business opened in Austria can begin its commercial activities no later than a month.
The Austrian workforce is well trained and educated and the rate of unemployment is among the lowest in Europe and worldwide.
The personnel employment is not a complex process in Austria and many incentives are offered to the foreign individuals willing to work here, for example no work permit is required for the persons from an EU country, Liechtenstein or Switzerland. The only condition is that the nationals of these countries must announce their presence in maximum three days from the arrival.
There are several residence permits that can be obtained by the foreign nationals before starting to work in Austria:
- settlement permits (for a period of 18 months, limited or unlimited - only the unlimited one provides free access to the labor market),
- permanent residence (it’s offered after five years of living in Austria and it’s providing unlimited access to the labor market),
- resident permit (for artists, rotational workers, persons dispatched by an enterprise, self-employed persons, researchers and others)
Member of the EU, Austria is considered the 4th economic power of Europe and a political and economic center.
The main fields where the Austrian government is offering support are:
- the research and development work,
- growth of the small and medium businesses,
- improvement of the regional economic structure,
- protection of the environment,
- education and trainings,
- modernization and restructuration.
The small and medium businesses are also helped with a financing ceiling of the investments of 15% and 7.5%.
An advantage of opening a holding company in Austria is the exemption from paying withholding taxes on dividends paid to Austrian subsidiaries and the exemptions granted on dividends paid to the non-resident companies, if the parent company owns at least 10% of the share capital for a minimum period of one year. The income mustn’t be provided by interest, leasing property other than land and buildings or capital gains. Also the non-resident subsidiaries must pay an income tax of minimum 15% and have mostly individuals as shareholders.
Other advantages are granted by the double tax treaties signed with more than 70 countries which grant the exemptions from paying withholding taxes on dividends, interests and royalties and income taxes. Other special provisions are granted by the EC Interest and Royalties Directive, EC Parent/Subsidiary Directive and the EC Merger Directive.
The interest costs is related to the international qualified participation exemption, the acquisition of participations falling under the national participation exemption and the international portfolio participation exemption may be fully deducted from the tax base. An exception is constituted by the interest costs related to the acquisition of shares that were, directly or indirectly, acquired from a group company or from a controlling shareholder, which are not deductible. The interest and royalties paid to a parent company which owns at least 25% of the subsidiary for a minimum period of one year are also exempted from taxation.
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