Open a holding company in Austria
Austrian Holding CompanyUpdated on Wednesday 24th April 2019
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A holding company registered in Austria is usually a company which owns shares in another company. The quantity of shares owned in another firm determines the powers the holding company has in its management. The companies may be in Austria or abroad.
The Austrian holding companies are constituted as Gesellschaft mit beschraenkter Haftung (private limited company - GmbH) or Aktiengesellschaft (joint stock company - AG).
Legal forms of holding companies in Austria
The limited liability company can be formed with one shareholder and one director with a minimum share capital of EUR 35.000 in cash or kind. The joint stock company can be incorporated by at least one shareholder with a minimum capital of at least EUR 70.000. This capital is divided into shares and each share has to value at least EUR 1.
The advantages of opening a holding company are numerous:
- • tax exemptions: exemptions are granted for the corporate tax of 25% (usually the tax payable is EUR 1,750 for a GmbH and EUR 3,500 for an AG),
- • a vast network of double tax treaties: these can apply for these types of companies and grant exemptions from withholding taxes on dividends, interests and royalties and exemptions from paying corporate and income taxes,
- • other treaties: the EC Interest and Royalties Directive, EC Parent/Subsidiary Directive and the EC Merger Directive,
- • the distribution of dividends: the outgoing dividends, those distributed by a company in Austria, for example, a GmbH, are subject to a withholding tax deduction – this is an important consideration for investors looking to open a holding company,
- • other tax-free actions: the mergers, demergers, and contributions of qualifying asset can be performed in a tax-free manner and Austria has no formal thin-capitalization rules.
The registration of a holding company in Austria as a limited liability company or a joint stock company takes around 25 days if all the documents are in order and deposited on time.
There are no special requirements for the founders and shareholders of an Austrian AG or GmbH. They can have any nationality and it is not mandatory for them to reside in the country. As far as the management of the company is concerned, the AG must have a Board of Directors with at least three members on the Supervisory Board and they must convene at least four times each year. There are certain conditions for the Supervisory Board members. The GmbH has lighter management requirements, with a Supervisory Board being mandatory only in special cases when the company has a capital of more than 70,000 EUR or it has more than 50 shareholders.
In the beginning, the minimum share capital must be deposited in a bank account and a certificate of deposit has to be requested.
The articles of association or the declaration of establishment must be notarized before registration in the local court. An announcement regarding the incorporation is published in the Wiener Zeitung followed by the registration at the Tax Office.
The following step is the registration made at the authority in the Trade Register. If the company will have employees, they must be registered for social security.
The last step of incorporation is the registration with the municipality. The registration in the Register Trade, for social security and with the municipality is made in the same time with the registration at the Tax Office.