You Won’t Believe How Easy It Is to Open a Branch or Subsidiary in Austria (With a Tax Advisor’s Help)

Expand­ing into Aus­tria is a strate­gic move for many inter­na­tion­al busi­ness­es. Locat­ed in the heart of Europe, Aus­tria offers polit­i­cal sta­bil­i­ty, EU mem­ber­ship, a skilled work­force, and a busi­ness-friend­ly tax envi­ron­ment. Yet for many for­eign entre­pre­neurs, the per­ceived com­plex­i­ty of set­ting up a legal pres­ence in Aus­tria feels like a bar­ri­er.

As a tax advi­sor spe­cial­ized in sup­port­ing for­eign com­pa­nies, I’m here to tell you: it’s not as dif­fi­cult as it seems. With the right sup­port, you can estab­lish a sub­sidiary (GmbH) or a branch (Zweignieder­las­sung) effi­cient­ly, cost-effec­tive­ly, and ful­ly com­pli­ant with Aus­tri­an law.

Why Choose Austria as Your EU Business Hub?

Aus­tria ranks high­ly for ease of doing busi­ness with­in the EU and is par­tic­u­lar­ly attrac­tive for com­pa­nies look­ing to access Ger­man-speak­ing mar­kets (Ger­many, Switzer­land, South Tyrol). Its cen­tral loca­tion, mod­ern infra­struc­ture, and sta­ble reg­u­la­to­ry envi­ron­ment make it a pre­ferred des­ti­na­tion for logis­tics, man­u­fac­tur­ing, dig­i­tal ser­vices, and tech.

Prac­ti­cal Tip: If you are already work­ing with clients in Aus­tria or plan to hire local staff, it makes sense to estab­lish a local enti­ty or branch to ensure tax com­pli­ance and build trust.

Subsidiary vs Branch: What’s the Difference?

For­eign com­pa­nies typ­i­cal­ly have two options:

Subsidiary (GmbH)

• A sep­a­rate legal enti­ty under Aus­tri­an law
• Can enter into con­tracts, own assets, and be sued in its own name
• Lim­it­ed lia­bil­i­ty: share­hold­ers are only liable up to their cap­i­tal con­tri­bu­tion
• Ide­al for com­pa­nies seek­ing a long-term or sub­stan­tial mar­ket pres­ence

Branch (Zweigniederlassung)

• Not a sep­a­rate legal enti­ty; legal­ly part of the par­ent com­pa­ny
• No min­i­mum share cap­i­tal required
• Still must reg­is­ter in Aus­tria but does not pro­vide lia­bil­i­ty sep­a­ra­tion
• Often used for project offices or tem­po­rary com­mer­cial oper­a­tions

When to Choose What:

• Sub­sidiary: if you plan to hire employ­ees, sign local con­tracts, or build a last­ing pres­ence
• Branch: if you want a lean­er set­up for spe­cif­ic projects, lim­it­ed dura­tion, or cost rea­sons

Prac­ti­cal Tip: Sub­sidiaries are often seen as more trust­wor­thy by Aus­tri­an banks and cus­tomers.

How to Set Up a Subsidiary (GmbH) in Austria

Set­ting up a lim­it­ed lia­bil­i­ty com­pa­ny in Aus­tria (“GmbH”) is a well-defined process. Here’s how it works:

Step-by-Step Guide

1. Choose a Company Name

The name must be unique, indi­cate the company’s legal form (e.g. GmbH), and be approved by the Com­mer­cial Reg­is­ter.

2. Draft Articles of Association

These must be in Ger­man, nota­rized, and out­line the pur­pose, share cap­i­tal, and share­hold­er struc­ture.

3. Open a Bank Account

You’ll need to deposit the min­i­mum share cap­i­tal of EUR 35,000, of which at least EUR 17,500 must be paid in imme­di­ate­ly.

4. Notarize the Formation

In-per­son or via pow­er of attor­ney, a notary will authen­ti­cate the foun­da­tion doc­u­ments.

5. Register with the Commercial Register (Firmenbuch)

This is the offi­cial act of incor­po­ra­tion. Once reg­is­tered, the GmbH is legal­ly active.

6. Tax and VAT Registration

The new enti­ty must be reg­is­tered with the Aus­tri­an tax office and obtain a tax num­ber and, if applic­a­ble, a VAT ID (UID).

7. Register for Payroll (If Employing Staff)

Oblig­a­tions include reg­is­ter­ing with Aus­tri­an social insur­ance and wage tax sys­tems.

Timeline

With pro­fes­sion­al help, you can com­plete the entire process in 2–4 weeks.

Prac­ti­cal Tip: A tax advi­sor can file most doc­u­ments dig­i­tal­ly and rep­re­sent you via pow­er of attor­ney, so you don’t have to be phys­i­cal­ly present in Aus­tria.

How to Register a Branch in Austria

Estab­lish­ing a branch is a sim­pler process but still sub­ject to Aus­tri­an legal for­mal­i­ties.

Step-by-Step Guide

1. Provide Proof of Parent Company

You need an excerpt from the for­eign com­mer­cial reg­is­ter, trans­lat­ed by a cer­ti­fied trans­la­tor.

2. Draft a Power of Attorney

Appoint a local rep­re­sen­ta­tive (can be Aus­tri­an or for­eign with res­i­den­cy), autho­rized to man­age the branch.

3. Notarize and File the Registration

A notary authen­ti­cates the branch’s reg­is­tra­tion doc­u­ments.

4. Entry into the Austrian Commercial Register

Once filed, the branch is rec­og­nized as an Aus­tri­an tax sub­ject.

5. Tax Number and Optional VAT ID

If the branch per­forms tax­able activ­i­ties, it must reg­is­ter with the tax office.

Prac­ti­cal Tip: Although a branch doesn’t need cap­i­tal, it must still main­tain Aus­tri­an-com­pli­ant account­ing records.

Tax and Legal Considerations

Corporate Income Tax (Körperschaftsteuer)

• Flat rate of 24% (reduc­ing to 23% in 2026)
• Applies to world­wide income for Aus­tri­an GmbHs
• Branch­es pay tax on Aus­tri­an-sourced income only

VAT (Umsatzsteuer)

• Stan­dard rate: 20%, with reduced rates (10% or 13%) on some goods/services
• Required if sell­ing goods/services local­ly or stor­ing inven­to­ry in Aus­tria

Other Obligations

• Annu­al finan­cial state­ments and tax returns
• Pay­roll tax and social insur­ance if hir­ing staff
• Wage tax with­hold­ing, vaca­tion pro­vi­sions, and employ­ee report­ing

Prac­ti­cal Tip: Your Aus­tri­an tax advi­sor can act as your fis­cal rep­re­sen­ta­tive and help you avoid fines, espe­cial­ly if you are a non-EU com­pa­ny.

Why Work With a Tax Advisor?

Estab­lish­ing a legal enti­ty in a for­eign coun­try involves more than paper­work. Here’s how a local tax advi­sor stream­lines the process:

1. End-to-End Coordination

• Com­pa­ny for­ma­tion
• Notar­i­al appoint­ments
• Bank intro­duc­tion and cap­i­tal ver­i­fi­ca­tion
• Com­mer­cial and tax reg­is­tra­tion

2. Compliance & Reporting

• Keeps you informed of fil­ing dead­lines
• Han­dles ongo­ing account­ing, pay­roll, and VAT report­ing
• Pre­pares and files your annu­al finan­cial state­ments

3. Communication with Authorities

• All fil­ings and com­mu­ni­ca­tion in Ger­man
• Pow­er of attor­ney allows full rep­re­sen­ta­tion

4. Planning and Advisory

• Struc­ture your Aus­tri­an pres­ence effi­cient­ly
• Avoid dou­ble tax­a­tion
• Deter­mine the opti­mal VAT set­up (e.g. OSS/IOSS, VAT groups)

Prac­ti­cal Tip: Many advi­sors offer fixed-fee pack­ages for com­pa­ny for­ma­tion includ­ing ini­tial tax reg­is­tra­tions and set­up con­sul­ta­tions.

Real-World Example: Tech Startup Launches Austrian GmbH in 3 Weeks

A UK-based SaaS com­pa­ny approached us to set up a sales sub­sidiary in Vien­na. With­in 21 days, we had:

• Reserved the name and trans­lat­ed their doc­u­ments
• Com­plet­ed notar­i­al for­ma­tion via POA
• Opened their Aus­tri­an busi­ness account
• Reg­is­tered them for VAT and pay­roll

They began billing Aus­tri­an clients the fol­low­ing week, with all tax report­ing ful­ly auto­mat­ed.

Result: No delays, full com­pli­ance, and cred­i­bil­i­ty in the Aus­tri­an mar­ket.

Final Thoughts: A Local Presence Opens Doors

Whether you choose a branch or sub­sidiary, set­ting up in Aus­tria is eas­i­er and faster than you might expect. With pro­fes­sion­al guid­ance, you can avoid delays, ensure legal com­pli­ance, and posi­tion your busi­ness for long-term growth in the EU.

Ready to take the next step? As a tax advi­sor spe­cial­iz­ing in inter­na­tion­al expan­sions, I help com­pa­nies like yours set up and thrive in Aus­tria. Con­tact me today for a free con­sul­ta­tion and let’s build your Aus­tri­an pres­ence – the right way, from day one.