Company Registration in Austria (GmbH): Offshore or Not?

Is Austria an offshore jurisdiction?

Austria is an ordinary European jurisdiction with full taxation. Corporate income tax (Körperschaftsteuer) is 23% of taxable profit, whatever its size; until 2022 the rate was 25%, and in 2023 it was 24%. There is also a minimum tax: 5% of one quarter of the statutory minimum capital for each full quarter, which means EUR 125 per quarter at the minimum capital of EUR 10,000.

If you need low tax without a presence, see our page on offshore jurisdictions. An Austrian GmbH makes sense where clients, a warehouse, employees or partners in Austria and the EU matter.

Key facts about a company in Austria

Who an Austrian GmbH suits

• manufacturers and trading companies opening a branch, warehouse or sales operation in Austria;
• service businesses with a team or clients in Austria and neighboring EU countries;
• groups that need a European operating company whose status banks and counterparties readily understand.

For online consulting without a presence in Austria, a UK Ltd is usually simpler. Other European options are covered in Estonia vs Cyprus.

When an Austrian GmbH is a poor fit

• online services with no clients, employees or office in Austria;
• a structure set up for low tax: the 23% rate and the 27.5% tax on dividends make it expensive for that purpose;
• projects whose owner is not ready for full bookkeeping, filings with the Firmenbuch and an annual review of beneficial owners.

For such cases we pick options from our list of jurisdictions and compare the cost of ownership using our guide on the full cost of a company.

The GmbH and the register

A GmbH comes into existence when it is entered in the commercial register (Firmenbuch). The minimum share capital is EUR 10,000, and as a general rule half of it is paid in cash on incorporation. The articles of association are executed before a notary. For a GmbH with a single founder who is an individual, the law allows simplified incorporation without a notary: the capital is paid into a bank that takes part in the procedure, and the application is filed electronically through the USP portal with an ID Austria signature. Amendments to the articles after registration require a notarial deed.

GmbH or FlexCo

Since January 1, 2024, Austria has had a law on the flexible company (Flexible-Kapitalgesellschafts-Gesetz, FlexKapGG). According to the Ministry of Economic Affairs, it is the first new national company form in more than a hundred years. The FlexCo is built on the GmbH model and borrows some rules from the law on joint stock companies; where the special law is silent, the GmbH law applies. The same reform cut the minimum share capital of a GmbH from EUR 35,000 to EUR 10,000, and the same minimum applies to a FlexCo. The company name may use the designations Flexible Kapitalgesellschaft, FlexKapG, Flexible Company or FlexCo.

The key difference is employee shares (Unternehmenswert-Anteile). They carry no voting rights and together may not exceed 24.99% of the share capital. The form is designed for startups and venture investors: according to the ministry, 784 FlexCos were set up in its first year.

With one or two owners and no need for employee shares, a GmbH is usually enough. We consider a FlexCo for projects with an investment round ahead or an equity plan for the team. An industry review for product companies is in our article on the jurisdiction for SaaS.

Documents and KYC

The notary and the bank check the founders and managing directors (Geschäftsführer). We prepare passports, proof of address, an ownership chart, information on the planned business and documents on the origin of the funds that will go into the capital. For a corporate founder, an extract from its register and a resolution to set up a subsidiary are added.

Beneficial owners: the WiEReG register

Austrian companies disclose their beneficial owners in the Register der wirtschaftlichen Eigentümer under the WiEReG law, which is kept by the Ministry of Finance. The information is filed within four weeks after the first entry in a register (for a GmbH, the Firmenbuch). Once a year a GmbH reviews its beneficial ownership information and, within four weeks after the review date, reports changes or confirms the existing data. Some companies are exempt from filing if the information is already visible from the Firmenbuch.

How beneficial ownership disclosure works in other jurisdictions, and what banks see of it, is collected in our guide on beneficial owners (UBO).

Annual obligations and company taxes in Austria

• bookkeeping and annual financial statements of the GmbH;
• the return and advance payments of corporate income tax at 23%;
• VAT and payroll taxes, if the company has turnover in the EU and employees;
• the annual review of beneficial ownership information under the WiEReG.

A GmbH files its annual financial statements with the court that keeps the Firmenbuch no later than nine months after the balance sheet date (Bilanzstichtag), with an auditor’s report where required. The documents go into the register’s document collection (Urkundensammlung) and can be viewed at the court or online in the Firmenbuch database.

The standard VAT rate (Umsatzsteuer) is 20%. Preliminary VAT returns (UVA) are filed quarterly if the previous year’s turnover was no more than EUR 100,000, and monthly if it was higher. The small business scheme (Kleinunternehmerregelung) is available to a company with its place of business in the EU if turnover has not exceeded EUR 55,000 in either the previous or the current calendar year.

We arrange ongoing support with local accountants and tax advisors; the scope depends on turnover and the number of employees.

Trade licence and the gewerberechtlicher Geschäftsführer

For activities that require trade registration (Gewerbe), a GmbH appoints a gewerberechtlicher Geschäftsführer. This person is responsible for compliance with trade law and must meet the personal requirements for the activity. According to USP guidance, this is a member of the body that represents the company, or an employee with full social insurance working at least half of the normal working week. If the trade requires a certificate of qualification (Befähigungsnachweis), this managing director provides it. We find a candidate before the company is incorporated.

Bank account

The account for the share capital is opened before registration, and the bank checks the founders and the origin of the funds at this very step. The bank expects the company to have an economic link with Austria or the EU: contracts, an office, employees. We handle bank preparation as part of our bank account for the company service. How banks check a company with foreign owners is covered in our guide on a bank account for a non-resident’s company.

The owner’s taxes

If the owner lives outside Austria, profit distributions and the CFC rules of their country need to be taken into account in advance. If the company is in fact managed from another country, the question of the GmbH’s own tax residency may arise. We assess these risks before the documents are filed. The CFC rules of different countries are described in our guide on controlled foreign companies.

How much tax remains when profit is paid out

A GmbH’s profit is subject to corporate income tax at 23%. When dividends are paid out of a GmbH, the tax on investment income (Kapitalertragsteuer, KESt) of 27.5% is withheld; for an individual who is tax resident in Austria it is, as a general rule, final. Together this comes to about 44.2% of pre-tax profit: 23% at company level and 27.5% of the remaining 77%.

For a non-resident owner, the result depends on the double tax treaty between Austria and their country and on the tax their country charges on dividends. A treaty may reduce the withholding tax, and the tax withheld in Austria is often credited at home. That is why we calculate the tax estimate across the whole chain: the company, the payout, the owner’s country.

Austria, Estonia or Cyprus

If the team and clients are in the EU but outside Austria, we compare the GmbH with an Estonian OÜ and a company in Cyprus. In Estonia corporate income tax arises when profit is distributed, and in Cyprus a new version of the tax rules applies in 2026; both countries are covered in Estonia vs Cyprus. Austria is chosen when a business needs a warehouse, employees, partners or clients in Austria itself and the neighboring German-speaking countries.

For a trading model with deliveries within the EU, we also check VAT registrations in the buyers’ countries and the logistics; this scenario is described in our guide on the international trading company. If low tax matters more than presence, compare the GmbH with the options in our offshore vs onshore review.

Timelines and cost

The timeline depends on the method of incorporation (through a notary or simplified), the bank and how complete the documents are. The budget is made up of the capital, notarial and registration costs, accounting and tax support; we prepare a cost estimate after the questionnaire.

We calculate the cost estimate separately for the first and second years: capital, a notary or simplified incorporation, registration costs, trade registration, accounting and a tax advisor, annual financial statements in the Firmenbuch, UVA and tax returns, the minimum corporate income tax, the bank. For a fair comparison with the UK or Andorra, we take the same scope of work. In your request, describe the owners’ country of residence, the business, the clients and the expected payments.

Frequently asked questions