Cities of Innovation: Vienna
Key indicators
ICT Infrastructure
Average broadband speed (Mbps)
Network coverage
Local, national and international transport links
Non-stop flights destinations
Passengers 2018 (Vienna international airport)
— Good train connections nationally and on European level — Road connections to Bratislava, Budapest, Prague and Munich
University links and access to talent
QS Best Student City ranking
QS World University ranking (University of Vienna)
— 20 higher education institutions and 194,000 students in Vienna — Key employment sector is financial services — 25% of the workforce has tertiary education
Costs and availability of workspace
Average prime office rent
Co-working spaces
— Average office rent m2/month · Inner district: €13.50-€16.50 · Peripheral locations: €10-€13.50 — 5.1% vacancy rate
City support for start-ups and SMEs
Vienna business agency services
Events
Vienna business agency offers: — 15 consulting workshops — 88 events and meet-ups — 1 Expat-Center to help with business location in Vienna — Women Enterprise Service
Financial support and access to investors & accelerators
Grants and funding initiatives
Accelerators
— WeXelerate — The Venturz — inits — WU Gründungszentrum — i2c TU Wien — Impact Hub
Additional information
University links and access to talent
The University of Vienna is the city’s main university. Most universities have their own centre to inform students about entrepreneurship and there is also a yearly event organised by students, integrating four major universities in Vienna, called Entrepreneurship Avenue.
City support for start-ups and SMEs
Vienna business agency offers the Vienna start-up package, along with Start-up offices and an Expat-Center to help with business location. There is also specialised support for women at the Women Enterprise Service.
Innovation centres include:
— Media Quarter Marx
— Standpunkt Florisdorf
— Standpunkt Liesing
— Vienna Biocenter
— Vienna Innovation Area
Financial support and access to investors & accelerators
There are grants and funding initiatives available from the Vienna business agency, including:
— Internationalization focus
– funding rate: 50%;maximum funding amount: €50,000; minimum project value: €20,000; maximum project duration: two years.
— Material Assets Innovative investments – funding rate: 35%; maximum funding amount: €150,000 per project; minimum project value: small companies €15,000, other companies €100,000; women’s bonus: €5,000; maximum project duration: two years.
— Location Initiative – funding rate: small companies 20%, medium-sized and large companies 10%; maximum funding amount: small and medium sized companies €500,000, large companies €200,000.
More information about funding is available at Vienna Business Agency.
Accelerators
WeXelerate, The Venturz, inits, WU Gründungszentrum, i2c TU Wien, Impact Hub
How to set up a business: a quickfire guide
What are my options?
The typical and most common legal form for Austrian start-ups and SMEs is the limited liability company (Gesellschaft mit beschränkter Haftung; or “LLC”).
LLCs must have a minimum share capital of €35,000, with 50% (i.e. at least €7,500) being paid-in upon formation. The paid-in share capital must generally not be repaid to the shareholders, but can be used by the LLC for operational purposes.
Founders may make use of the so-called “foundation privilege” and establish the LLC with a “foundation capital” of €10.000, of which €5.000 must be paid-in in cash upon formation. The foundation privilege is valid for 10 years after foundation. After expiry of this period, the LLC’s share capital must then meet the requirements mentioned above. Many start-ups make use of the foundation privilege to save cash when setting up the company.
What do I need to set up a company?
The set-up of an LLC requires the following steps: (i) execution of the Articles of Association in the form of an Austrian notarial deed; (ii) opening of a bank account; (iii) appointment of the managing directors; (iv) payment of the share capital and issuance of a bank confirmation that the share capital has been paid in; and (v) a filing with the commercial registry regarding the formation, including specimen signatures of the managing directors. Upon registration with the Austrian commercial registry, the LLC is established. Registration takes between two to three weeks from submission of a complete filing. In that respect, we note that Austrian banks conduct a thorough know- your-customer (KYC) check before they open a bank account. This should be factored into the timing considerations.
The same set of rules apply to foreign entrepreneurs when it comes to the foundation of an LLC. Practice has shown, however, that logistics as well as the opening of a bank account are sometimes practical bottlenecks for foreign founders. Further, licensing and trade law requirements may impose conditions on foreign founders.
How much does it cost?
The cost and timing for establishing an LLC depend mainly on the complexity of the intended corporate governance rules and the number of shareholders. Legal fees range between €4.000 and €8,000 (net). Special legal packages are available for start-up founders. Founders must budget an additional €1,500 net for court and notary fees.
Tax rates
The applicable corporate income tax rate for LLCs is 25%. Capital gains (dividends and proceeds from a sale of the LLC) will generally be taxed at a rate of 27.5%. Exemptions and double-taxation issues should be considered.
After foundation of the LLC, further steps may need to be taken (where applicable), such as: (i) tax registration and a request for issuance of a tax identification code/tax number/VAT number; (ii) registration of the business and appointment of a manager under trade law (gewerberechtlicher Geschäftsführer) with the trade authority; and (iii) registration of the Austrian LLC with the Austrian Ultimate Beneficial Owner Register.
In Austria, LLCs are subject to very strict capital maintenance rules that essentially limit payments by the LLC to its shareholders to dividends and arm’s length transactions (the consequences of a violation are that transactions are null and void, at least partly; and there could be claw-back risk, liability of management and tax liabilities).
The transfer of shares in an LLC (for example in the course of an investment or exit, including call-and-put options) requires the drawing up of a share transfer agreement in the form of an Austrian notarial deed.
Legal contact
Thomas Kulnigg
Schoenherr
A-1010 Vienna, Schottenring 19
