Austria Investor Visas
The Republic of Austria offers one of the highest living standards in the world. Although one of the smaller states of Europe, it has a world-class capital, Vienna, with a rich cultural and historic heritage. But Austria also boasts beautiful countryside with Alpine peaks and spectacular scenery. It is an excellent place to establish residence within the European Union and is the only EU country besides Slovakia with an established practice of offering citizenship and a passport to substantial investors without prior residence requirements on the basis of investment in the country.
Austria is one of the most attractive countries in the world to live in. An ideal combination of economic stability, a clean and safe environment and an excellent infrastructure make it an outstanding place of residence. For persons of independent means as well as those who can qualify under the "Key Manager" category, Austria offers the opportunity to become resident in a Schengen Area member country with minimal bureaucratic requirements.
An Austrian residence permit allows you to travel to all Schengen states without the need for a visa. A residence permit is initially issued for one year and can then be renewed annually without problems or interruptions. After 10 years of legal residence, and in certain circumstances after seven years, it is possible to apply for Austrian citizenship.
Key Advantages of Austria
- Opportunity to establish residence as a person of independent means
- Austrian residence permit gives visa-free access to all Schengen States
- There is no need to spend any particular time actually residing in Austria
- Citizenship may be available after 10 years of residence
- Citizenship-by-investment possible without prior residence for substantial investors
- Attractive lifestyle and healthy environment
- Excellent transport and communications
Residence for Persons of Independent Means
Under the category of persons of independent means, the key criteria are that you have sufficient funds (you must be able to show liquid assets at your disposal of about EUR 40,000 per adult and EUR 10,000 per child below 18 years. These assets you should show in the form of a statement of account from an Austrian or major international bank), permanent accommodation in Austria, and health insurance that provides full coverage in Austria.
A spouse and children under 18 years can be included in an application. Due to a strictly applied quota system, the processing time for applications under this category can, however, be lengthy.
Residence and Work Permit as a Key Manager
Under the category of 'Key Manager', the main criteria are that you have been appointed as a manager of an Austria-based company and are employed at a minimum salary of EUR 2,500 per month. This corresponds to approx. EUR 800 per month in costs for taxes and social security contributions.
A spouse and children under 18 years can be included in an application. The processing time for applications under this category is normally not more than about 3 months.
For both categories, the residence permits can easily be renewed every year.
Citizenship in Austria
Background and Legal Considerations
Several countries have adopted provisions that allow the acquisition of citizenship on the basis of an investment and/or a direct contribution to the state as a means of development of the country. In Austria, Art. 10 (6) of the Austrian Citizenship Act states that the government can reward foreign persons with citizenship in the event of extraordinary merit. This may take various forms, including economic ones, and can include investment or other economic benefit brought to Austria. However, citizenship is not granted on the basis of investment alone. The foreign investor must make an extraordinary contribution alongside his investment, such as bringing new technologies to the country or creating a substantial number of new jobs.
Under the citizenship-by-investment provisions, an applicant is required to invest actively in the Austrian economy, for example in the form of a joint venture or direct investment in a business that creates jobs or generates new export sales. Significant direct investment is generally required. Passive investments in government bonds, real estate, etc. do not qualify.
In addition to standard documentary requirements (passports, birth and marriage certificates, etc.), a completely clean personal record (certificate of no criminal record), a comprehensive CV and business background information, as well as impeccable references, must be provided by all applicants.
The Austrian Citizenship Act generally requires the applicant to abandon his current citizenship as a precondition for being granted Austrian citizenship. However, in the case of a grant of citizenship under the provisions of Art. 10 (6) of the Citizenship Act, the former citizenship can be legally maintained, i.e. the applicant is not required to give up his present citizenship.
The grant of citizenship on the basis of an investment involves various procedures and requires Government approval at several levels. It is, therefore, essential that the applicant is properly advised from the beginning, that each individual case is carefully prepared and that informal approvals from the key ministries are obtained before the investment is made and the formal application process is started.
Haskew Law advises on suitable investment opportunities, liaises with the various government agencies and ministries, and finally prepares and lodges your application with the Government. As with other citizenship programs, the procedure involves a thorough background check, and applicants are normally required to attend an interview in Austria. Citizenship documents are issued after the citizenship application has been approved.
The average time frame for an application is 24 - 36 months. Successful applicants receive full citizenship of the Republic of Austria by the decision of the Government of Austria and can apply for a passport immediately afterwards. Passports are issued within a few days.
The grant of citizenship is not published and not reported to any other country, as it falls within the Government provisions relating to privacy/official secrets.
As a citizen of Austria, you can live and work in the country as well as anywhere in the European Union at any time. In addition, as an EU citizen, you also have the right to live in Switzerland, which is a very attractive place for tax-advantaged residence.
Unless you decide to actually reside in Austria, you are not subject to tax in Austria.
The Austrian passport enjoys an excellent reputation and offers very comprehensive visa-free travel, including visa-free access to the USA. The Austrian passport is without a doubt among the very best travel documents in the world.
When you acquire citizenship under the Austrian Citizenship Act, you and your family enjoy full citizenship for life, which can be passed on to future generations by descent.
The granting of citizenship is at the sole discretion of the Government of the Republic of Austria and we are unable to guarantee that applications will be approved. However, great care has been taken to provide the best possible safeguards for persons entering the program. Prior to taking on any mandate, a written agreement is made between the applicant and Haskew Law defining the responsibilities of both parties.
Key advantages of Austrian citizenship
- Opportunity to become an EU citizen upon making a substantial investment
- Austrian passport gives visa-free access to most countries worldwide
- Austrian passport gives the right to reside anywhere in the EU as well as in Switzerland
- There is no need to spend any particular time actually residing in Austria
- There are no tax consequences unless your main (tax) residence is moved to Austria
Trusts & Company Formations in Austria
Here we explore how to establish a trust (Private Foundation) or a Company in Austria. We start by exploring trusts.
Two decades ago, the Austrian government wanted to provide an excellent instrument which could support the preservation and the accumulation of wealth for the benefit of a family. Subsequently, the Austrian Private Foundation Act was enacted on the first of September 1993 and made it possible to establish a foundation in Austria for private purposes only.
The Private Foundation Act creates excellent investment opportunities for high-net-worth individuals from both Austria and abroad. An Austrian private foundation is an excellent instrument to structure large family estates and is internationally recognised. An additional benefit is that the Austrian private foundation is not subject to any kind of state supervision, as opposed to foundations established under the Federal Foundations Act or the Investment Fund Act.
The Austrian private foundation is a separate legal person but has no shares and no shareholders (as opposed to a company for example). An Austrian private foundation comes into existence when the founder endows assets to the foundation and when he has drafted the charter of the foundation. The legal basis of transferring assets to a foundation is the notarial deed and this kind of transfer is considered to be a gift. The minimum amount to be endowed to the foundation is EUR 70,000, either in cash or in kind (shares, options or real estate for example).
The founder can establish an Austrian private foundation on an irrevocable or revocable basis. However, the right to revoke an Austrian private foundation in the future is exclusively granted to individuals and not to other types of founders such as a company or trust.
The charter of the Austrian private foundation is a public document and addresses general topics such as the name of the foundation, its seat, whether it is a revocable or irrevocable foundation, and whether the founder has foreseen the possibility to amend the charter of the foundation in the future or not.
The non-public by-laws include important details such as the names of the beneficiaries, specification of the amounts to be paid to the beneficiaries, an overview of the total amount of assets endowed to the foundation, etc.
The founder can remove a beneficiary and if such a provision was made in the charter of the foundation, he can nominate additional or new beneficiaries whenever he likes to do so. The founder has to include the details of the ultimate beneficiary(ies) in the non-public by-laws. If such an ultimate beneficiary is not included by the founder then the Austrian State will benefit from the proceeds and assets held by the foundation.
An Austrian private foundation has to be managed by a board of directors. This board of directors has to consist of at least three individuals. Two of them have to be a resident in the EU/EEA and their nationality does not matter.
The Austrian foundation’s annual accounts have to be audited by a Certified Public Accountant every year.
The founder and the members of his family are excluded from being members of the board of directors when they want to be beneficiaries of the foundation. That’s why the founder can decide to implement an advisory board. As such, the founder and his family can give guidelines to the directors and have an influence on the daily management of the foundation.
The main purpose of an Austrian private foundation is to preserve and create wealth for the benefit of a family or any other individual or legal person. Therefore the Austrian private foundation may not engage in a business or trade directly in order to reduce the risk of going bankrupt. The Austrian private foundation can only be a shareholder of a domestic or foreign company with limited liability or can be a limited partner in a domestic or foreign limited partnership.
The Austrian private foundation is accompanied by supporting tax legislation and tax benefits serving the needs of a modern family.
Establishment of the Austrian private foundation
A minimum of EUR 70,000 has to be endowed to the foundation, either in cash or in kind. The net asset value received by the foundation is exposed to a one-time tax of 2.5%.
Income from the Austrian private foundation.
A standard income tax rate of 25% applies but many tax exemptions are available. For example, domestic dividend income is completely tax exempt in the hands of the foundation. Foreign source dividend income is also not taxed in the hands of the Austrian foundation provided that the foundation holds at least 10 % of the shares of the foreign corporation for a period of at least one year. Dividends originating from EU/EEA countries tax-exempt irrespective of the percentage of shareholding and holding period.
Distributions paid to beneficiaries
Depending on the country of residence of the beneficiaries and the applicable double taxation avoidance agreement between Austria and that country, a withholding tax between 0 and 25% will be levied.
Do not hesitate to contact us if you would like to receive more information about the Austrian Foundation.
Incorporating in Austria
1) Select the company name for your GmbH
First, select a name for your corporation.
- The name of the company must end with GmbH to denote limited liability
- A company name check can be carried out free of charge to see if a required name has already been registered.
- We can then reserve your GmbH name for up to ten days.
- You are not allowed to use a name which is either identical or deceptively similar to one that is already used by another corporation.
2) Share Capital
Select the number of shares each shareholder will have.
- The minimum share capital of a GmbH is €35,000
- Only €17,500 of the total share capital must be paid up before registration.
- There are no share certificates in an Austrian company.
- Valid transfer of the ownership of shares is only possible by means of an assignment before a notary.
3) Select Directors
Decide who will be the directors of your company.
- Directors may be of any nationality and may reside anywhere.
- Only one director is required. Although there may be several.
- Directors can be residents or non-resident.
4) Select Shareholders
Select who will be the shareholders of your company.
- Shareholders may be of any nationality and may reside anywhere
- Only one shareholder is required. This can be the same person as the director.
- Shareholders can be residents or non-resident
- Corporate shareholders are allowed.
5) Select a Registered Office
An Austrian registered office address is required for your company.
Features of an Austrian GmbH
- An Austrian company is legally exempt from dividends tax received from a foreign subsidiary. Austria levies no withholding tax on dividends paid to the foreign parent.
- As a member of the European Union (EU), Austria is governed by the provisions of the EU's Parent-Subsidiary directive. Thus, an Austrian holding company which holds at least 25% of the shares of an EU subsidiary can receive dividends from the subsidiary free of withholding tax.
- An Austrian company can access a large network of double taxation treaties Austria has signed with major trading nations around the world.
- A minimum of one director and one shareholder is required for Austria company formation. The shareholder and director can be the same person, and need not be resident in Austria. Corporate shareholders are permitted with Austria company formation.
- It is easy to open global corporate bank accounts to support your Austrian company formation.
- Austria is regarded as one the world’s most competitive economy. It has excellent business advantages including its economic performance, government efficiency, business efficiency and infrastructure.
- A GmbH pays corporate profits tax of 25% on all income. In addition, financial statements must be submitted to the Austrian Chamber of Commerce.
- An Austrian company formation requires a minimum share capital of €35,000, of which at least half, €17,500, must be paid up in cash.
- A register containing directors and shareholders details is available for public viewing.
More About Austria
Austria, with its well-developed economy and high standard of living, is closely tied to other EU economies. The services sector forms some two-thirds of the Gross Domestic Product of 232 billion Euros. Trade and industry make up about a third of the GDP, agriculture contributes some 2 %. With an average per capita GDP of about Euro 27,000, Austria ranks among the European Communities richest countries.
Energy – Grist to Industry's Mills
About one-third of Austria's energy consumption is covered by the national energy industry. Up to 70% of the energy comes from renewable sources such as water. Industry, which still is considered to be the national growth engine is made up of mainly small and medium-sized enterprises. Austria's industrial sector is, however, one of the world's largest: between 1995 and 2003 industrial production increased nominally by 28% to a total volume of 90.9 billion Euros. With 11.4 billion Euros in 2003, mechanical and steel industry were the greatest contributors to Austria's total output, followed by chemical industry (10.6 billion Euros) and the electrical and electronics industry (10.2 billion).
A First-Class Services Sector
The services industry is Austria's fastest growing industrial sector. About one-sixth of Austria's three million wages and salary workforce is employed in the trade and industry sector, which contributes some 13% to the GDP. Tourism is the country's biggest foreign exchange earner and the fastest growing sector: 220,000 people in 40,000 tourist establishments generate 10% of Austria's economic output. In 2012, Austria lodged some 131 million guests.
Europe's Deli Shop
7.5 million hectares of land is used for agriculture with cattle farming contributing 30% to the agricultural value-added business. Austria boasts an incredible 18,500 organic farms adding to the country's reputation as Europe's deli shop. 47 % of Austria is forested. Besides water, wood plays an increasingly important role as a renewable source of energy.
Exports: Wine & More
Among the insiders of the wine business, and despite being only a small wine growing country, Austria has gained an excellent reputation for producing some top-scoring wines. About 32,000 wineries produce an average of 2.5 million hectoliters of wine per year. Austrian wines are produced mostly from Riesling and Gruener Veltliner grapes but Sauvignon Blanc grapes are also used. It’s the whites, that get most of the attention, but the reds are also excellent.
Export is regarded as vital to Austrian economy. Main export commodities are machinery and equipment, motor vehicles and parts, paper and paperboard, metal goods, chemicals, iron and steel; textiles, foodstuff. Austria's top-ten export commodities make up two-thirds of the entire export volume. Most exports go to other EC countries (mainly Germany), about 15% go overseas.
With an area of 83.858 sq km Austria consists of 9 independent federal provinces (Burgenland, Carinthia, Lower Austria, Upper Austria, Salzburg, Styria, Tirol, Vorarlberg and Vienna) with their own provincial governments.
A little Background On Austria
It is bordered by the Czech Republic and Germany to the north, Hungary and Slovakia to the east, Slovenia and Italy to the south, Switzerland to the south and Liechtenstein to the west.
The federal legislation is exercised by the national council (Nationalrat) together with the Upper House of Parliament (Bundesrat) – the two chambers of Parliament.
Austria is a member of the European Union, the United Nations as well as most UN organizations.
Of the approximately 8,8 million inhabitants of Austria, 98% speak German. The six ethnic groups officially recognized in Austria (Burgenland Croatians, Roma, Slovaks, Slovenians, Czechs and Hungarians) are concentrated in the east and south of the country.
Approximately 74 % of Austrians are Roman Catholic, 5 % are Protestant and the rest belongs to other faiths.
Booking a Consultation
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At Haskew Law, our team are highly acclaimed as ready to manage even the most complex of cases. Our thesis, however, is to keep things as simple as possible. We believe it is important our clients are comfortable and remain in control of their international plans throughout the process. We endeavour to protect our clients best interests while delivering outstanding results.
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