Austria Market Entry
- Market entry
- Forms and conditions of operation on the market
- Marketing and Communications
- Issues of intellectual property protection
- Public procurement market
- Payment terms, payment ethics and resolution of commercial disputes
- Visas, fees, specific conditions of travel to the territory
- Employment of citizens from the Czech Republic
- Fairs and events
In principle, the Austrian market can be entered either directly, i.e. by opening a branch in Austria, or indirectly, through a local sales representative – it always depends on the nature of the product or service that the Czech company intends to offer in Austria. For example, for items of a raw material nature (timber, coal, iron, steel), Czech companies can directly find customers, thereby shortening the purchasing journey and thus costs. For other products, local representatives are used in practice. A number of large Czech exporters also have their own channels or use their own representatives.
According to cheeroutdoor.com, an important place in business activity is occupied by exclusive importers who import goods from one or a few companies in the same field (this is how the sale of Škoda cars or Budvar beer works, for example). The Austrian consumer often prefers to buy from an Austrian importer, because he considers him a reliable guarantor of deadlines, quality and a partner who knows domestic customs well.
The Austrian Chamber of Commerce also has a trade section that brings together representatives, agents, importers and wholesalers. This section is called the Federal Board of Trade Agents (so-called Handelsagenten). The Federal Board of Commercial Agents operates the website Commercialagents.at, which was created in cooperation with the Central Association of German Trade Unions for Trade and Sales Intermediation (CDH eService GmbH) and the International Association of Commercial Agents (IUCAB). Currently, there are approximately 1,500 sales representatives in the register.
Austria is a member of the EU and must therefore fully respect the rules of the free movement of goods and the single internal market vis-à-vis EU member states. Customs issues fall under the jurisdiction of the Federal Ministry of Finance (Bundesministerim für Finanzen – BMF), or its subordinate branch of the Customs Administration (Zollverwaltung). More detailed information on customs issues can be found on the Ministry’s website by clicking on “Zoll”. As part of the reform of the Austrian financial administration, a new central customs office named “Zollamt Österreich” was created from the existing 9 customs offices.
Thus, EU customs law and the so-called Customs Code (Zollkodex) and implementing directives to the Customs Code (Zollkodex-Durchführungsverordnung) apply to Austria. However, the EU directives do not contain any organizational legal provisions and leave a certain space for national legislation, which in Austria is filled by the customs law (Zollrechts-Durchführungsgesetz abbreviated ZollR-DG No. 659/1994), which has been gradually amended and can be found at www.ris .bka.gv.at.
The EU Common Customs Tariff is applied to imports from all non-EU countries, unless preferential rates are used, for example for WTO members. In intra-EU trade, customs duties are not collected, but this only applies to goods intended for free distribution in EU countries, i.e. to goods not subject to Community transit procedures or to goods delivered on international customs documents (TIR carnet). A common harmonized system of description and numbering of goods (HS nomenclature) also applies in Austria. For agricultural products / e.g. grain, fruit and vegetables, beef, fats, etc./ 21 directives of the European Commission apply, where customs procedures are regulated in detail.
As in other EU countries, consumption taxes are imposed in Austria on gasoline, heavy fuels and other energy products, alcoholic beverages (beer, wine) and tobacco products. Goods subject to excise duty can be transported between EU member states a) within the framework of the regime with conditional exemption from excise duty within the EU (German: Steueraussetzung), or b) the goods are released for free circulation from the point of view of excise duty. Accompanying documentation, permits and formalities differ accordingly. More detailed information about both methods is available on the website of the Austrian Chamber of Commerce (WKO). Export control is applied primarily in the field of weapons and war material in the sense of the Act on the Export, Import and Transit of War Material No. 540/77 and its subsequent amendments (the so-called Kriegsmaterialgesetz), which can also be obtained at www.ris.bka.gv. and.
Forms and conditions of operation on the market
Czech companies can do business in Austria in the form of a dependent organizational component of a foreign company or an independent subsidiary. In the case of the intention to establish a legally independent subsidiary, a wide range of legal forms is offered.
A capital company is a legal entity with its own legal personality distinct from its owner, namely a limited liability company (GmbH) and a joint-stock company (AG).
The most common form of business for foreign investors in Austria is a limited liability company (Gesellschaft mit beschränkter Haftung, GmbH). The amount of the share capital must be min. EUR 35,000, of which half must be paid in cash. At least EUR 17,500 of the stated cash deposit must be paid immediately.
GmbH established from 01.03.2014 can use the so-called “Gründungsprivileg” (founder’s privilege) – although the share capital is EUR 35,000, it is possible to stipulate in the articles of association that the partners only have to pay a share capital of EUR 10,000 over a period of 10 years EUR (of which min. EUR 5000 in cash and immediately).
Selection of main trading companies:
- organizational component – Niederlassung
- limited liability company – Gesellschaft mit beschränkter Haftung, GmbH
- joint stock company – Aktiengesellschaft, AG
- public company – Offene Gesellschaft, OG
- limited partnership – Kommanditgesellschaft, KG
- silent society – Stille Gesellschaft, stGes
- registered profit-making company – Eingetragene Erwerbsgesellschaft, EEG
- association – Gesellschaft nach bürgerlichem Recht, GesbR
- cooperative (society) – Genossenschaft
The simplest way of doing business is the business of a natural person. It is run by a self-employed person – a natural person’s business does not have its own legal personality, different from a natural person. They guarantee unlimited business debts, i.e. with all his possessions. Business profit is subject to personal income tax.
Another option for doing business on the Austrian market is cooperation with specialized sales representatives who fall under the Austrian Chamber of Commerce (WKÖ, www.commercialagents.at ).
More detailed information on the legal aspects of starting a business in Austria can be obtained, for example, from the government investment agency Austrian Business Agency (ABA), www.aba.gv.at or the Wirtschaftskammer Österreich, www.gruenderservice.net. More information on how to start a business in Austria can be found here: Doing business in Austria 2020 – ABA.pdf (mzv.cz).
Marketing and communication
If we are talking about marketing, then it is worth reminding that the Austrian market is very developed and top global companies operate here. The high value of GDP per inhabitant exceeding EUR 44,000 ranks the Austrian economy among the ten richest in the world. Despite its relatively small size and population, it represents an interesting market with strong domestic purchasing power.
Products with a high added value find application in the demanding Austrian market, while still maintaining a competitive price advantage.
In principle, it can be stated that product promotion and advertising, as well as marketing preparation, carried out correctly and in an adequate volume for the local conditions, is a prerequisite for lasting success on the Austrian market, just as it is the case in all developed markets.
Advertising costs are generally high in Austria and of course higher than in the Czech Republic, especially in the most mass media such as television and print. This is also one of the reasons why little is heard about Czech products in Austria. Another reason is the fact that most of our businesses are not prepared and sometimes underestimate the importance of promotion and advertising on the Austrian market.
The company’s marketing materials must be prepared professionally and in perfect German. The same applies to websites for which it is appropriate to use an Austrian domain. Advertising campaigns on the most used Internet search engine Google and SEO optimization are also effective. In Austria, great emphasis is placed on credibility and interesting references.
Information about the relevant publications, publishers and advertising prices can be obtained directly from the Association of Austrian Newspaper Publishers – Verband Österreichischer Zeitungen, Wipplingerstr. 15, 1013 Wien, www.voez.at, tel.: +431/5337979-0, fax: +431/5337979422, e-mail: [email protected] The association publishes the Medienhandbuch catalog ( www.medienhandbuch.at ).
Information on television advertising can be obtained from ORF-Enterprise GmbH & Co. KG, Würzburggasse 30, 1136 Wien, www.enterprise.at, phone: +431/87077-15000, e-mail: [email protected]
Marketing communication should be precisely targeted at the target group and must be carried out in accordance with the GDPR regulation and the general rules applicable in the EU.
There are a large number of agencies operating on the Austrian market, see the list of PR agencies on the website of the Public Relations Verband Austria, https://prva.at or the list of HR agencies on the website of WKÖ , www.wko.at.
Issues of intellectual property protection
In Austria, intellectual property protection is implemented through the relevant intangible property legislation. The most important sub-areas of this legislation include:
- copyright (Urheberrecht)
- trademark (Markenrecht)
- inventions/patents (Patentrecht)
- utility model (Gebrauchsmusterrecht)
- designation of origin (Herkunftsangaben)
- industrial designs (Geschmacksmusterrecht)
The said legislation allows intellectual property to be defined and traded in, e.g. by granting licenses. In the field of industrial property, protected aspects are the brand name, visual appearance/design, technical structure or manufacturing process of the product.
The basis of Austrian patent law is the Patent Act (Patentgesetz), which regulates the protection of technical inventions. Austria is a signatory to a number of international conventions, incl. the Act Revision of the European Patent Convention (2000), the Patent Cooperation Treaty of 1970 (PCT) and the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights of 1994 (TRIPS). All protected designs, patents, brands, etc. can be registered at the Patent Office (Österreichisches Patentamt, www.patentamt.at ). All necessary information including instructions, forms and fees is available on the website of the Patent Office. If the product is to be used not only in Austria, then it makes sense to protect the invention internationally as well. This step must be taken within one year of registration in Austria.
In contrast, copyright is an aspect of intellectual property that requires no registration – it exists automatically without any registration or cost. The key legal basis for intellectual property and its judicial enforceability is the Copyright Act (Urheberrechtsgesetz).
In the event of a dispute, it is necessary to contact the Commercial Court in Vienna (Handelsgericht Wien) or to the civil district court. The OEU is not aware of any case of damage to the rights of Czech entities in this area in Austria.
Public procurement market
In Austria, public contracts account for a financial volume of approx. EUR 45 billion (14% of GDP) per year. Depending on the applicable limit values, Austrian public contracting authorities are obliged to officially notify their contracts on the basis of the Public Procurement Act (Bundesvergabegesetz, BVerG 2018). EU public procurement directives were implemented into national legislation in 2018 with a delay.
On the basis of the 2018 amendment of the BVerG Act and the reform package, the Austrian public authorities strive to effectively stimulate innovation in their purchasing activities and at the same time undertake to meet the requirements of sustainability. Last but not least, the relevant legislation is intended to facilitate access to public procurement and for small and medium-sized enterprises. The principle of the best offer (Bestbieterprinzip) had already been introduced, according to which the price should not be the only decision criterion in the public procurement process – social and qualitative criteria should also be taken into account, especially in terms of transparency and sustainability. One of the objectives of the BVerG is for the contracting authority to have a complete overview of the cooperation of the various subcontractors and to prevent wage dumping. The contracting authority may stipulate that certain significant parts of the contract be carried out by the general contractor, or a member of a group of bidders, and not a subcontractor. Austrian legislation, however, does not establish any ratio of price and other criteria in percentages within the framework of public contracts.
On January 1, 2022, new, slightly increased financial limits for public procurement entered into force in EU member states. The upper financial limit, which determines EU-wide disclosure, is now €215,000 for supply and service contracts, €431,000 for sectoral contracting authorities (i.e. selected infrastructure providers), €140,000 for central contracting authorities and €5,382 000 EUR for building contracts and building concessions. The stated financial limits always apply to the total value of the contract and apply both to state contracts and to contracts of federal states or cities and municipalities. Negotiation proceedings (Verhandlungsverfahren) are considered only in exceptional cases. The reasons that are decisive for the implementation of the negotiation procedure must be documented in writing. All amounts are shown without VAT.
The following provisions apply to public contracts with a sub-threshold amount: Direct awarding (so-called Direktvergabe) of contracts is possible until 31 December 2022 for supply and service contracts and construction contracts up to an estimated value of EUR 100,000, based on the extension of the Austrian Regulation on Financial Limits. Negotiations without publication are possible for contracts for supplies and services up to an estimated value of EUR 100,000, and for construction contracts, negotiations without publication are admissible up to an estimated value of EUR 1,000,000. At the same time, it is necessary to obtain at least three price offers and to a sufficient extent also take into account small and medium-sized enterprises, or regional companies. Contracting authorities may award contracts for mental services (so-called geistige Dienstleistungen) in the form of a negotiation procedure without publication, with the participation of only one participant, if conducting a competition based on the costs associated with the procurement process is not acceptable for the contracting authority for economic reasons and the estimated value of the contract does not reach 50% of the relevant financial limit (the financial limit is EUR 215,000, i.e. EUR 107,500). At the same time, it is necessary to obtain at least three price offers and rotate the invited participants as often as possible. If possible, small and medium-sized enterprises should also be taken into account. If the above-mentioned financial limit is exceeded, an EU-wide open procedure is required. In exceptional cases, it is possible to conduct negotiations with publication. Under-threshold public contracts tendered by the Austrian authorities must be published in the official gazette (Amtlicher Lieferanzeiger) of the Wiener Zeitung media group (www.auftrag.at ). Above-threshold public contracts must be published through the Office for Official Publications in Luxembourg ( https://op.europa.eu/cs/web/about-us/procurement ) before being published in Austria.
- https://ted.europa.eu (TED Tenders Electronic Daily)
- https://www.bundesheer.at/ausschreibungen/menu_sach.ph – Austrian Army (Bundesheer, Federal Ministry of Defense/BMLV)
Public contracts issued by the federal states:
- Vienna: https://www.wien.gv.at/Vergabeportal/list
- Upper Austria https://www.land-oberoesterreich.gv.at/beschaffungsausschreibungen.htm
- Lower Austria https://www.noe.gv.at/noe/Ausschreibungen-Liegenschaften/Ausschreibungen-Liegenschaften.html
The tender procedures of the state infrastructure companies ASFiNAG (Society for the Financing of Autobahns and Expressways) and ÖBB (Austrian Federal Railways) are published on the ProVia digital platform. Registration is required to provide services: https://www.provia.at/.
Payment terms, payment ethics and resolution of commercial disputes
The basic verification of a business partner can be carried out via the Austrian commercial register (Firmenbuch) and, in the case of self-employed persons, via the information system of the business enterprise GISA ( www.gisa.gv.at ). Extracts from the commercial register can be obtained through the Commercial Court in Vienna or through the official clearinghouses, https://verrechnungsstellen.at. All legal entities based in Austria are registered in the commercial register, incl. branches of foreign companies.
The association Kreditschutzverband 1870 (KSV 1870, www.ksv.at ) offers, in addition to information on the creditworthiness of Austrian companies, collection services in the form of out-of-court enforcement or representation of creditors in insolvency proceedings. KSV 1870 also has a register of defaulters.
Information about companies incl. a finding of possible insolvency can be obtained free of charge through the OEU Vienna and on the website of the Federal Ministry of Justice https://edikte.justiz.gv.at. In the international context, the payment morale of Austrian companies is relatively good, in 2021 the average maturity of invoices in the case of companies reached 24 days, which means that there was no change compared to 2021. The number of corporate insolvencies also remained at the previous year’s level with 3,034 cases. However, around 40% of all corporate insolvencies took place in the last quarter of 2021, which means a return to the pre-pandemic level (2019: 5018 cases).
Visas, fees, specific conditions for traveling to the territory
A citizen of the Czech Republic may enter and reside in Austria without special restrictions, and only on the basis of a valid passport or identity card.
It is essential that each child traveling with a parent is equipped with their own passport or identity card.
As in other EU countries, citizens of the Czech Republic have the right to free movement in Austria, based on Article 18 of the EC Treaty.
During the Covid-19 pandemic, hygienic and epidemiological measures and restrictions on movement on the territory of Austria must be respected. Current information is available on the website of the Embassy of the Czech Republic in Vienna www.mzv.cz/vienna.
Austria has long been one of the countries with a low crime rate. Nevertheless, it is recommended to exercise caution, especially in places with a higher concentration of people. In case of theft of a travel document or identity card, it is necessary to report the matter to the local police, who will issue a report on the theft of the document to the stolen person, and also to the authority in the Czech Republic that issued the document, or to the embassy, in order to prevent the misuse of this document. It is also advisable to report the loss to the nearest Austrian lost and found office (more information, e.g. at www.wien.gv.at/verwaltung/fundservice ).
Transportation by personal vehicle
Before traveling by car, it is recommended to take out accident insurance, or additional vehicle insurance. Drivers must be equipped with a so-called green card.
When staying in Austria, it is necessary to respect Austrian laws. This also applies to violations of traffic regulations. Since the end of 2016, on the basis of Directive (EU) 2015/413 of the European Parliament and of the Council of 11 March 2015, cooperation between the Czech Republic and Austria in the area of vehicle registration data exchange, which facilitates the determination of the identity of persons suspected of committing traffic offenses such as speeding speed limit or driving under the influence of alcohol. A fine for violating traffic regulations can be sent by the relevant Austrian authority directly to the Czech Republic to the address of the person who is registered as the owner of the vehicle with which the offense was committed. In case of committing a traffic offense and the driver is stopped by the Austrian police, the assessed fine must be paid on the spot. If the driver does not have enough funds to pay the assessed fine on the spot, any valuable object can be seized (e.g. removed car radio, etc.). In case of non-payment of the fine, it cannot be ruled out that it will be enforced by legal means in the Czech Republic as well.
The motor vehicle must be equipped with a reflective vest for each person traveling in the motor vehicle in case of breakdown or accident and subsequent exit from the vehicle. In Austria, winter tires are mandatory from 1 November to 15 April for all types of vehicles.
The maximum permitted speed (if no other limit is specified by the sign in the given place) of cars and motorcycles: 130 km/h on the highway, 100 km/h on other roads outside the municipality, in closed municipalities 50 km/h for all types of vehicles. Fines are imposed for speeding, and the driver’s license may be revoked.
In Austria, the technical condition of the vehicle is rigorously checked. In the event that a technical defect of the vehicle is discovered during a spot check, the Austrian police is entitled to impose a fine, or insist on the removal of the defect on the territory of Austria and impound the vehicle until it is removed.
In the event of serious damage, injuries, etc., arising in connection with a traffic accident, it is necessary to call the police. In the event of an accident or vehicle breakdown, contact the Austrian OAMTC (Der Österreichische Automobil-, Motorrad- und Touring Club) or the ARBÖ association (Der Auto-, Motor- und Radfahrerbund Österreichs). More detailed motoring information can be obtained from the website of the OAMTC ( www.oamtc.at ) and ARBÖ ( www.arboe.at ) associations.
Austrian public transport is of a high standard and works reliably. There is a subway in Vienna. Vienna Schwechat International Airport is connected to the city center by an expressway, from which it is possible to transfer to the subway. Car rental in larger cities is possible.
Acute medical care is provided to citizens of the Czech Republic on the basis of the European Health Insurance Card. Some healthcare facilities in Austria do not belong to the public healthcare system and do not recognize this card. This applies mainly to mountainous areas. Mountain service and air transport from the slopes or alpine areas are not covered by public health insurance, so it is recommended to take out separate insurance.
In high-mountain areas, it is important not to underestimate the difficulty of the terrain and climatic conditions, not to forget additional insurance for high-altitude tourism and special additional insurance for sports.
Hotels and other accommodation facilities are of a very good standard, water from public networks is potable in most areas. Payment by credit card is possible in most shops, restaurants and accommodation facilities, as well as at gas stations.
Employment of citizens from the Czech Republic
Free movement of employees (the right of an employee from the Czech Republic to perform a dependent activity in Austria and to be employed by an Austrian company) has been unlimited since May 1, 2011. The same conditions apply to Czech applicants for work in Austria as to applicants from Austria.
A Czech employee who is employed by an Austrian employer is liable for income tax in Austria. All formal requirements, i.e. salary, health and social insurance and payroll tax deductions are handled by the Austrian employer. However, the Austrian employer does not handle the annual tax settlement, the so-called “Arbeitnehmerveranlagung”. After the end of the relevant calendar year, the employee can (but does not have to) apply for this himself at the locally relevant Austrian tax office. The application can also be submitted retroactively up to 5 years. If the employee performs work for several Austrian employers at the same time and has a total annual income of over 11 thousand EUR, is obliged to submit a tax return by September 30 of the following year. This also applies if, in addition to employment, the employee has other income exceeding the non-taxable amount (2022:
The minimum wage is not legislated in Austria, but in many fields it is governed by collective agreements, see www.kollektivvertrag.at.
Austrian social insurance includes health insurance, accident insurance (against accidents at work and occupational diseases), pension insurance and unemployment insurance. In the usual case, the total amount of social insurance contributions in Austria in 2022 amounts to 39.25% of the employee’s monthly gross salary (employee’s share: 18.12%, employer’s share: 21.13%).
Posting of workers
A Czech entrepreneur who wants to send his employees to Austria is subject to a formal reporting obligation to the Financial Police (reporting on the posting of ZKO) and must meet other requirements according to the Law on Combating Wage and Social Dumping (LSD-BG). Furthermore, in the case of a tied trade (e.g. construction work, assembly activities), they must submit a service provision notification (so-called Dienstleistungsanzeige) to the Austrian Ministry for Digitalization and Business Environment (BMDW) in advance.
Based on the LSD-BG, the Czech company must comply with Austrian wage and social regulations, i.e. payment of the basic minimum wage and any other payments or surcharges in the aliquot amount according to the relevant Austrian collective agreement. It is necessary to have all employment and salary documents available at the place of work, including a translation into NJ or AJ. Timely completion of documentation after inspection does not mean impunity, but only prevents the imposition of further sanctions. In September 2021, an amendment to the LSD-BG Act entered into force, which, based on ECJ rulings, removed the principle of cumulation within the framework of administrative criminal proceedings. However, the Austrian authorities still have the possibility to impose fines for violations of the LSD-BG regulations, the amount of which can be liquidating for SMEs.
Transporters of people and goods must also meet the stated requirements, with the provision that their mobile workers/drivers can use flat-rate reporting for a period of 6 months. In addition, mobile workers can submit the majority of mandatory documentation in electronic form in the event of an inspection.
Cooperation of several self-employed persons
According to the Austrian authorities, the collaboration of several self-employed persons within the same contract and on the basis of work contracts is not permissible – it can lead to suspicion of circumvention of the LSD-BG Act and the reassessment of self-employed persons as employees, which results in the initiation of administrative criminal proceedings and high fines.
Based on the EU Services Directive implemented in Austria, it is made easier for businesses to provide services within the EU by allowing all important official procedures to be carried out online. The relevant EAP single points of contact are available at www.eap.gv.at.
Fairs and events
Around 300 fairs and exhibitions are held in Austria every year. The capital cities of all federal states have their own fairgrounds. The exception is the federal state of Vorarlberg, where instead of the capital city of Bregenz, the exhibition center is in nearby Dornbirn. However, some important fair events are also held outside the capitals of the federal states, e.g. in Wels and in Ried im Innkreis in the federal state of Upper Austria or in Wieselburg in Lower Austria.
The number of cities where international fairs and exhibitions are held in Austria is 21, and almost 40 other cities host regional exhibitions, sales shows and markets. Basically, every exhibition center has its own information website, or information about fairs can be found on the websites or information materials of the respective country or municipality.
The website www.auma.de provides the most comprehensive overview of exhibitions and fairs in Austria.
The largest trade fair administration is the Viennese “Messe Wien” (“Reed Exhibitions”), which also includes the exhibition center in Salzburg. More information about trade fairs organized by Messe Wien can be found at www.messe.at. It should be noted that the Viennese fairs and exhibitions have the most international character in Austria. The so-called Herbstmessen, which have a very long tradition in Austria with high attendance, are very popular. Gradually, from these national or provincial, or regional exhibitions become international. It is probably most striking at the exhibition centers in the towns of Wels ( www.messe-wels.at ) and Ried im Innkreis ( www.riedermesse.at ).
Before deciding to participate in the fair in Austria, we recommend contacting the Vienna branch of the PaulTrade agency or the Trade and Economic Section of the Embassy of the Czech Republic in Austria.
The most interesting exhibitions and fairs in Austria in 2022:
- Intertool (engineering): May, Wels
- Alles für den Gast (HORECA): November, Salzburg
- Renexpo Interhydro (hydropower): November, Salzburg
- Bauen und Wohnen (Construction): November, Vienna