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Austria has traditionally attracted a significant amount of FDI owing to its geographical location as an intersection of Eastern and Western Europe. According to UNCTAD's 2022 World Investment Report, FDI in Austria returned positive in 2021, at USD 5.8 billion, after a negative flow of USD 15 billion one year earlier. FDI stock reached USD 198.3 billion in the same year.
Germany, Russia, and Switzerland account for more than half of Austria's FDI stock. The U.S., Italy, the Netherlands and the UAE are other major investors. Investments are mainly oriented towards professional, technical and scientific activities, finance and insurance, trade, real estate, chemistry and pharmacy (data National Bank of Austria). According to the latest figures from OECD, in the first half of 2022 FDI inflows reached USD 2.3 billion.
Austria's strengths are its stable economy, its location at the centre of Europe and its skilled and highly productive workforce. In order to encourage foreign investment, Austria provides welcoming conditions for foreign companies that want to invest in capital-intensive industries and in research and development, for which considerable tax breaks are available. Financial incentives and business subsidies are provided by Austrian federal, state, and local governments to promote investments and include tax incentives, preferential loans, loan guarantees, and grants. Furthermore, the 2022 tax reform foresees a new 10-15% eco-investment tax allowance for purchasing new commodities or business assets that have a positive ecological impact and a life span of at least four years. In 2020 the Austrian Parliament adopted a new FDI screening act (Investitionskontrollgesetz, "ICA"), following the EU Regulation (2019/452) setting a new framework for foreign investment screening. The law introduces a review of foreign investment in business activities including R&D of pharmaceuticals, vaccines, medical devices and personal protective equipment and critical infrastructure in the healthcare sector. The threshold at which government approval of the transaction is required has been lowered to 10% foreign ownership for sensitive sectors. Austria ranks 63th out of 82 countries in the Economist Business Environment ranking. The country stands at 20th place in the Foreign Direct Investment Confidence Index 2022,losing one position compared to one year earlier.
|Foreign Direct Investment||2020||2021||2022|
|FDI Inward Flow (million USD)||-9,351||13,494||1,947|
|FDI Stock (million USD)||205,762||212,889||203,974|
|Number of Greenfield Investments*||96||91||82|
|Value of Greenfield Investments (million USD)||1,537||2,040||3,541|
Source: UNCTAD, Latest data available.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
|Main Investing Countries||2020, in %|
|Uinted Arab Emirates||2.8|
|Main Invested Sectors||2020, in %|
|Professional, scientific and technical service activities||50.9|
|Real estate activities||5.3|
|Chemicals, petroleum products, pharmaceuticals||2.6|
|Manufacture of transport equipment||1.8|
|Administrative and support service activities||1.7|
Source: National Bank of Austria, Latest data available.
Advantages for FDI in Austria:
Austria’s weak points for FDI are:
|Country Comparison For the Protection of Investors||Austria||OECD||United States||Germany|
|Index of Transaction Transparency*||5.0||6.5||7.0||5.0|
|Index of Manager’s Responsibility**||5.0||5.3||9.0||5.0|
|Index of Shareholders’ Power***||7.0||7.3||9.0||5.0|
Source: The World Bank - Doing Business, Latest data available.
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Latest Update: September 2023