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In this page: FDI in Figures | What to consider if you invest in Austria | Protection of Foreign Investment | Procedures Relative to Foreign Investment | Office Real Estate and Land Ownership | Investment Aid | Investment Opportunities | Sectors Where Investment Opportunities Are Fewer | Finding Assistance For Further Information

 

FDI in Figures

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 2023 World Investment Report, FDI to the country totalled only USD 1.9 billion in 2022, down from almost 13.5 billion one year earlier. FDI stock reached USD 203.9 billion in the same year. Data from the National Bank of Austria show that Germany is by far the main investing country (30.8%), ahead of Russia (11.4%), Switzerland (8%), the U.S. (6.6%), Italy (5.7%), and the UAE (%4.6). Overall, the EU accounts for 52.9% of the total investment stock. Investments are mainly oriented towards professional, technical and scientific activities (56.8%), finance and insurance (12.2%), trade (7.8%), real estate (6.5%), chemistry and pharmacy (2.7%). According to the latest figures from OECD, in the first half of 2023, FDI inflows stood at only USD 931 million.

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 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 introduced a review of foreign investment in business activities including R&D of pharmaceuticals, vaccines, medical devices, 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. The corporate tax rate was lowered from a 25% flat tax to 24% in 2023, with a further reduction to 23% starting in 2024. Austria ranks 63rd out of 82 countries in the Economist Business Environment ranking, 18th among 132 on the Global Innovation Index 2023 and 33rd out of 184 countries on the 2023 Index of Economic Freedom.

 
Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) -9,35113,4941,947
FDI Stock (million USD) 205,762212,889203,974
Number of Greenfield Investments* 969182
Value of Greenfield Investments (million USD) 1,5372,0403,541

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.

 

FDI STOCKS BY COUNTRY AND INDUSTRY

Main Investing Countries 2020, in %
Germany 30.8
Russia 13.4
Switzerland 7.0
USA 6.5
Italy 5.8
Netherlands 3.5
Uinted Arab Emirates 2.8
United Kingdom 2.8
France 2.7
Japan 2.5
Main Invested Sectors 2020, in %
Professional, scientific and technical service activities 50.9
Financial intermediation 14.6
Trade 12.5
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.

 
Form of Company Preferred By Foreign Investors
Gesellschaft mit beschraenkter Haftung (GmbH Limited Liability Company)
Main Foreign Companies
Boeing, BAE Systems, Toyota, General Motors, Ford, Mitsubishi, BASF, DuPont, McLanahan, Siemens, etc.

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What to consider if you invest in Austria

Strong Points

Advantages for FDI in Austria:

  • Austria ranks 27th out of 190 economies with regard to ease of doing business in the World Bank's Doing Business 2020 ranking
  • Well-developed infrastructure
  • Skilled and competent work force and high productivity
  • Austria also has a significant pharmaceutical industry, thus developing a focus of biotechnological skills and attracting the big companies of this sector
  • Good quality of life (Vienna is in first position in the world ranking established by Mercer)
  • Good regional (European Union) and international integration. Austria benefits in particular from its strategic geographical location between western, central and eastern Europe
  • Substantial current account surplus
  • Austria is a desirable tourist destination
  • High level of public investment in R&D
  • Political stability and personal security are especially strong in Austria
Weak Points

Austria’s weak points for FDI are:

  • Rigid labour practices and complex regulations
  • A lack of risk taking in capital finance
  • Restrictive immigration laws
  • Trade dependence on Germany
  • The country is strongly dependent on central and eastern Europe, where numerous investments have been made, which has weakened the banking sector
  • Small domestic market
Government Measures to Motivate or Restrict FDI
Export incentives, political stability and low telecommunication costs make the Austrian business climate favourable. Generally, the Austrian government favours FDI targeting the high-tech sector. Federal, state, and local governments provide investment incentives at the same conditions to local and foreign investors, including tax incentives, preferential loans, loan guarantees, and grants. Tax incentives are available for projects in economically underdeveloped and rural areas, for job-creation and for investment in R&D. The governmental institution that provides financial incentives for businesses is the Wirtschaftsservice (AWS). Foreign investors may also claim government support measures designed for companies affected by the COVID-19 epidemic.
For further information, refer to the portal InvestInAustria.

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Protection of Foreign Investment

Bilateral Investment Conventions Signed By Austria
Visit the UNCTAD website.
International Controversies Registered By UNCTAD
Please consult UNCTAD's Investment Dispute Settlement Navigator.
Organizations Offering Their Assistance in Case of Disagreement
ICSID , International Center for settlement of Investment Disputes
ICCWBO , International Chamber of Commerce
Member of the Multilateral Investment Guarantee Agency
Yes
 
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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Procedures Relative to Foreign Investment

Freedom of Establishment
There are no specific legal, practical or market access restrictions on foreign investment. Nevertheless, a national security investment screening process is in force for potential foreign acquisitions of at least 25% of a company considered essential to national security or which is involved in the provision of public services such as energy, water, telecommunications, and education.
Acquisition of Holdings
A majority holding interest in the capital of a local company is legal in Austria. However, a local managing director must be appointed to any newly established enterprise.
Obligation to Declare
In order to be able to run a company in Austria, professional ability proofs are required in nearly all activities, listed in a regulatory test: Gewerbeordnung, renewed by the law number 194 of 1994.
Competent Organisation For the Declaration
Austrian Economic Chamber (WKO)
Requests For Specific Authorisations
Licenses are required in sectors like banking and insurance. A national security investment screening process is in force for potential foreign acquisitions of at least 25% of a company considered essential to national security or which is involved in the provision of public services such as energy, water, telecommunications, and education. Moreover, the federal and state governments maintain at least a 51% share in all energy generation and supply companies.

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Office Real Estate and Land Ownership

Possible Temporary Solutions
Ready to use office spaces (on rent) are available in the country. They offer complete infrastructure to start business operations.
Some options include: OfficerentInfo, InstantOffices, Regus.
The Possibility of Buying Land and Industrial and Commercial Buildings
Yes, there is no discrimination between local and foreigners.
Risk of Expropriation
It happens very rarely and only in case of "public interest". However, the concerned party is fairly compensated.
The expropriation process is non-discriminatory toward foreigners

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Investment Aid

Forms of Aid
Austria offers tax incentives, preferential loans, loan guarantees, and grants within EU parameters to firms undertaking projects in economically depressed and underdeveloped areas on Austria’s eastern and southern borders, as well as for company investing in high-tech industries and R&D.
Privileged Domains
Tax incentives, preferential loans, loan guarantees, and grants may be provided under specific circumstances, according to the sector and geographical location of the investment.
Privileged Geographical Zones
Research and development, infrastructure building (expanding and improving the road, rail, energy and telecom infrastructures), and sectors helping in jobs creation.
Free-trade zones
Austria does not have any free zones.
However in some regions (the economically underdeveloped areas on Austria's eastern and southern borders and rural areas), the government offers special facilities and services ("cluster packages") to foreign investors.
Public aid and funding organisations
Austria Wirtschaftsservice (AWS) (Austrian promotional bank) is the government’s “one-stop shop” institution providing financial help.
 
 

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Investment Opportunities

The Key Sectors of the National Economy
Pharmaceutical and chemical, industries automotive, food-processing, financial services, steel and mechanical engineering, wood pulp and paper industry, electricity (especially hydroelectricity), health sector, tourism, information and communication technologies sector. 
High Potential Sectors
Renewable energy, wine, multifunctional security solutions and security software, e-commerce.
Privatization Programmes
There are no indications of any government privatizations in the near future (no public enterprise has been privatized since 2007).
Tenders, Projects and Public Procurement
Tenders Info , Tenders in Austria
TED - Tenders Electronic Daily , Business opportunities in the EU
DgMarket , Tenders Worldwide

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Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors
Gambling (although in March 2020 the Czech Sazka group increased its stake in the partially state-owned gambling group Casinos Austria to a majority share)

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Finding Assistance For Further Information

Investment Aid Agency
Invest in Austria (national investment promotion agency)
Advantage Austria
Other Useful Resources
Vienna Business Agency
Doing Business Guides
Doing Business - Austria
 
 
 
 

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Latest Update: April 2024