Operating a Business

Austria: Operating a Business

In this page: Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labour | Management of Human Resources

Legal Forms of Companies

Gesellschaft mit beschrankter Haftung (GmbH) is a Private Limited Company.: Number of partners: One or more partners with no maximum.
Capital (max/min): Minimum EUR 35,000. 50% totally subscribed and released at the creation.
Shareholders and liability: Partners' and shareholders liability is limited to the amount contributed.
Aktiengesellschaft (AG) is a Public Limited Company.: Number of partners: One or more partners with no maximum.
Capital (max/min): Minimum EUR 70,000. 25% totally subscribed and released at the creation.
Shareholders and liability: Partners' and shareholders liability is limited to the amount contributed.
Offene Handelsgesellschaft (OHG) is a general partnership company.: Number of partners: Minimum 2 partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Partners' liability is joint and unlimited for social debts.
Kommanditgesellschaft (KG) is a limited partnership.: Number of partners: Minimum 2 partners. Two types of partners: active partners and sleeping partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability of active partners is limited to capital, with at least one partner having unlimited liability. Liability of sleeping partners is limited to the amount contributed.

Business Setup Procedures

Setting Up a Company	Austria	OECD
Procedures (number)	8.00	5.21
Time (days)	21.00	9.47

Source: Doing Business - Latest available data.

The Competent Organisation: Office of the Commercial Register
For Further Information: Consult Doing Business Website, Information about procedures to start a Business in Austria.
Austrian Federal Computing Centre, The IT service provider and partner to the Federal Government

Financial Information Directories

Company Data - Official Austrian company extracts with all available financial statements

Dun & Bradstreet - Worldwide directory with financial information on businesses

FirmenInfo - Directory in Austria with business information

Recovery Procedures

Principle: Insolvency proceedings in Austria can either be initiated by the involved company itself or a creditor. If the company is insolvent ("Zahlungsunfähigkeit") or its liabilities exceed its assets ("Überschuldung"), the management of a company is responsible to file a petition for insolvency proceedings without delay.
Minimum Debt-to-Capital Ratio Triggering Liquidation: In case not even 20% of the creditors' claims can be satisfied or the creditors do not agree to the composition proceeding, the company's assets will be liquidated and the proceeds will be used to satisfy the creditor's claims.
Bankruptcy Laws: Visit this link.
Reorganization and Rehabilitation Laws: Compulsive composition proceeding: (Zwangsausgleich) 20% of the claims to be settled in 2 years. Composition proceeding (Ausgleich): 40% of the claims to be settled in 2 years.

The Active Population in Figures

	2018	2019	2020
Labour Force	4,601,213	4,622,075	4,572,356

Source: International Labour Organization, ILOSTAT database

	2017	2018	2019
Total activity rate	76.33%	76.63%	76.86%
Men activity rate	80.83%	81.34%	81.47%
Women activity rate	71.77%	71.86%	72.18%

Source: International Labour Organization, ILOSTAT database

Employed Persons, by Occupation (% of Total Labour Force)	2015
Manufacturing	16.0%
Wholesale and retail trade; repair of motor vehicles and motorcycles	14.4%
Human health and social work activities	10.1%
Construction	8.4%
Education	6.8%
Public administration and defence; compulsory social security	6.8%
Accommodation and food service activities	5.8%
Professional, scientific and technical activities	5.6%
Transportation and storage	5.0%
Agriculture, forestry and fishing	4.5%
Administrative and support service activities	3.3%
Financial and insurance activities	3.2%
Information and communication	2.8%
Arts, entertainment and recreation	2.0%
Real estate activities	0.9%
Electricity, gas, steam and air conditioning supply	0.7%
Water supply; sewerage, waste management and remediation activities	0.5%
Mining and quarrying	0.2%

Working Conditions

Opening Hours
Legal Weekly Duration: 40 hours
Maximum Duration: The statutory maximum working day is 10 hours. However, this may get extended to 12 hours on mutual agreement.
The law provides for a maximum work week of 40 hours (50 hours with overtime and 60 hours with overtime, but in this case for no longer duration than 24 weeks annually).
Night Hours: Between 10 p.m. and 5 a.m.

Working Rest Day: 36 hours per week which and must include a Sunday.
Paid Annual Vacation: 25 working days annually, and 30 days for employee who has been employed for more than 25 years.
Retirement Age: 60 for women and 65 for men.
Child Labour and Minimum Age For Employment: The minimum age for employment is 15 years.
Informal Labour Market: Very limited.

The Cost of Labour

Pay

Minimum Wage: No official minimun wage. Under a collective bargaining agreement, to which 80% of the workforce belong, the minimum wage is EUR 1,500 per month.
Average Wage: According to the OECD, the gross average wage is USD 53,132 per year in 2020.
Other Forms of Pay
Pay For Overtime: At least 50% more than regular wages.
Pay For Rest Days Worked: At least 50% more than regular wages, depending on the terms of the employment contract.
Pay For Night Hours: At least 50% more than regular wages.
Pay For Overtime at Night: At least 50% more than regular wages.

Social Security Costs

The Areas Covered: Old age, unemployment, health, insolvency and accident insurance are covered.
Contributions: Contributions Paid By the Employer: Pension insurance: 12.55%
Accident insurance: 1.20%
Health insurance: 3.78%
Unemployment insurance: 3%
Miscellaneus: 0.70%
Family burdens equalisation levy: 3.9%
Chamber of commerce contribution: between 0.34% and 0.42%
Contributions Paid By the Employee: Pension insurance: 10.25%
Health insurance: 3.87%
Unemployment insurance: 3%
Miscellaneous: 1%
Competent Organization: Association of Austrian Social Insurance Agencies

Management of Human Resources

Recruitment

Recruitment Websites: Monster
Hays

The Contract

Type of Contract: The employment contracts in Austria are regulated by the Employment Contract Law. However terms & types of such contracts are governed by the collective bargaining agreements ("Kollektivvertrag"). A non-EU person needs to obtain a work-permit before entering into an employment contract.

Breach of Contracts

Retirement: Here the employment contract may be terminated by mutual agreement by giving a notice to the employee.
Dismissals: Labour regulations prohibit termination without notice except in some extreme conditions like theft, assault, harassment.
Other Possible Methods: Collective dismissal: In this case the employer has to notify the employment centre.
Labour Laws: Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.

Dispute Settlement

Conciliation Process

Cases of Dispute

Dismissal, harassment, conflict over retirement, etc.

Legal Framework

Mediation is generally used in Austria; governed by ‘Act on Mediation – 2004’.

Procedure

The concerned parties engage a mediator (a trained and neutral intermediary) to enable the parties to solve their conflict on their own account. Such services could be provided only by registered mediators, listed with Ministry of Justice.

The Act on Mediation also establishes an Advisory Board for Mediation at the Ministry of Justice, which consists of about 25 members.

Judicial Structures

Legal Framework: Act on the Procedure in Labor Law and Social Law Matters (Arbeits – und Sozialgerichtsgesetz).
Competent Legal Body: Employment Courts An appeal from the Employment Court may be made to the Regional Court of Appeals (Oberlandesgericht). By way of exception, an appeal can made to the Supreme Court (Oberster Gerichtshof) against a decision made on appeal by the Regional Court of Appeals.

Social Partners

Social Dialogue and Involvement of Social Partners: No major strikes have occurred since 2005. The law allows workers to form and join unions. Collective bargaining is protected in law and is freely practiced. Nearly 80% of the labour force works under a collective bargaining agreement. There are nearly nine national unions, which are part of the Austrian Trade Union Federation (OGB).
Unionisation Rate: 32% in the year 2015.

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