Austria: Investing

FDI in Figures

With the country being located at the crossroad of East and Western Europe, direct foreign investment has always been important because of Austria's geographic location. After an economic slowdown due to the global crisis, the trend has once again been upward. Austria's strengths are its political stability, its location at the centre of Europe and a skilled work force.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	11,272	7,011	6,613
FDI Stock (million USD)	158,654	158,322	154,999
Performance Index*, Ranking on 141 Economies	91	82	-
Potential Index**, Ranking on 141 Economies	26	-	-
Number of Greenfield Investments***	111	73	-
FDI Inwards (in % of GFCF****)	12.5	26.1	-
FDI Stock (in % of GDP)	38.4	43.8	-

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field 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. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

FDI Inflows By Countries and Industry

Main Investing Countries	2009, in %
Germany	31.1
Italy	24.9
United States	11.9
Switzerland	6.3
Netherlands	5.7
Countries of the Persian Gulf	4.0
France	3.4

Main Invested Sectors	2009, in %
Real estate, renting and business activities	64.5
Trade and maintenance	16.4
Manufacturing	11.4
Financial intermediaries	4.2
Transport, storage, communication	1.8

Source: OECD. Stat Extracts - Last Available Data.

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

Why You Should Choose to Invest in Austria

Strong Points: Well developed infrastructures, a skilled and competent work force and high productivity are the country’s strong points. Austria has the headquarters of many firms and ranks 27^th out of 181 economies with regard to ease of doing business. Austria also has a significant assemblage of pharmaceutical companies based in the country, thus developing a focus of biotechnological skills and attracting the big companies of this sector.
Weak Points: Austria’s weak points:
- Rigid labor practice;
- Lack of risk capital financing;
- restrictive migration laws;
- Strong dependance to Central and Eastern Europe where numerous investments have taken place (risky in case of a crisis in one of these countries);
- the restrictions of its internal market.
Government Measures to Motivate or Restrict FDI: Export incentives, political stability and low telecommunication costs make the Austrian business climate favorable. Another attractive factor is the fact that Austria has the most attactive taxation system in Europe and does not have a wealth tax or professional tax. Regional investment subsidies, tax exemptions on training (20%) and a training bonus for apprentices guarantees the country's appeal.
To mitigate the effects of the crisis, Austria has implemented mesures to reinforce the liquidity and the capitalization of the financial system.

Protection of Foreign Investment

Bilateral Investment Conventions Signed By Austria: Visit the UNCTAD website.
International Controversies Registered By UNCTAD: Austria is not involved in any investment dispute.
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	الولايات المتحدة	Germany
Index of Transaction Transparency*	3.0	6.0	7.0	5.0
Index of Manager’s Responsibility**	5.0	5.2	9.0	5.0
Index of Shareholders’ Power***	4.0	6.8	9.0	5.0
Index of Investor Protection****	4.0	6.0	8.3	5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Procedures Relative to Foreign Investment

Freedom of Establishment: Guaranteed.
Acquisition of Holdings: Possible.
A majority holding interest in the capital of a local company is legal in Austria.
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, reconducted by the law n°194 of 1994.
Competent Organization For the Declaration: Federal Competition Authority (FCA)
Requests For Specific Authorizations: Licenses are required in sectors like banking and insurance. Moreover, the federal and state governments maintain at least a 51% share in all electricity generation and supply companies.

Office Real Estate and Land Ownership

Possible Temporary Solutions: Ready to move office spaces (on rent) are available in the country. They offer complete infrastructure to start business operations.
The Possibility of Buying Land and Industrial and Commercial Buildings: Yes
Risk of Expropriation: It happens very rarely. However, the concerned party is fairly compensated.

Investment Aid

Forms of Aid: Easy access to capital market, corporate tax cut, special tax incentives are available for R&D. Austria offers financial and tax incentives within EU parameters to firms undertaking projects in economically depressed and underdeveloped areas on Austria’s eastern and southern borders.
Privileged Domains: Research and Development, Infrastructure building (expanding and improving the road, rail, energy and telecom infrastructures), and sectors helping in creation of jobs.
Privileged Geographical Zones: Research and Development, Infrastructure building (expanding and improving the road, rail, energy and telecom infrastructures), and sectors helping in creation of jobs.
Free Zones: Austria does not have any such free zones.
Organizations Which Finance: Austria Wirtschaftsservice (AWS) is the government’s “one-stop shop” institution providing financial help.

Investment Opportunities

The Key Sectors of the National Economy: Food and Drink industry, Mechanical and Steel Engineering, Chemical and automotive industry, Wood pulp and paper industry.
High Potential Sectors: Wine, multifunctional security solutions and security software, e-commerce.
Privatization Programs: Energy and Telecom sector
Tenders, Projects and Public Procurement: Tenders Info, Tenders in Austria
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors: Gambling
Sectors in Decline: Agriculture sector.

Finding Assistance For Further Information

Investment Aid Agency: Austrian Development Cooperation
Austrian Business Agency
Advantage Austria
Other Useful Resources: Vienna Business Agency
Doing Business Guides: Lexmundi Guide to Doing Business in Austria
Deloitte Tax And Business Guide
Austria Commercial Guide 2010 - Buy USA

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