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The Austrian legal system is based on the separation of powers of legislation, jurisdiction and administration. Upon entry to the EU, Austria adopted the European legal framework. Here you can find an overview of the fields of law which concern investors as well as information about the Austrian legal system.


Law of Contracts, E-Commerce and Acquisition of a business

This article gives an overview of the basic principles of Austrian contract law and the E-Commerce Act. You can also find information about the prerequisites for foreign aquisitions and share-holding. 

Law of Contracts

The legal framework on the law of contracts is set forth in the Austrian Civil Code and a newly enacted Uniform Commercial Code (UGB). The UGB governs all commercial transactions as of January 1, 2007.

Freedom of Contract

Freedom of contract is the underlying principle of Austrian contract law. The contracting parties are thus free to choose any terms suitable for a transaction, unless a contractual provision or covenant would render the agreement unconscionable or otherwise unlawful. A contract is defined as consenting declarations of an offer and a corresponding acceptance and in general, neither offer nor acceptance requires a specific form under Austrian law. Also oral agreements and, under restricted circumstances, agreements implied through action (tacit agreement) are legally binding and enforceable.

Certain exceptions to this freedom of form apply with respect to securities and suretyship agreements, insurance contracts and certain agreements governed by consumer protection laws. These contracts must be made in writing to become effective. The even stricter form of a notarial deed is required to set up corporations and transfer shares held in a limited liability company.

Terms and Conditions

Business transactions are commonly subject to either of the contracting parties’ terms and conditions and Austrian law safeguards that such general terms pass a test of fairness and are not forced upon the other party.

Electronic Commerce

The Austrian E-Commerce Act implemented the European E-Commerce Directive and applies to services that are rendered via electronic processing and storage systems. Voice telephony, telefax or telex services are excluded from the scope of the Act. Those means of communication are covered under the provisions on distance contracts which are contained in the Austrian Consumer Protection Act.

Country-of-Origin Principle

According to the E-Commerce Directive and the E-Commerce Act, the country-of-origin-principal provides that the regulations apply where the service provider has its principal place of business. Consequently, a provider with a registered office in Austria must comply with the Austrian Trade Act and related regulations governing supply and distribution of goods and services. Once the Austrian requirements are met, however, the provider may also conduct its activities in other EU member states without additional requirements. Conversely, every provider with an establishment in another EU member state may conduct its activities in Austria if it complies with the provisions of its country of origin.

Contract Conclusion via Internet

Generally, contracts can be concluded over the internet and are governed by the same rules as other, more traditional contracting activities. One crucial aspect is, however, that promotion of goods on the internet does not constitute an offer but only a request addressed to a customer to make an offer. The contract is only perfect if and when the customers receive express acceptance/acknowledgement from the supplier or if goods ordered are subsequently delivered.

Acquisition of a business

Foreign individuals and entities can freely establish a company, acquire Austrian businesses and assume managing functions.

Setting up a Company

Austrian company law knows a variety of different types of companies and corporations. Due to its simple structure and limited liability, the Austrian Gesellschaft mit beschränkter Haftung (limited liability company) is commonly used to set up a business in Austria . The minimum equity capital amounts to Euro 35,000 of which 50 % must be made as a cash payment. As of March 01, 2014 the Austrian Act on Limited Liability Companies also provides for a “privilege” for founders, which allows them to set up a limited liability company with an equity capital amounting to only Euro 10,000 (of which Euro 5,000 euros must be paid in as a cash payment up-front). However, if this model of a GmbH “light” is chosen, the minimum equity capital will have to be increased to Euro 35,000 within 10 years. Liability of the GmbH vis-à-vis third parties is capped at the amount of the contributed share capital. Foreign nationals and entities can assume the position of shareholder or founder without restrictions. Shareholders of a GmbH can directly influence and direct the actions of its managing board.

The Austrian Aktiengesellschaft (Stock Corporation) is slightly more complex and costlier to establish and administer. The minimum share capital amounts to Euro 70,000, the managing board is monitored by a supervisory board that has to have at least three members.

Nationals of foreign jurisdictions can also set up limited or unlimited partnerships (Offene Gesellschaft, Kommanditgesellschaft).

More information: Starting a business in Austria

Company Management and Acquisition

However, prior to starting any business in Austria , the entity or partnership must apply for a trade permit. Certain business activities also require evidence that management of a business entity has the skills and faculties to conduct such a business. Legal entities must appoint a trade director (can also be managing director) who is liable for any violations of applicable trade regulations.

Under the Austrian Federal Trade Act, certain acquisitions by foreign individuals or entities pertaining to certain Austrian industries require prior approval by the Austrian Ministy for Economy. The range of industries or sectors falling under this approval regime is rather broad and includes military equipment manufacturers, energy and water supply companies, security services, hospitals and other businesses touching upon the public interest. Any acquisition resulting in a stake of at least 25 per cent (assets or share capital) of such an entity will trigger the approval requirement. The acquisition of an Austrian business can be structured as an asset deal or a share deal. 

Intellectual Property

Patent Rights

The Austrian Patent Act (Patentgesetz) contains detailed regulations for the protection of new inventions. A patent right gives the holder an exclusive right to the commercial production and general use of the invention. The patent right is limited to a period of 20 years. In case of infringement, the holder can ask for preliminary injunctions (cease and desist order) and is also entitled to receive accurate consideration as compensation. The infringing party can also be ordered to disgorge profits made through infringement and to publish the final court decision. The patent is acquired by way of registration with the Austrian Patent Office . Protection is granted according to priority of registration. Austria has also ratified the TRIPS Agreement.

The official Austrian body for the registration of patent rights is the Austrian Patent Office. The European Patent Convention of 1973 decrees that a patent registration within Europe can be applied to all member states . This European patent registration can be filed at the Austrian Patent Office and the European Patent Office . Individuals without a permanent residence in Austria must be represented by an Austrian attorney. Here you can find a list of Austrian patent lawyers (German only) .


Inventions below patent-level are protected under the Austrian Registered Design Act (Gebrauchsmustergesetz). Registration procedure for a registered design is easier than for a patent; the protection period is also shorter (10 years). The scope of protection, however, corresponds to that of a patent.

Other designs are protected under the Austrian Design Protection Act (Musterschutzgesetz). Protected are forms, covers, materials etc. of a specific design. The protection also grants a right of exclusivity. The period of protection is five years. Renewals are permissible under Austrian Law.

The Austrian authority for the registration of designs is the Austrian Patent Office .

Trade Mark Rights

Trademarks, service marks and brand names (Marken) are protected under the Austrian Trademark Act (Markenschutzgesetz). A trademark right is established by way of registration. A registered trademark provides its holder with an exclusive right to use and transfer the trademark. In case of infringement, the trademark holder can claim damages, compensation for unjust enrichment and also move for preliminary injunctions. The initial registration provides for protection of 10 years; repeated renewals are permissible under Austrian Law. The Austrian authority for the registration of trade mark rights is the Austrian Patent Office .

Under applicable EU-directives, community trademarks can be registered with the EU- Intellectual Property Office (EUIPO) in Alicante, Spain. Such a community trademark offers protection in all EU-member states. International protection requires an international trademark under the Madrid Trademark Agreement of 1891.


Literary, musical, artistic and cinematographic works and computer programmes are protected under the Austrian Copyright Act (Urheberrechtsgesetz). Protection under the Copyright Act does not require registration; the copyright exists upon creation of the work. In case of a copyright infringement, the copyright holder can demand a cease and desist order, removal or destruction of plagiarism and counterfeit and damages or compensation for unjust enrichment. The protection period is:

  • 70 years for works of literature, music, arts, broadcasts and sound carriers
  • 50 years for photographs

Antitrust and Merger Control

Generally, agreements between businesses restricting competition are prohibited under national and EU-legislation. EU-Antitrust regulations come into play where an agreement is likely to affect trade between EU-Member States. Certain exemptions apply with respect to certain types of agreements: distribution agreements

  • supply agreements
  • franchise Systems

Unlike EU-Cartel Law, Austrian law distinguishes between various types of cartels and emphasizes the organizational structure of a cartel. Austrian merger control regulations require a pre-merger notification if certain turnover thresholds were exceeded in the previous business year. Special rules apply to mergers in the media, banking and construction industries. Merger control aims at avoiding dominant market positions, unless the dominant position through a merger results in improvements which outweigh the disadvantages of too much economic clout or is otherwise justified from an economic perspective.

Labour Law

Fully compliant with applicable EU-regulations, Austrian employment legislation is still more flexible than labour laws in other European jurisdictions.

Employment contracts

Employment contracts can be concluded for a definite or indefinite time period and, generally, can be terminated without cause by adhering to agreed contractual or, otherwise, statutory notice terms. Collective bargaining agreements provide for minimum wages which are regularly below the industry average. Collective bargaining agreements often provide for various provisions that govern the contractual relationship between employer and employee and are more favourable to employee than applicable statutes. Establishment of a works council is mandatory by law where at least five employees are permanently employed. This obligation, however, is not enforceable and in practice, a works council is rarely established in businesses with less than 50 employees.


The legal framework covering employment is manifold: normal working hours are regulated in the Working Hours Act (Arbeitszeitgesetz) and provide for a 40-hour work week (several collective bargaining agreements provide for a 38.5-hour-week). Flexible working hours are common and working overtime is generally permitted. Employer and employee need to agree whether overtime is compensated through payment of a surcharge or time-off. The Austrian Leave Act (Urlaubsgesetz) provides for a mandatory annual leave of five weeks and more recent legislation introduced an entitlement of young parents to part-time work.

Employee’s Remuneration and Social Security

An employee’s remuneration is usually paid in 14 instalments/year (two extra payments under applicable bargaining agreements; those extra payments are granted preferred tax treatment). Employer and employee must share in the payment of social security contributions and wage taxes (fiscal and para-fiscal charges). Each employee is insured against accident, illness and unemployment. Retirement pensions are also financed by way of this social security system (pay-as-you-go system; Umlageverfahren). Employers’ contributions to social charges (health, accident, pension and unemployment insurances) amount to approximately 22 % of the gross salary; employees contribute roughly 18% of their gross salary.

Termination of Employees

Termination of employees must not be discriminatory (gender, ethnicity, religion or belief, age, disability), inherently unfair or unconscionable. Certain statutory regulations apply with respect to mass redundancies. Since 2003, redundancy and severance payments are financed through monthly employee-contributions amounting to 1.53% of their gross income that are withheld from their salaries and administered by professional, outside fund managers; the old statutory system of mandatory severance payments has been abolished.

For detailed Information concerning the Austrian Employment Law visit the website of the Austrian Federal Economic Chamber .

Currency Control, Income Tax and Corporate Tax

This article contains further information about the liberal Austrian currency control regulations and the taxation of individuals and legal entities.

Currency Control

Austria has very liberal currency control regulations, based on the ruling EU-provisions and the Austrian Currency Law ( Devisengesetz 2004). The Austrian National Bank (Oesterreichische Nationalbank, OeNB) is responsible for currency control in Austria . The principle of Freedom of Movement of Capital applies within the EU and there are no legal restrictions on payments and capital transfers between Austria and the other EU member states.

In respect of currency transactions with countries outside the EU there are, with few exceptions, neither restrictions on payments relating to foreign trade, investment or other transactions nor on capital transfers, payment of dividends, profits or other earnings. Foreign firms have unrestricted access to the Austrian capital market. Some currency transactions do, however, have to be reported to the OeNB, principally for the statistical purposes. Further information is available at:

Oestereichische Nationalbank (OeNB)
Otto Wagner Platz 3
1090 Vienna
+43 1 40420 0
+43 1 40420 042399

Income Tax and Corporate Tax

Income of individuals is subject to personal income tax (Einkommensteuer). Legal entities do not pay personal income tax but corporation tax (Körperschaftsteuer). Profits earned by a partnership are taxed at partner-level.

Income tax

Individuals with an Austrian residence are taxed on their worldwide income (unbeschränkte Steuerpflicht). Non-residents are only taxed on certain sources of income earned in Austria (beschränkte Steuerpflicht).

The Austrian Income Tax Act provides for taxation of seven types of income:

  • agriculture and forestry
  • self-employment
  • business operations/trade
  • employment
  • capital assets
  • leasing and renting
  • other income

The taxable income is taxed at a progressive tax rate with a maximum of 50%.

A separate investment income tax (Kapitalertragsteuer) is levied on income generated from Austrian investments and on income earned in Austria from foreign debt securities. The current tax rate is 25%.

Corporate tax

Corporation tax (Körperschaftsteuer) must be paid by legal entities as a specific corporate income tax. The tax rate is currently 25%, which is among the lowest in the EU. The minimum annual corporation tax equals 5% of the minimum equity of Austrian corporations, ie Euro 1,750 for the GmbH (limited liability company) and Euro 3,500 for the AG (joint stock corporation). Reductions are available for start-ups as of 1 March 2014:

  • During the first five years following the establishment of the company, the minimum annual corporation tax amounts to only Euro 500 (i.e. Euro 125 per calendar quarter).
  • During the subsequent five years, the minimum corporation tax amounts to Euro 1,000 per year (i.e. Euro 250 per quarter).
  • Starting from the eleventh year following the establishment of the company, the full minimum corporation tax amounting to Euro 1,750 per year (i.e. Euro 437,50 per quarter) must be paid.

Foreign corporations without a registered office or management in Austria are liable to Austrian tax with their Austrian income.

For further information on Austrian Taxes visit the website of the Austrian Ministry Of Finance .

Insolvency and Restructuring


Austrian restructuring legislation provides for a variety of possible proceedings once insolvency looms. All proceedings except for bankruptcy proceedings are aimed at salvaging the insolvent debtor, i.e. structured to achieve a full debt release.

Bankruptcy Proceedings

Available assets of the debtor are divided among creditors following the principle of equal treatment. Certain creditors are granted preferential treatment:

  • rights to separation
  • rights to recovery
  • priority of secured creditors

Claims of employees are mostly covered by a government-run insolvency protection fund and financed through mandatory contributions by employers. If a debtor cannot honour claims by creditors or if liabilities exceed assets (over-indebtedness – Überschuldung), the debtor must file a bankruptcy petition within 60 days. Under those circumstances creditors may also file such a petition. A debtor’s failure to file a petition within due time amounts to a criminal offence and also entails a personal liability irrespective of a limited liability-structure of the insolvent entity. Once bankruptcy proceedings are opened, a trustee in bankruptcy (Masseverwalter) assumes control and administration of the failed business and divides the assets among the creditors (private sale, court auction). After the estate has been distributed, bankruptcy proceedings are terminated. Creditors may, however, bring their non-secured or unsatisfied claims against the bankrupt entity or individual for up to 30 years.

Composition Proceedings

Composition proceedings (Ausgleichsverfahren) serve to rescue the debtor by way of partial release from debts. Debtor must offer creditors payment of at least 40 % of the outstanding debt within 2 years. This proposal requires acceptance by creditors (two-fold majority of the creditors present at the court hearing and majority of creditors representing at least 75 % of the total debt) and a court order approving the proposal. Creditors who do not consent are subject to a proposal’s terms once accepted by the majority of creditors and confirmed by the court. Once the debtor has made payment of the proposed fraction of the outstanding debt, the debtor is then released from the residual debt balance.

Insolvency Prevention

The Austrian Act on Business Reorganisation (Unternehmensreorganisationsgesetz) provides for special court proceedings in the event of a threatened insolvency. Reorganization proceedings start with the submission of a reorganization plan to the court. The reorganization plan must explain the reasons for the business crisis, contain counter-measures planned and a prospect of the reorganized business. The reorganization plan and its implementation will be monitored by a reorganization auditor.

Private Bankruptcy

Bankruptcy proceedings are not restricted to businesses. Individuals who became insolvent may petition the court with a payment plan (Zahlungsplan) or similar proceedings with a subsequent release from the balance of the debt. Provided the private debtor pays off at least 10% of the outstanding debt, he or she will be released from all other debts so that creditors can no longer instigate proceedings.

Court System, Arbitration and Attorneys-at-law

This article provides more information about the court system and arbitration in Austria. In addition you can find contact details and information about the competences and activities of Austrian attorneys-at-law, public notaries, chartered accountants and auditors, as well as certified translators and interpreters. 

Court System and Jurisdiction in Austria

Claims based on private law (commercial transactions, torts, domestic relations, employment litigation etc.) are tried before the courts of general jurisdiction (ordentliche Gerichte); in turn, arbitration would require an express, written arbitration agreement. The Austrian court system is strictly federal and has a three-tier structure. Subject matter jurisdiction on the trial level is either with one of the county courts (Bezirksgericht) - each having jurisdiction in the relevant county - or with the district court (Landesgericht), having jurisdiction in each of the district circuits. The county courts are small–claims courts (amounts in controversy below Euro 10,000) and also have subject-matter jurisdiction in domestic relations cases and rent control. All other claims must be brought before the district court.

The venue in either case is determined by a defendant’s residence or place of business. Austrian trial courts (county and district courts) are general-jurisdiction courts (with a few exceptions, e.g. administrative, constitutional and anti-trust matters). Cases are principally decided by a single trial judge and not by a panel of judges. Austria has no jury trial for claims based on private law. Judges are not elected but appointed and then receive a lifetime tenure.

Representation by an Austrian attorney-at-law (German only) is compulsory unless the amount at issue does not exceed Euro 5,000. Legal aid is available for plaintiffs and defendants without sufficient financial means to cover legal expenses.

Under more recent EC regulations on jurisdiction and recognition/enforcement of tribunal awards, judgments rendered in Austria will also be recognized and enforced in other EU or EEA member states, and vice versa . Other than that, foreign judgments are only enforced in Austria subject to bilateral treaties on recognition and enforcement.

For further information about the Austrian Justice System please visit the website of the Austrian Ministry of Justice .

Arbitration in Austria

On an international level, dispute resolution through arbitration has the considerable advantage that based on international treaties; Austrian arbitration awards are enforceable in almost any jurisdiction. Austria has signed all important bilateral and multilateral treaties, among those the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

An arbitration agreement must be drawn up in writing to be valid and legally binding, although an arbitration clause by way of exchanging fax or electronic messages would suffice to meet this statutory requirement. It is highly recommendable to include an arbitration clause in contracts with an international context. Dispute resolution through arbitration allows for comparatively expeditious proceedings and an award on the merits that is also fully recognized and enforced by Austrian federal courts.

The Vienna International Arbitral Centre (VIAC) of the Austrian Federal Economic Chamber in Vienna is a renowned arbitration organisation that is increasingly chosen to settle multi-jurisdictional disputes and helped establish Austria ’s reputation as a venue for international arbitration.

Attorneys-at-law, Public Notaries, Chartered Public Accountants und Certified Translators


Legal advice is primarily rendered by a Rechtsanwalt (attorney-at-law). Admission to the Austrian Bar requires extensive post-graduate training:

  • several years of court clerkship and employment as a trainee lawyer
  • multi-day bar exam

Membership in the Austrian Bar Association (German only) is mandatory, the association also rules in disciplinary matters. Lawyers from other EU and EEA member states are entitled to preliminary practice of law in Austria under the professional admission of their home country. After at least three years of practice in Austria , European lawyers may apply for full admission in Austria . With a few exceptions, Austrian lawyers have the exclusive right to represent their clients also before courts and jurisdictional branches of government. Fees are determined according to the statutory Lawyers’ Tariffs Act, although fee arrangements based on time spent are gaining importance. Constituency fees are prohibited by law. Austrian lawyers are subject to a strict statutory obligation of confidentiality.

The Directory of Lawyers (German only) of the Austrian Bar Association offers detailed information and contact addresses of Austrian attorneys-at-law.

Public Notaries

Legal education and training for public notaries is similarly strict and time-consuming. Public notaries are appointed by the Austrian attorney general; the number of positions is limited by law. Notaries provide important certification services in connection with corporate law (many legal instruments concerning establishment, restructuring or sale of Austrian companies require the form of a notarial deed). Also, notaries act as quasi–governmental administrators for estates and provide administrative assistance to courts in inheritance proceedings. Generally, notaries are not admitted to litigate before court. Fees of notaries are determined according to the statutory Notarial Tariff Act.

The following website provides comprehensive information on the institutions and duties of the Austrian civil law notaries and contact informations of Austrian public notaries.
For further information: Austria’s Civil Law Notaries

Chartered Public Accountants

Tax advice is generally provided by tax consultants (Steuerberater). Tax consultants and lawyers closely cooperate in corporate restructurings and similar transactions. Tax consultants often also carry out tax audits, but certain types of audits (e.g. financial statements of stock corporations) may only be carried out by certified auditors (Wirtschaftsprüfer).

Online directories of Austrian  tax consultants, auditors and certified auditors can be reached via the website of the Austrian Chamber of Chartered Public Accountants (German only) and on .

Certified Translators

In the international business world it is often necessary to have documents translated by certified translators. Following are contact addresses of certified translators and interpreters in Austria: