ABA Business Location Austria

AustriaOpens Up New Perspectives for Your Company

www.investinaustria.at

Business Location Austria

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BUSINESS LOCATION AUSTRIA

BerlinWarsaw

Vienna

Ljubljana

Rome

Paris

OsloStockholm

Ankara

Sarajevo

Kiev

Kishinev

Riga Moscow

Prague

Sofia

London

Dublin Copenhagen

Brussels

Luxembourg

Tirana

Skopje

Belgrade

Budapest

Zagreb

Tallinn

Amsterdam

Lisbon Madrid

Athens

Berne

Bucharest

Bratislava

MinskVilnius

Helsinki

1h

2h

3h

All of Europe by Air in 3 hours

Austria’s central location in Europe makes the country the business interface hub for East-West business relations

PristinaPodgorica

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Editorial: December 2014; Owner&Publisher: Austrian Business Agency, Opernring 3, A-1010 Vienna; Editor-in Chief: René Siegl; Associate Editor: Maria Hirz-inger, Karin Schwind-Derdak; Design: www.november.at; Photos: picturedesk.com, BMWFW, Istockphoto.com, Siemens, Takeda, Ottobock, Javier Larrea, Henkel, Mahle, Julius Silver; Print: Print City Europe

Dynamic Business Location

As a business location, Austria offers companies a favorable business environment, qualified specialized staff and a modern infrastructure.

Austria ranks among the most prosperous and innovative countries in the European Union. According to Eurostat’s Prosperity Index, Austria is rated second in the EU behind Luxembourg and Germany. The dynamic business location stands out thanks to its modern infrastructure, high quality technologies, well trained and highly motivated specialized personnel. It also offers a high level of reliability with respect to the energy supply in addition to political, social and economic stability. In addition, Austria is con-sidered to be the ideal East-West business interface in a central geographical location.

Austria is growing faster than the Eurozone average, and also surpasses the global average for foreign direct investment due to its attractive business environment. For example, investors profit from a wide range of research promotion and funding programs, a business-friendly tax system and high productivity. In spite of this good positioning, we are continually working on creating an even more favorable business location conditions for the benefit of companies. In this spirit we would like to warmly welcome you to Austria.

Reinhold MitterlehnerVice Chancellor and Federal Minister of Science, Research and Economy

Austria – A Profitable LocationSecure Location for Your InvestmentsInnovation Focus Drives GrowthPeople as a Success FactorIdeal Conditions for R&DNew Medicine from ViennaEast-West Interface

Positive Economic Climate and Quality of LifeA Country of SpecialistsWorld Market Leaders from AustriaLower Taxes, Higher profitsProductivity as a TrademarkValue Creation with Recreational ValueThe Best Contact Partner for Business Location Issues

5679101214

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Contents

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A profitable location: International investors take it for granted that the business location of Austria will enable them to exploit top-notch know-how and quality, high performance technologies, a state-of-the-art infrastructure and EU membership with close proximity to Eastern and South Eastern Europe. They decide for surefire success, and thus choose Austria.

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Austria – A Profitable Location

The success factors: stability, CEE know-how and a prosperous market in the heart of Europe

Top marks for Austria as a business location: the latest report of the EU Com-mission attested the individual EU member states a rather mediocre level of competitiveness on average. This did not apply to Austria. Thanks to its solid economic performance and high labor productivity, the country ranks among the leaders in Europe. International companies benefit from this stable and profit-able business environment. The Italian automotive firm Bifrangi invested about EUR 35 million in Austria in 2014. BMW expanded its diesel engine compe-tence center at a cost of EUR 90 million, whereas the American pharmaceutical giant Baxalta committed EUR 138 million and EUR 80 million respectively to upgrade two production plants in Austria. Trumpf and DB Schenker also strongly expanded their Austrian facilities in 2014. The German construction company Bauder opened a factory for roof systems in Austria for the first time.

What makes the small country of Austria located in the heart of Europe so attractive as a business location?

All advantages at a glance. One thing is certain: for a profitable company many of the basic conditions must be suitable for business on a long-term basis. Investors can exploit a comprehensive package of competitive advantages:

• Outstanding level of energy security and reliability and low industrial electricity prices

• Political and social stability as well as a low crime rate• Hardly any strikes thanks to the excellent relationships between employers

and employees• Second most prosperous country in the EU – an attractive market with

above-average purchasing power on the part of consumers• Highly developed infrastructure with the best-performing airport with respect

to flight connections to the Central and Eastern European region• Ideal basis for business in South East and Eastern Europe with more than

1,000 CEE coordination headquarters of foreign companies• Tax advantages based on a low corporate tax rate, a Group taxation scheme

and attractive research promotion incentives• Efficient location with high labor productivity and low unit labor costs• Highly-qualified employees with practice-oriented vocational training

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No machines stand still. Companies operating internationally can rely on Austria’s extremely high level of political stability. Austria’s economic and social partnership between management and labor representatives is not only the basis for one of the lowest strike rates anywhere, with only 2 strike days annually per 1,000 employees, but also ensures a low unemployment rate and a policy of wage restraint.

In Austria businesspeople are on safe ground. Climate change and natural catastrophes increasingly influence business location decisions. Austria ranks among the top performers in the world with respect to the reliability of its energy supply. Electricity is available more than 99 percent of the time. Austria is relatively free from natural catastrophes. Accordingly, it is not even listed in the risk evaluations of promi-nent international insurance companies.

High level of personal security. The high level of legal certainty is not the only fac-tor which is particularly attractive to companies. Austria is one of the safest countries in the world with a low crime rate. Even in big cities, it goes without saying that people can safely use public transportation late at night or take a stroll around town after attending a theater performance.

Secure Location for Your Investments

Stability, predictability and security of the energy supply are outstanding features of Austria as a business location.

Source: CEER Benchmarking Report, 02/2014

Annual unplanned non-availability of the electricity supply in minutes, 2012

DenmarkGermany

NetherlandsAustria

ItalyUK

FranceHungaryPortugalSweden

Czech Rep.Poland

SlovakiaRomania

14.7515.9127.0034.7445.4555.4360.1076.2578.4884.02109.93

254.00303.10

630.00

Source: WSI - Hans Böckler Foundation 03/2014

Strike duration in international comparisonWorking days lost per 1,000 employeesAnnual average 2005 - 2012

SwitzerlandAustria

SwedenPoland

NetherlandsUSA

Germany UK

NorwaySpain

BelgiumFinland

DenmarkCanada

1256910

1626

5965

7384

106117

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Reinhold MitterlehnerVice Chancellor and Federal Minister of Science, Research and Economy

Innovation Focus Drives Growth

Cutting red tape relieves the burden on companies

How do you see the Austrian business location in international comparison?

“Austria more quickly and effectively mastered the challenges posed by the financial and economic crisis than many other countries. We have achieved a top position in Europe in conjunction with high purchasing power and the innovative performance of companies and universities. However, we will not rest on our laurels, but continuously work to improve the underlying conditions for invest-ments, exports and startups. We have also begun to reduce auxiliary labor costs and are working on tax reform measures.”

What are the particular strengths of Austria as a business location?

“Companies setting up operations in Austria highly value our qualified employ-ees, the country’s role as a business interface for Central and Eastern Europe as well as the high level of stability and legal certainty. Moreover, Austria offers broad-based research promotion programs and funding which we fur-ther expanded in recent years. This can be demonstrated by the increase in the research premium to ten percent, preferential tax treatment for contract research and the large number of new competence centers in which the busi-ness and scientific communities can efficiently cooperate. The strong focus on innovation makes a significant contribution to the good positioning of Austria’s economy and one of the lowest unemployment rates in comparison with the rest of the eurozone. In contrast to other countries, strike duration in Austria continues to be measured in seconds. Moreover, we also stand out due to the high reliability of our energy supply and our quality of life.”

What measures are you implementing in order to facilitate company start-ups?

“We have made an important decision to implement the ‘Gewerbeinformations-system Austria’ (Austrian Trade Information System). In this way companies save time and money, because the system facilitates the registering, relocating and launching of business. The motto of the new unified national commercial register GISA is to process more online instead of having to personally appear before public authorities. This will reduce costs for companies by about EUR 30 million annually. The additional reduction of official company representatives, improvements in metrology and verification and decreased record-keeping obligations with respect to working time are important steps towards cutting red tape. On balance, our measures will lead to cost savings of up to EUR 125 million annually for companies starting in 2015. Our objective is to reduce the bureaucratic burden and facilitate good economic management.”

→ www.bmwfw.gv.at

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Source: Austrian Federal Economic Chamber, 2014

Innovative small and medium-sized enterprisesCorporate structure in Austria

Source: Eurostat, June 2014

Prosperity in the EUGDP per capita 2013 in purchasing power standards (PPS), EU-27 = 100

Employees % of companies

87.310.7

1.60.3

0 - 910 - 49

50 - 249250 and more

LuxembourgAustria

NetherlandsSwedenIreland

GermanyFrance

EurozoneUK

ItalyCzech Republic

PolandHungaryBulgaria

264129127127126124

10810810698

806867

47

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People as a Success Factor

Austrian employees: top qualified and top motivated.

Exemplary education. There is a close connection between the educational system and economic success of a country. That is why Austria focuses on providing sound education and training at all levels.

Dual education. Similar to Germany, Austria offers young people a dual edu-cation system, which combines practical vocational training with vocational schooling. In cooperation with companies, the schools make sure that training matches the requirements of the business community. In additional to voca-tional schools, higher technical schools provide courses of study in all fields. The education provided usually corresponds to a Associate Degree. A full two-thirds of all 14-18 year olds attend vocationally-oriented schools. Upon graduation, students can either start their professional careers or continue their education and study at one of the 21 universities of applies sciences, 22 public universities or 11 private universities. The universities of applied sciences, which offer 550 different courses of study, are particularly tailored to the specific needs of com-panies. Close to one-half of all the study programs offered by the universities of applied sciences enable people to continue their education alongside work.

Low youth unemployment – motivated employees. The sound educational system has a positive effect. Austria has the second lowest youth unemploy-ment rate within the EU, at 9.2 percent. It is particularly important to note the strong identification of Austrian employees with the companies. In this regard Austria is ranked 5th worldwide (World Competitiveness Yearbook, 2014).

Source: Eurostat 06/2014

Job-oriented training in the educational systemShare of pupils in the upper secondary levelin percent

Youth unemployment (15-24 years)in percent

Source: OECD, Education at a Glance 2014

AustriaBelgium

Czech Rep.NetherlandsSwitzerland

ItalySweden

GermanyPolandOECD

FranceUK

HungaryJapan

767373

7065

59494848

4644

3927

23

GermanyAustria

NetherlandsUK

EU-28FranceIreland

ItalySpain

Greece

7.99.211

20.523.323.926.8

4055.758.3

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Ideal Conditions for R&D

Innovative ideas and customized solutions from Austria

Takeda now operates two companies in Austria where it develops, produces and markets pharmaceuticals. What do you think are the strengths of Austria as an internationally sought-after business location?

“Austria is a relatively small country, but favorable legal and economic condi-tions exist here. We benefit from competent specialized employees, high quality industrial and research partners along with attractive funding and a moderate corporate tax rate. In addition, the outstanding quality of life is another argument which should not be underestimated as a means of luring and retaining talented people for a long time.”

What business location factors did your company attach particular importance to?

“Vienna’s central location in Europe was very important to us. The infrastructure is excellent and one can reach all important markets from Vienna in just two to three hours. Moreover, in the pharmaceutical industry Austria is frequently at the forefront of certain trends and tendencies. We can directly profit from this thanks to our local presence.”

You were born in Germany and have already lived, for example, in Slovenia and Mexico. What do you think is special about Austria?

“Having been born in Germany, it is naturally very pleasant for me to live in a German-speaking country. Furthermore, Austria is known around the world for its high quality of life and unique cultural offering which I enjoy again and again. Of course one should also not forget to mention Austria’s mountains and lakes offering an ideal range of leisure activities. All this contributes greatly to the fact that my family feels very much at home here.”

What are your future plans with respect to Takeda Austria?

“My clear objective is to enhance the importance of our Austrian operations within the group. By commencing new production operations at the end of 2014, we not only succeeded in securing attractive investments but also significantly increasing output and value creation. On the other hand, as a research-intensive pharmaceutical company, it is important for us to be able to make innovative health care solutions available to patients, and we managed to do just that by successfully launching several new products. Our work will continue to revolve around the patient. Takeda operates two companies in Austria, namely in Vienna and Linz. Its core compe-tence is mainly in the fields of diabetes, cardiovascular diseases, oncology and gastrointestinal diseases. More than 730 employees currently work at the two sites. Takeda is ranked 12th in terms of global sales of prescription drugs and is among the top ten in Austria.“

→ www.takeda.at

Stefan König, Managing Director Takeda Austria

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“Global players such as the BMW Group invest in those locations where all the basic conditions are just right. This includes the quick and unbureaucratic handling of administrative procedures involving public authorities. In this regard we have had very good experience in Austria.”

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New Medicine from Vienna

Ottobock develops high-tech prostheses in Austria

World-class. The German company Otto Bock HealthCare Products has always been a cutting-edge trend-setter in the field of arm and hand prostheses. The latest product development breakthrough of the company is the “Michelangelo® Hand”. This new type of prosthetic hand comes closer than ever before to pre-cisely resembling the human hand. The Michelangelo Hand will enable the user to enjoy an enhanced quality of life that would have been previously unimagi-nable. The artificial hand was developed in Vienna. In the field of prosthetic leg systems, Ottobock’s microprocessor-driven prosthetic C-Leg and Genium X3, the next generation of intelligent leg prostheses, also allows for more natural maneuverability and a higher quality of life. According to Hans Dietl, Manag-ing Director and company spokesman of Ottobock Austria, new innovations expected in the future include implants in the field of high-tech prosthetic sys-tems, as well as artificial intelligence designed to coordinate prosthetic systems.

The Vienna workshop. Ottobock has operated a subsidiary in the Austrian capi-tal since 1969, employing a work force of over 600 employees, a third of whom are involved in research and development. The leading specialist in the field of prosthetics has developed important milestones thanks to the research con-ducted in Austria. “Vienna offers us the required proximity to research facilities and clinics now as it did in the past“, says Hans Dietl, explaining the decision in favor of Austria. At the end of the 1960s, the Vienna subsidiary was the first step in the internationalization process of this medical pioneer.

Customized labor market policies. According to Hans Dietl, ensuring optimal conditions in the working environment as the pre-requisite for ongoing top-notch performance in the field of research is extremely dear to his heart. “My top priority has always been the implementation of labor policies tailored to today’s business world. In order to conduct research, it is very important for research companies to be able to recruit a sufficient number of specialists and employ them at terms and conditions which will not endanger the international competi-tiveness of the company”. These pre-requisites exist in Austria.

Further expansion of the Viennese facility. Ottobock opened a new produc-tion building in 2012 after investing a total of EUR 16.6 million. An additional R&D wing of about the same size is in planning.

Otto Bock HealthCare headquartersCorporate headquarters are in Duderstadt, Germany. Ottobock Healthcare GmbH operates sales and service companies in 50 countries around the world, employing more than 7,000 people globally.

→ www.ottobock.at

Managing Director of Ottobock in Austria and CTO of the Ottobock Group

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“Vienna is the driving force for innovations in our company, and one of the growth drivers.”

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East-West Interface

EU foothold for CEE companies, CEE headquarters for Western companies

Austria is internationally considered to be the top business location for building up business ties to South East and Eastern Europe. As a headquarters location, Austria boasts a total of 314 headquarters, far ahead of the competitive CEE locations of Poland, Slovakia, Czech Republic and Hungary. A study carried out by the law firm Wolf Theiss concluded that only 84 international companies have set up their headquarters in all the four above-mentioned locations combined. On balance, about 1,000 international companies such as Siemens, Beiersdorf, Hewlett-Packard, Eli Lilly, Henkel and FedEx coordinate their CEE business operations from Austria. Approximately 40 international institutions with a focus on the CEE region are based in Austria.

Location advantages. Outstanding Central and Eastern European know-how on the part of Austrian service providers such as banks and law firms, an historically matured cultural understanding of Austrians for the CEE region, political stabil-ity and security as well as transparent laws make Austria the ideal East-West business interface. This is complemented by a high share of employees with Eastern European language competence, based on the fact that 19 percent of the population, after all, has a migration background.

Austria is the investment champion. Eastern Europe ranks among the most popular targets of Austrian foreign direct investment, almost 47% go to the CEE region. Tiny Austria is the largest single foreign investor in Slovenia, Croatia, Bosnia and Serbia. In 2014, almost 21 percent of all Austrian merchandise exports were destined for Central and Eastern Europe. Its most important CEE trading partners are the Czech Republic, Hungary and Poland.

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Headquarters in AustriaHead office of the parent company, in percent

Source: List of Headquarters in Austria

GermanyUSA

SwitzerlandFrance

ItalyJapan

SwedenUK

CanadaNetherlands

34.018.4

7.14.2

3.93.63.63.22.92.9

Headquartersof international companies

Source: Wolf Theiss Rechtsanwälte GmbH, 2011, *2014

2011

Austria 314*Poland 25

Hungary 24Czech Rep. 23

Slovakia 12

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Boom in start-ups from Eastern Europe. Prominent companies from Central and Eastern Europe such as Lukoil, VTB Bank and Agrotec have long decided in favor of Austria as an EU location. Austria is a reliable partner for EU expansion, with the required know-how and competent service providers. The number of firms established by Eastern European companies in Austria has increased significantly in the period between 2003 and 2014, rising from 567 to 3,309.

Austria’s bonus points at a glance:• A high level of interconnectedness• Well-educated and loyal employees with Eastern European language skills• Transparent legislation• Excellent infrastructure• Competent consultants, tax advisors, lawyers and financial service providers• High quality of life• High level of legal certainty and personal security

CEE junior executives “Made in Austria“. Three-quarters of all migrants in Austria come from Central and Eastern Europe. These immigrants have above-average qualifications, and the proportion of college graduates is also above average. Austrian universities and educational institutions offer tailor-made training programs, often developed in cooperation with the business commu-nity. An increasing number of Austrian educational institutions also offer training programs in Eastern Europe.

The Red-White-Red Card for highly qualified employees. The Red-White-RedCard has been available to highly qualified individuals, specialists and university graduates from non-EU member states since July 2011. This enables companies to employ, for example, technicians, chemists or managers as well as univer-sity graduates from non-EU countries educated in Austria without requiring any further permits.

Eastern European companies discover AustriaNew companies set up in Austria by CEE firms 2003 - September 2014, 2003 total: 567; 2014 total: 3,309

Source: Compass Verlag, 2014

2003 Sept. 2014

Russia 39 377Ukraine 31 135

Rest of CIS 9 69Bulgaria 29 135

Poland 40 102Romania 26 169Slovakia 116 526

Czech Republic 75 325Hungary 149 1096

Baltic States 12 60Slovenia 41 315

Austria: Investment champion in Central and Eastern Europe

Source: Vienna Institute for International Economic Studies (WIIW), FDI Report 2014

Investment ranking

Total in EUR

billionAustria’s share in percent

47.834.3

23.818.517.4

15.814.814.212.911.8

SloveniaCroatia

Bosnia-Herzegovina Romania

SerbiaSlovakiaBulgariaAlbania

Czech RepublicMacedonia

1112122332

11.724.1

5.659.114.942.337.33.5

103.53.7

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Günter ThumserPresident, Henkel Central Eastern Europe

Positive Economic Climate and Quality of Life

Corporate tax rate and group taxation are particularly attractive to international companies.

Henkel Central Eastern Europe based in Vienna is responsible for coordi-nating business operations in 32 countries of Central and Eastern Europe and in the Central Asia-Caucasus region, and a work force of about 9,500 employees. Why did Henkel Group select Austria as its CEE headquarters?

“Henkel has had a production plant in Vienna for more than 85 years and pro-duces detergents and cleaners at the Vienna plant. Since 2005 we have also been operating a central warehouse for Austria, Czech Republic, Slovakia, Slovenia and Croatia. Moreover, there is also a factory located in Ebensee, Upper Austria. In 1987, even before the fall of the Iron Curtain, Henkel also began to succes-sively build up its business in the Eastern European region. In this regard, we take advantage of the cultural proximity to Austria’s neighboring countries as well as existing long-term contacts. Then as now, the central geographical location, the positive economic climate and the quality of life are the most important assets of Vienna and Austria.”

At present, companies are quite cautious in making investments. Does Austria have a special status within the Henkel Group?

“No, not at all. Every company, and Henkel is no exception, has to define its priori-ties. In Austria we have an investment program totaling approximately 10 million euros annually. Investment promotion initiatives as well as the attractive corporate tax rate and the group taxation system are particularly business-friendly measures in Austria for international groups of companies.”

Henkel Central Eastern Europe Henkel CEE headquartered in Vienna is one of the most important growth drivers for the German Henkel Group. Henkel CEE with its approximately 9,500 employ-ees is responsible for 32 countries in Central and Eastern Europe, and operates more than 30 production facilities in the region. The Viennese location is being continually upgraded. Henkel produces more than 230,000 tons of detergents and cleansers annually here, of which 80 percent is designed for export.

→ www. henkel.at

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Austria as an industrialized nation. Tiny Austria has surprises in store for everyone, serving as the location for numerous niche players in all sectors such as ENGEL, Rosenbauer and Doppelmayer, which produce cutting edge products and are world market leaders. GREENone Tec has supplied the collectors for the world’s solar power plant at the Riad University for Women in Saudi Arabia. The Salzburg-based high-tech company Skidata equipped the largest stadium in the world, the Estádio Municipal do Maracanã in Brazil, with its modern access con-trol technology for the FIFA World Cup 2014. Firms such as Red Bull, Swarovski and Manner have gained international fame, conquering global markets from their base in Austria.

The Austrian business location is attractive. Measured in terms of purchas-ing power, Austria ranks among the most prosperous countries in the world and is rated second in the EU. Foreign investments have been rising continu-ously since 1993 in spite of cyclically-related fluctuations. In the year 2013 foreign direct investments in Austria reached a new record again of EUR 10 billion (according to UNCTAD data 2014). On balance, the value of passive direct investments is more than 44 percent of GDP, higher than the global average of around 34 percent.

A Country of Specialists

Innovative small and medium-size companies as global market leaders

Source: OECD, Eurostat 2014

Austria as an industrialized nationProduction sector’s share of GDPin percent, 2010 - 2013

Most important industrial sectorsIndustrial production 2013in EUR billion

Source: Austrian Federal Economic Chamber

GermanyAustria

JapanSwitzerlandNetherlands

ItalyUK

USAFrance

30.228.7

27.526.4

24.423.9

20.719.9

18.8

Machinery/Metal goodsChemical industry

AutomotiveGas/Heating

Electrical/ElectronicsOil

FoodMining/Steel

Wood industryConstruction industry

34.615.0

13.112.912.6

11.010.1

7.57.5

6.0

1919

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Source: GEWINN, June 2014

Company Industry Internet

Agrana Fruit preparation agrana.at

Alpla Plastic packaging andritz.com

AT&S Mobile phone circuit boards avl.com

Blum Fittings blum.com

Delfort Group Cigarette paper delfortgroup.com

Doka Circuit technology doka.com

Doppelmayr Cable cars doppelmayr.com

Engel Injection molding machinery engelglobal.com

Kapsch TrafficCom Fully electronic toll systems kapsch.net

KTM Off road motorcycles ktm.com

Lenzing Cellulose fibers lenzing.com

Mayr-Melnhof Folding cartons from recycling materials mm-holz.com

Magna Powertrain Passenger car transmissions magnapowertrain.com

Miba Plain bearings for the automobile industry miba.com

Novomatic Slot machines novomatic.com

Ottobock Healthcare Prosthetics ottobock.at

Palfinger Truck knuckle boom cranes palfinger.com

Plansee High-performance powdered metal materials plansee.com

Plasser&Theurer Track tamping machines plassertheurer.com

Red Bull Energy drinks redbull.com

RHI Refractory materials rhi-ag.com

Rosenbauer Special firefighting vehicles rosenbauer.com

Semperit Medical gloves semperit.at

Swarovski Crystal glass jewelry swarovski.com

voestalpine Track switch technology, specialty stainless steel voestalpine.com

Wienerberger Bricks and brick wall systems wienerberger.at

Zizala Headlights zkw-group.com

Zumtobel Electronic lighting technology zumtobel.com

World Market Leaders from Austria

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Lower Taxes, Higher profits

Tax incentives for research and education create a business-friendly tax system in Austria

Since the corporate tax rate was reduced to 25 percent, Austria has been cata-pulted into the top ranks of the world’s most business-friendly nations. Among the EU-15, only Ireland and Great Britain offers more favorable tax provisions. But Austria also makes a strong showing in comparison with the new EU mem-ber states that are enticing investors with major tax reductions.

Lower effective tax burden. A comparison of the effective tax burden com-piled by BAKBASEL and the Center for European Economic Research (ZEW) concludes that Austria continues to boast extremely business-friendly conditions within the EU despite massive tax competition from Eastern Europe. With a total tax burden of 22.4 percent, the taxes paid in Austria are lower than in the UK (23.8%), Italy (24.6%), Germany (29.3%) and France (32.5%).

No more inheritance tax since 2008. The abolition of the inheritance tax in Aus-tria and the related tax relief for family-owned businesses is another good reason for international investors to decide in favor of Austria as a business location.

Group taxation scheme a major competitive advantage for headquarters. The modern and attractive Group taxation model serves as a role model in Europe. The offsetting of profits and losses within a corporate group is of enor-mous importance for a globally intertwined economy. The basic idea underlying the new Group taxation model is to combine all taxable results of financially affiliated companies without the necessity of an economic or organizational subordination or superordination.

Companies operating in Austria are only subject to a unified corporate tax of 25 percent and nothing else. Taxes commonly levied in other countries, such as the trade tax or wealth tax, do not exist in Austria.

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Relocating business operations to Austria provides enormous benefits to multi-nationals as well as smaller foreign companies with subsidiaries. Thanks to the new rules, Austria is outstandingly suited to serve as a headquarters location, especially for business operations in Eastern Europe.

In the case of Group taxation, the losses of foreign group subsidiaries are offset against the profits and losses of all domestic group members. In this way, the basis for calculating taxes is reduced. The prerequisite for forming a corporate group is a financial affiliation of more than 50 percent of the basic capital, share capital or cooperative capital and of the voting rights. In the case of acquisitions, the capitalized goodwill of acquired companies can be written off over a period of 15 years, an advantage not available in other countries. The existing far-reach-ing network of double taxation treaties ensures minimal taxation at the source for dividends, interest and licensing fees.

Research more, pay less. This principle applies to all companies operating in Aus-tria. Companies can take advantage of the ten percent “research premium” for R&D expenditures as well as contract research. These subsidies are paid in cash.

Education pays off. For the education and training of employees, employers can reclaim a tax-exempt educational allowance of up to 20 percent. Alternately, firms can claim a six percent education credit for education expenditures.

GmbH light – Start-ups made easy. Since March 2014, a minimum nominal share capital of EUR 35,000 is required, of which half has to be paid in cash. New startup privileges applying to the initial phase of entrepreneurial activities were introduced (for a maximum of 10 years). Such provisions must be included in the original articles of incorporation. The privileged status is derived from the fact that such limited liability companies in Austria can now be founded on the basis of a share capital of EUR 10,000, of which only EUR 5,000 has to be paid in cash.

Source: BAK Basel Economics and the Centre for European Economic Research, 2013

BAK Taxation Index 2013 for companiesEffective average tax burden in percent

Corporate income tax rates 2014Corporate taxes on undistributed profits in percent

Source: Deloitte International Tax Source 2014*) incl. surcharges and local/national taxes

IrelandSlovenia

Czech RepublicPoland

UKSweden

SlovakiaAustria

NetherlandsNorway

GermanySpain

ItalyFrance

BelgiumUSA

12.517.019.019.0

30.0

21.0

25.022.022.0

25.027.0

30.031.4

33.334.035.0

IrelandCzech Republic

PolandHungary

NetherlandsAustria

UKItaly

BelgiumLuxembourg

GermanySpain

FranceUSA

14.116.217.018.9

20.9

24.8

23.822.4

24.624.7

29.331.232.5

41.1

22


Productivity as a Trademark

Austria ranked among the best in labor productivity

Leading in productivity. According to the EU Commission, Austria ranks among the top five within the 27 EU member states in terms of productivity per employee in manufacturing industry. Thus Austria outperforms such industrialized nations as Germany, Italy and Great Britain and is considerably ahead of neighbor-ing Czech Republic and Hungary.

The level of industrial productivity in Austria is traditionally very high. In recent years Austrian industry has achieved disproportionately high productivity gains. The decisive reason for this is the highly motivated and qualified employees.

Moderate unit labor costs. Austrian industry can keep pace with international competition very well when it comes to costs. Unit labor costs rose by one per-cent annually in the period 2010 – 2014, substantially lower than in most other EU member states.

Unit labor cost developmentin manufacturing industryAnnual change in percent, average 2007 - 2014

Source: European Commission 2014

Labor productivity 2013 in EU comparison GDP per person employed in PPS, EU-27=100

Source: European Commission, Eurostat, 09/2014

LuxembourgIreland

BelgiumFranceAustria

DenmarkItaly

NetherlandsEuro areaGermany

UKPoland

Czech RepublicHungaryBulgaria

163.9135.5

127.3116.0113.4111.0108.8108.8108.6107.0

99.474.371.970.6

43.4

Germany PolandAustria

EU-28France

Czech RepublicNetherlands

UKItaly

Hungary

0.91.1

1.51.81.922.1

2.42.4

4.1

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INVEST IN AUSTRIA

“In addition to the highly-qualified employees, the very high level of work motivation (few strikes) and productivity rank among the success factors in favor of Austria as a production location.“

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“Austria stands out due to its long-term reliable and stable conditions. These features are particularly important for a research-based company such as Boehringer Ingelheim. Furthermore, Vienna is a city with a good research infrastructure and a high quality of life, and is thus also an interesting place for highly qualified employees from Austria and abroad.”

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INVEST IN AUSTRIA

Managers working across the globe confirm it again and again: Austria has everything required by highly qualified individuals. A well-preserved environ-ment, green meadows and mountain pastures, crystal-clear waters, good air quality combined with one of the most diverse cultural offerings and the world’s highest quality of life make Austria a country which is pleasant to live in. Accord-ing to the most recent “Quality of Living Survey 2012” prepared by Mercer Consulting Group, Vienna is the most livable city in the world.

International educational opportunities, extensive recreational offering. Foreign investors do not have to dispense with having their children educated in their mother tongue. All required facilities are available, from the Vienna Inter-national School and the Japanese School Association in Vienna to the Swedish School. Close to 5,000 tennis courts, around 80 golf courses, 22,000 kilometers of ski slopes, 50,000 kilometers of hiking paths 10,000 kilometers of biking paths and much more make Austria a leisure paradise.

Personal security. Quality of life also encompasses the highest possible level of personal security, based on a low crime rate. There is hardly any other coun-try in the world which matches Austria in respect to security of persons and property. In addition, forward-looking climate protection policies, a pronounced environmental awareness and ecologically-compatible production technologies make Austria an environmental role model.

Value Creation with Recreational Value

Unsurpassed in the world: Austria’s quality of life

Source: Mercer Quality of Living Survey 2014

Ranking City Country

1 Vienna Austria2 Zurich Switzerland3 Auckland New Zealand4 Munich Germany5 Vancouver Canada11 Amsterdam Netherlands16 Berlin Germany27 Paris France38 London Great Britain43 New York USA43 Tokyo Japan50 Madrid Spain51 Rome Italy68 Prague Czech Republic75 Budapest Hungary

The most livable capital city in the worldRanking by quality of life

Unmatched quality of life10 = Quality of life is very high

Source: World Competitiveness Yearbook, 2014

Switzerland Austria Norway

GermanyNetherlands

Belgium France

USA Japan

UK Czech Rep.

ItalyHungary

Poland

12356

151719202224305456

9.739.559.479.389.21

8.638.488.338.22

7.737.56

6.464.00

3.69

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ABA – Invest in Austria offers you comprehensive service – from investment subsidies and market opportunities to tax laws. A team of 25 qualified employees put its know-how at your disposal to provide you with unbureaucratic support, but at no cost to you.

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INVEST IN AUSTRIA

The Best Contact Partner for Business Location Issues

As a consulting company set up by the Republic of Austria, ABA – Invest in Austria (ABA) is the top choice of international investors

• Business Location Austria• Automotive Industry• Research and Development• Environmental Technologies & Rene-

wable Energies• Information Technology• Life Sciences• Tourism

• Chemicals / Plastics• Machine Construction / Mechatronics /

Electronics• Logistics• Starting a Business in Austria• Tax Aspects of Investments

in Austria

• Experienced investment consultants personally serve you and provide all the necessary contacts required in Austria. Contact us when you start to consider expanding so that we can provide you with optimal support.

• ABA – Invest in Austria offers customized information on Austria as a busi-ness location – sectors, technologies and markets, political and economic conditions.

• We are happy to advise you on important issues relating to site selection such as labor and tax regulations, incentives or real estate prices.

• Employees of ABA – Invest in Austria assist and support you in handling formalities such as applying for public funding or operating licenses – also in cooperation with the regional investment promotion agencies in the federal provinces.

• ABA – Invest in Austria also provides extensive services to support expan-sion investments after project completion.

• Investors can also benefit from the international network of ABA – Invest in Austria’s offices in Vienna, New York and Tokyo as well as the foreign trade centers of the Austrian Federal Economic Chamber.

• Award-winning ABA. ABA – Invest in Austria has won several awards for its consulting services: World’s Best Investment Promotion Agency, World Bank Benchmarking (2009); Global Leader in Online Investment Promotion, World Bank Benchmarking (2012); Second-Best Investment Promotion Agency and third-place award for its program to strengthen Austria as a headquarters location, FDI World Forum (2013).

• Specialized brochures. More detailed information on different topics and industries can be found in numerous specialized brochures such as:

INVEST IN AUSTRIA www.investinaustria.at

Invest in Austria

ABA – Invest in Austria

Opernring 3A-1010 ViennaTel.: +43-1-588 58-0Fax: +43-1-586 86 59E-Mail: [email protected]

Internet:

www.investinaustria.atwww.investinaustria.cnwww.investinaustria.jpwww.investinaustria.ru

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