How to establish a limited liability company in Austria?

A GmbH is established by adopting articles of association (Gesellschaftsvertrag/ Errichtungserklärung) (hereinafter: AoA) which must be concluded in the form of a notarial deed. In the case of a »one-man-GmbH«, the AoA can be adopted in electronic form without the need for a notary public if the sole shareholder is a private individual and who is also to be appointed manager of the company. After the AoA have been adopted it is necessary to appoint the company’s bodies, i.e. the management (and in some exceptional cases also a supervisory board), which is done by way of a shareholders resolution (or in the AoA if the manager is also a shareholder).

The next step is payment of the capital contributions by the shareholders. The minimum share capital of a GmbH is EUR 35,000. Half of this amount (i.e. EUR 17,500) must be paid in cash at incorporation. In the initial AoA (unamended), the shareholders can opt for the so-called establishment privilege (Gründungsprivileg) – here the minimum share capital is only EUR 10,000, half of this amount (i.e. EUR 5,000) must be paid in cash at incorporation. The establishment privilege is available for 10 years from the company’s registration in the Austrian commercial register – after that the share capital must be increased to at least EUR 35,000.

Once the AoA have been adopted and capital contributions paid the next step is registration in the Austrian commercial register (Firmenbuch). Commercial register applications must be signed by all appointed managing directors, and must be accompanied by the following documentation: (i) the AoA, (ii) notarized documentation on the appointment of the managing directors, (iii) a declaration from the directors that all necessary cash and in-kind contributions have been paid and are freely available, (iv) a bank certificate to that effect and (v) notarized signature specimens for each of the managing directors (Musterzeichnung).

The GmbH with all the benefits it offers (e.g. relatively low share capital requirement, limited shareholder liability and a high level of shareholder control / supervision of the company), makes it by far the most commonly used corporate legal forms in Austria. The timeline for establishment a GmbH depends on the complexity of the structure (bearing in mind the stringent KYC procedures employed by banks when opening accounts in Austria); however, a GmbH can in principle be established within 2-3 weeks. Establishment costs (legal services, notary public, registration) usually add up to approx. EUR 5,000.