Business environment in Austria

Published: Friday, 16 August 2019 Print
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Austrian business overview

When it comes to exploring the business environment, one should be aware of its business etiquette and communication, student placements as well as internship, work-life-balance, and of course, the cost of living.

Austria, for example, is one of the world’s economically stable, richest country, while also being the smallest country in the EU. Is is referred as a hub of West-East public relations. While having borders with Germany and Czech Republic, Slovakia, Hungary, Slovenia, Italy, Switzerland and Liechtenstein, it has lots to offer both economically and business-wise to its neighbours and citizens as well.

 

Austria’s population statistics

Having a population of around 8.8 million, it has about 90% people of Austrian nationality, around 10% foreigners, coming from Serbia, Turkey, Montenegro, Bosnia-Herzegovina, Croatia and Germany. The employment rate in the country is about 77%. Its official language is German. 98% its citizens are the German speaking ones. A Slavic minority living there speaks Croatian and Slovenian as well. There is also a small community of Jews living in the country – the immigrants from World War II. The country has a freedom of religion. The country is divided into 9 provinces.

 

Austria’s business culture

Generally, Austrians are conservative nation, having deeply rooted cultural traditions and a proper time for each activity, whether it is a hobby or a certain business activity, for example. Country’s business etiquette is its important counterpart. Austria has high standards of its business partners, therefore, any unethical behaviour can easily diminish any business negotiations.

As Austrians are rather educated (its literacy rate is 99%), it also has an evolved education system with qualified workers being graduates from its universities (with a free education) with an opportunity of special feature referred to as vocational training (apprenticeship), when the education focuses on the particular company’s business. Therefore, the country has successfully formed its business culture through raising its educational standards.

 

Setting up a business in Austria

It is important for all Austrians to be aware of the relevant transportation options, accommodation choices and business distribution channels. All of these three areas are rather developed in the country as it plays an important role in the creation of trans-European networks. Car, bus, rail, aircraft and ship travel is available.

 

Taxation

Every tax payer in Austria is required to pay Einkommensteuer, referred as taxes on all income earned during the particular period (applied both, to income from Austrian and non-Austrian sources). Income taxes are deducted at source in case of having an employment in Austria.Money and tax documents.

The double taxation agreement option is available between Austria and its neighbouring states as well as all EU member states and a few other countries which are not subject to Austrian income tax.

 

Social security

The country has developed a social security system which includes receiving an accident insurance, covering accidents at the workplace, health insurance (including maternity protection), old-age pension benefits, unemployment insurance, unemployment benefits and social welfare, while also having social security agreements with all EU countries and some other nations.

 

Working environment in Austria

The country has good working conditions supported with employee protection. A standard working day has eight hours, 40 hours per week for full-time employees, who have 25 days of paid vacation annually. Female employees can take maternity leave for 8 weeks and receive a monthly allowance or a Wochengeld, corresponding to the average net salary. The Elternkarenz option is also available or an unpaid maternity/paternity leave, taken during the first 24 months of the child’s life.

 

Austria’s business environment and investment incentives

The country has a reputation of an industrialised nation. It has a large service sector with the major Austrian companies operation in the country such as Swarovski and Red Bull, for example. The country has a comprehensive system of local and national incentive programmes available for a specific project, depending on their geographic location, and varying from cash grants, low interest loans to export guarantees.Office space with workers.

Moreover, grants for company premises, equipment and machinery are not taxed as income; grants or subsidies to create or maintain jobs can be tax free. A large part of Austria's land area supports various EU structural fund programmes with financial incentives available within EU guidelines to promote investments in the country, ranging from tax incentives to preferential loans, grants and guarantees to the incentives available only if the planned investment meets specified criteria stated by the government.

For example, there are certain grants available up to a maximum of 50% of project costs for technology transfer, transport projects, IT costs, and software engineering as well as the energy projects as well. Loans are available within the European recovery programme (ERP), having 2-4% benefit for up to 70% investments, which can be made in country’s environmental protection technology, covering tangible and intangible assets.

 

Advantages of Austria’s business environment

To sum up, Austria has a few advantages for making business there. They are: an excellent infrastructure; modern and efficient public administration; socially reliable legal system; high personal security and high level of social peace; well-developed taxation system; attractive research promotion incentives; a high labour productivity, low unit labour costs; top motivated, highly qualified employees.

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