Austria

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Vienna: the business side of the city

In terms of both its location and its political positioning, Austria could be described as being “at the heart of Europe”. It’s a common claim, but one Austria has more right to than most – a member of the eurozone ever since it was launched, bordering six other EU member countries, and with excellent access to many others. A stable economy, flexible labor laws, and a package of recent tax cuts, are prompting the country to market itself as “the better Germany”, but Austria is very much its own country.

Industry is concentrated in the lowlands in the east of the country. Good transalpine road and rail links ensure that even the mountainous western part of the country is no bar to transporting goods, and the Danube is a major artery linking countries all the way to the Black Sea. Planned investments of some E10 billion over the next four years will further improve road and rail links across the country and beyond.

promoting growth

GDP growth for 2006 is expected to be around 3.3% – above the average for Eurozone economies. The government has declared its intentions to put a freeze on tax raises in 2007 in order to encourage further investment and maintain this rate of growth. This follows on a successful initiative to reduce corporate tax to a flat 25% in 2005, putting Austria in the bottom third of OECD members by taxation. Further measures are in place to enhance Austria’s competitiveness in 2007, including a liberalization of working and retail hours.

FDI Overview

Germany is one of the biggest investors in Austria, responsible for some 30% of FDI projects over the last five years. The US was responsible for some 12% of projects. The most popular sectors for investment were retail, manufacturing and business services, including sales, marketing and support. There are many factors involved in attracting investors to Austria, including:

Advantage austria

• Springboard to central & eastern Europe;
• First-class location for R&D;
• Decreasing unit labor costs;
• Qualified and motivated workforce;
• Good labor relations /No strikes;
• Moderate corporate tax rate;
• Promoting investment & research.

developing THE HIGH-TECH sector

Austria benefits from a well-developed service industry and manufacturing base. Now, the government is looking to further develop cutting-edge research facilities, with the ultimate aim of having a ratio of one-third publicly funded research to two-thirds privately funded. The government is committed to an extra €50 million of public research spending over 2007, followed by an additional €100 million in 2008, and further increases until 2010 – a total investment of some €800 million above existing levels. It is hoped that this increase in public spending will help create worldclass clusters that will in turn stimulate private investment in this area.

SMEs

International airport for an international economy, Vienna

Small and medium-sized enterprises (SMEs) make up a significant part of the Austrian economy, and the government is keen to promote this sector. Government support and subsidies are available to both indigenous and foreign start-ups that come into the following categories. For these purposes, a small business is one that employs 50 persons or less, and has an annual turnover of €50 million or less. A medium-sized enterprise is one that employs up to 250 people, and has an annual turnover of up to €20 million. However, no larger company may hold a stake of more than 25%.

amcham austria

The main objective of the American Chamber of Commerce in Austria is to promote economic and trade relations between Austria and the United States of America. Firms and businessmen join the Chamber for various reasons, eg in order to take advantage of the Chamber’s broad variety of services, others simply to promote goodwill between the USA and Austria. Many companies join in order to enable their executives to network, make new business contacts and to exchange information useful to their particular business.

Contact Information

American Chamber of
Commerce in Austria
Porzellangasse 35
1090 Vienna
austria
Tel: +43 1 319 57 51
E-mail: office@amcham.or.at
Website: www.amcham.at

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