Living, working, and investing in Austria
We live in turbulent times, where we have had to come to terms with the fact that political stability, economic prosperity and security are anything, but a given. Under these circumstances, stability in all its manifestations becomes one of the most important values for modern society.
The ensuing spike in energy prices, skyrocketing inflation, and influx of refugees only amplified problems the world has faced before. The aftermath of the COVID-19 pandemic, the migrant crisis, and the rise of populist and, to some extent, even extremist political parties, coupled with unemployment and economic uncertainty, present challenges that will continue to put the resilience of many world economies to the test.
Naturally, some fare better than others. In the European Union, France will likely manage to skirt a recession in 2023 with an estimated GDP (Gross Domestic Product) net growth of 0.2% in Q1. Economic powerhouse Germany on the other hand, continues to dwell in negative territory, with its GDP being estimated to contract by 0.3%, while Austria manages to stand its ground and grow its GDP by 0.7% in 2023.
But weathering economic challenges isn’t the only discipline where Austria stands out. For the second year in a row, Vienna has been named the most livable city in the world by the Economist’s Intelligence Unit. Among the factors that earned Austria’s capital the top spot are its (i) stability, (ii) rich culture, (iii) exceptional healthcare and education systems, (iii) superb infrastructure, and (iv) low crime rate.
|Top 5 Most Livable Cities in the World (2022)|
Fig. 1 Source: Economic Intelligence Unit (EIU)
This underpins that Austria has much more to offer than just famous landmarks and world heritage sites, bedazzling mountaintops in the Alps, and rich culture, history, and architecture that make it one of the most popular tourist destinations in the world.
In fact, Austria is also a major hub for small and medium-sized enterprises (SMEs) in the European Union, particularly in the professional services and industrial landscapes. The professional services sector is by far the biggest contributor to Austria’s GDP with social services, health, education, retail, and real estate leading the charge. In the Industry bracket, food and beverage, mechanical engineering, chemical, and automotive are the leading sectors.
Naturally, Austria’s attractive business environment is the result of many factors, including a business-friendly climate and very competitive corporate tax rates. As of this writing, the standard corporate income tax rate in Austria is 24%, which will be reduced to 23% by 2024. As there are no additional taxes on corporate profits, Austria has an important edge over neighboring Germany (24.58+%), Italy (27.9%), France (26%-27.5%), and Spain (25+%).
|Corporate Income Tax (CIT) Rates in EU Economies|
as of Fiscal 2024
as of Fiscal 2021
as of Fiscal 2022
CIT rate 15.825% + trade tax of 8.75% to 20.3%
24% IRES +3.9% IRAP
Additional taxes apply
Fig. 2 Source: PwC Worldwide Tax Summaries
The Austrian government also adopted an additional eco-social tax reform in January 2022, which offers additional tax relief to companies and their employees, making Austria a very attractive destination for businesses of all sizes and across all major industries.
This means that Austria is also a popular destination for skilled workers from all over the world. Due to the high density of flourishing Small and Medium-sized Enterprises, skilled workers are able to cherry-pick from an abundance of exciting and well-paid job opportunities.
If the idea of living, working, or investing in Austria has piqued your interest and you would like to learn more about making Austria your home, starting a business in, or relocating your business to Austria, or investing in Austria, please feel free to contact us anytime. We will be happy to help you.
|EU Member State||GDP Growth 2024|