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Business Location Austria 2017
Sydney, October 10, 2017
BUSINESS LOCATION AUSTRIA Royal Automobile Club of Australia
89 Macquarie St, Sydney NSW 2000
Tuesday, 10 October
Business Location Austria
Welcome Shanay A. Hubmann,
Deputy Austrian Trade Commissioner
ADVANTAGE AUSTRIA
Austria’s Internationalisation Agency
• Worldwide Business Support
• 506.000 companies
• 55.000 export businesses
• We provide KNOWLEDGE
• We create PLATFORMS
• We connect our clients with PARTNERS
www.bmeia.gv.at/oeb-canberra
Business Location Austria
Opening Remarks H.E. Bernhard Zimburg,
Austrian Ambassador to Australia
Business Location Austria
Australia – Austria Business Relations
H.E. David Stuart, former Australian Ambassador to Austria
Business Location Austria
Austria - The Flipside of the Coin
A business profile of the 5th richest country in the EU
Karl Hartleb, Austrian Trade Commissioner,
This is the most
familiar side of the
coin
But there is
also another
side to it
DIS TINCT IVELY CREA TIVE
SUR
PRIS INGLY
INGE NIOUS
SUR PRIS INGLY INGE NIOUS
COM MIT TED EXP ERTS
IND USTRY AT IST BEST
CRE ATIVE
APR OAC HES
TEC HNO LOGY WIZ ARDS
Area: 83,872 km²
People: 8.7 m.
GDP growth: 2.4% (forecast 2017)
GDP / capita: € 36.400 (5th richest country in Europe)
R&D quota: 3.14% (forecast 2017)
Strong Economy in the Heart of Europe
GER 30,5%
UK 19,4 %
USA 20,7 %
BEL 22,2 %
ITA 23,5 %
JAP 25,5 %
SUI 25,5%
AUT 28,3%
CZR 37,8%
Manufacturing Industry / % of GDP
Source: The World Bank Group, World Development Indicators 2016
20
Source: Hidden Champions by Hermann Simon
Land of Hidden Champions
Number of „Hidden Champions“ per one million inhabitants
Source: Global Competitiveness Index 2016, World Economic Forum
Global Competitiveness Index
Talent
AND WHY AUSTRIA?
YOU MIGHT ASK
Source: Eurostat
Austria: 128 EU: 100
• Strong Purchasing Power / Great Test Market
• Huge Market & Strong Supply Chain Integration
• Key Attractiveness
Source: Eurostat
io.
io. 90 Mio.
420 Mio.
760 Mio.
• Strong Purchasing Power / Great Test Market
• Huge Market & Strong Supply Chain Integration
• Key Attractiveness
Leading Hub to CEE and SEE – Vienna International Airport
Austrian Airlines:
23 countries
35 destinations
451 flights per week
Source: Vienna Airport
Austrian Exports - Top Export Markets
3.313
3.922
4.103
4.381
4.790
5.329
7.165
8.373
8.727
40.055
China
Poland
UK
Hungary
Czech Republic
France
Switzerland
Italy
USA
Germany
in Mio. EUR
Source: Statistik Austria – Exports 2016
% of total
Germany
32.6
United States 8.6
Italy 4.5
Switzerland 3.8
United Kingdom 3.5
Total Investment AUD 205 bn
Main Investing Countries
% of total
Professional & Technical Services
46.3
Trade 19.0
Financial Intermediation 6.9
Chemical, Petroleum Products, Pharma
6.0
Manufacture of Transport Equipment
3.9
Main Invested Sectors
#1 / 33,7 #1 / 28,4
#1 / 21,7 #1 / 15,8
#2 / 13,2
#2 / 14,6
#4 / 10,3
#2 / 16,1
#4 / 5,6
#2 / 15,4
#2 / 12,5 #6 8,7
Source: WKO 08/2016
Austria’s rank as investor and percentage of Total investment in respective country, 2015
Top Investor: Austrian FDI in CEE
Source: IMD, 2017
• Strong Purchasing Power / Great Test Market
• Huge Market & Strong Supply Chain Integration
• Key Attractiveness
Skilled workforce Reliable infrastructure Policy stability & predictability High educational level Effective legal environment Effective labor relations Strong R&D culture
Dual educational system
Vocational schools
21 Academies of applied sciences
22 public universities
12 private universities
More than 1,000 extra-university
research institutions
Vienna largest University town in the German Speaking world (200.students) Foreign language competencies, 20% of the population have an immigration background
Skilled Workforce
Sectors:
ICT
life science
material science
Pioneers Festival – largest Annual Start-up Festival in Europe
GIN – Global Incubator Network Program
Public seed and research funding as well private equity
Austria: The up-and-coming early- stage investment capital of Europe
Source: https://techcrunch.com/2016/07/08/austria-the-upcoming-early-stage-investment-capital-of-europe/
VIENNA – High Quality and Affordable Living
Quality of Living: Rank 1 worldwide - for the eighth time in a row Vienna ahead of Zurich and Auckland Source: Quality of Living Survey, Mercer, London, 2017
Smart City Index: Rank 1 worldwide Vienna ahead of Chicago und Singapore Source: Think:Act Smart City, Roland Berger, 2017
Most Reputable Cities: Rank 2 worldwide Vienna ahead of Zurich and after Sydney Source: City RepTrak Ranking, Reputation Institute, 2016
Most Liveable Cities: Rank 2 worldwide Vienna ahead of Vancouver, Toronto and after Melbourne
Source: Global Liveability Ranking, The Economist Intelligence Unit (EIU), 2016
Office rent: 1/3 rd of London rates, 1/2 of Paris rates Source: Vienna Business Agency, 2016
Talent
AUSTRIA
A TESTED BUSINESS LOCATION
30 Headquarters of International
Organizations
3rd Global Headquarter of the United Nations (UN)
OPEC
International Atomic Energy Organisation
UNIDO
OSCE
More than 14,000 international staff and diplomats (UN) are living in Vienna
14 international schools
Leading conference city (according to ICCA study
Of International Companies including 28 “Fortune
500” corporations make Austria the preferred location
for CEE headquarters
More than 360 Headquarters
Latest Investments in 2017…
AUD 113 MIO
AUD 1.05 MRD
AUD 53 MIO
AUD 515 MIO
Boehringer Ingelheim
Talent
AUSTRIA
A TESTED BUSINESS LOCATION
AND YOU ARE
NOT THE FIRST ONE TO JUMP
Maquarie (Superannuation Fond)
IFM (Airport Vienna)
Maquarie (Energie Steiermark (Regional Electricity Utility)
Cochlear
Macquarie Health Corporation (AU)
EUROPEAN LITHIUM LTD
Ardexa
TourRadar
Proximity to the target market
Productivity and motivation
Stability
Quality of life
Infrastructure
Austria – An excellent Bridge to
the EU and beyond And a great place to live in
A market in it´s own right
In Summary
Business Location Austria
Commercial, Corporate & Employment Law
Dr. Michael Kutschera, Partner Binder Grösswang
[email protected] +43 (1) 534 80 – 420
www.bindergroesswang.at
GENERAL 1
Civil Law System
Codified Statutory Law
Similarities to Germany and Switzerland
Electronic Registries and Communication with Courts European Framework
Regulations (directly applicable) and Directives (to be implemented by national law)
Top Standard re Human Rights, Non-discrimination, Data and Privacy
Protection
GENERAL 2
Relevant Legislation mostly Federal (with exceptions)
Administration through Federal and State Bodies
“Indirect Federal Administration”
9 Sister States (Bundesländer)
Districts (Bezirke) / Municipalities (Gemeinden)
Republic of Austria
Federal Authorities
Legislation and Administration
Legislation and Administration
Administration Administration
Court System
CORPORATE COMMERCIAL
Most Common Corporations GmbH (Company with Limited Liability)
Minimum Share Capital € 35,000 (in certain Cases € 10,000)
No Share Certificates/Share Transfers through Notarial Deed only AG (Joint Stock Company)
Minimum Share Capital € 70,000, unless listed only Registered Shares
CORPORATE COMMERCIAL
Management (two tier system) GmbH
Management Board, Supervisory Board mandatory in certain cases only (e.g. more than 300 Employees)
AG
Management Board and Supervisory Board
If Supervisory Board established 1/3 of Members delegated by Employees (no “co-determination” German style). No Restrictions as to Nationality or Domicile of Managing Directors or Supervisory Board Members.
CORPORATE COMMERCIAL
Continued
Branch Offices
SE
Electronic Commercial Registry System Maintained by Courts
Registration of Corporations Condition for Corporate Existence
Can be Accomplished on the Basis of Powers of Attorney
Is effected within short from filing of documentation
Key Corporate Features and Amendments thereto must be registered to be valid after Judicial Review
Protection of Reliance on Registry
Easy Direct Electronic Access
BANKING / FINANCE
Cooperative / Savings / Classic Banking Sectors each with a Separate Deposit Insurance scheme
European Framework Capitalization/Solvency Passporting AML
Wide Coverage of CEE
Supervision through European Central Bank and Austrian Authorities
(OENB, FMA)
PUBLIC LAW
Trade License System Combined with Plant License Requirement Depending on Type of Business, Personal Qualifications May be
Required for the Personnel in Charge, a Person responsible for Compliance with Trade Laws must Reside in Austria
Administered by the Districts, Frequently in Cooperation with the
Chambers of Commerce (Mandatory Membership)
Major Review in Case of Environmentally Sensitive Projects
Regular Review of Compliance with Environmental, Health and Safety Requirements by Various Authorities
LABOUR / SOCIAL SECURITY
Individual Labour Law Detailed Statutory Mandatory Framework but Termination on Notice is
permitted in most Cases
Mandatory Health, Accident and Retirement Insurance for Everybody
(Employees – Contributions paid by Employer and Employee,
Entrepreneurs, Professionals)
Employee Representation
On Employer Level Works Council (Shop-Agreements)
Chamber(s) of Labour (Mandatory Membership)
Unions (Collective Bargaining Agreements made on Branch Level, not for
Individual Businesses)
“Social Partnership”
Business Location Austria
Real Estate Law & Investment
Dr. Nikolaus Pitkowitz M.B.L.- HSG, Graf & Pitkowitz
+43 1 401 17-40
www.gpp.at
(18 August 2017)
AUSTRIAN REAL ESTATE MARKET
Secure investment climate
Stable and transparent market
Attractive yields (4-6%)
Multi billion volume of commercial real estate transactions
RENTAL MARKET
Residential EUR 10-20 per m²
Office EUR 15-30 per m²
Tenant-friendly tenancy law
Trade laws and environmental impact laws
TRANSACTIONS
Asset Deal or Share Deal Land Title Register (no title insurance)
Commercial Register
Certain restrictions on foreign ownership
TRANSACTION COSTS
Purchase Price
3.5% Property Transfer Tax
1.1% Registration
Fee
Legal Fees and Trusteeship
Notarization 1-3% Real
Estate Agent
SUSTAINABLE OUTLOOK
Skilled Labour
73% English speaking
High ratio (1/3) of renewable energy
Bureaucratic hurdles falling
NY-Times: Top 3 candidate for post Brexit financial centre
Business Location Austria
Taxation & Incentives Christian Wimpissinger,
Partner Binder Grösswang
+43 (1) 534 80 – 270
www.bindergroesswang.at
CORPORATE INCOME TAXATION IN AUSTRIA
General Aspects Corporations (i.e. limited liability company [GmbH], stock
corporation [AG]) are subject to unlimited taxation in Austria if
legal seat or
place of effective management
is located in Austria
Profits are taxed at the standard corporate income tax (CIT) rate of 25%, (retained or distributed)
Dividends at (non-business) shareholder’s level are taxed at a rate of 27.5% (see below)
CORPORATE INCOME TAXATION IN AUSTRIA
Anti Abuse General Anti Abuse Rule (GAAR) Subject over form concept True economic substance of transaction prevails over its formal
appearance Taxation cannot be avoided by abusing instruments of civil law No formal thin capitalization rules
Recent and future developments
Implementation of Anti Tax Avoidance Directive (BEPS measures at EU level)
Impact of BEPS Actions (e.g., MLI)
GROUP TAXATION
Netting of profits and losses of financially
affiliated companies at the parents’ level if parent company directly or indirectly holds more than 50% of the shares of the subsidiary
Under certain circumstances also cross-border losses
Financial affiliation with individual group members must exist during the entire financial year
Group must exist for at least three years
Parent
Sub Sub
Sub
Foreign Sub
R&D PREMIUM
Austria generally has no patent box regime
Taxpayers may claim a subsidy (Research and Development Tax Premium – Forschungsprämie) in the form of a cash premium equal to 12% of qualifying R&D expenses (as of 1.1.2018: 14%)
An expert report (issued by the Austrian research promotion organization) is required that confirms the nature of the expenses in question as R&D expenses
The premium is also available in case of contract R&D
INTERNATIONAL PARTICIPATION EXEMPTION
Dividends received from a foreign company are generally tax exempt at the
corporate shareholder level if
the Austrian company holds at least 10% of the issued share capital
for a minimum holding period of one year
Both capital gains and capital losses derived from such participations are tax
neutral (option to tax).
Foreign Sub
Austrian Parent
In the case of presumed tax abuse, the participation
exemption for dividends and capital gains is replaced by
a tax credit (switch-over-clause).
The credit system (switch-over) is applied if
foreign subsidiary does not meet an active-trade-
or-business test (i.e. passive income from
royalties, interest, etc. is greater than 50% of
total income of subsidiary) and,
is regularly subject to a foreign income tax
burden of 15% or below
TAXATION OF CAPITAL INCOME AND REAL ESTATE TAXATION
Capital income generally includes
income from the allocation of capital (dividends, interest) realized increases in the value of investments income from derivatives
Generally taxed at a rate of 27.5% (final / definitive taxation) Special withholding regime Special taxation regime on the sale of non-business real estate
property (Immo-ESt) In case of a taxable event a special tax rate of 30% is applied for sales Difference between old and new property Tax base is the difference between the revenue of the disposal and the
acquisition costs Special exemption provisions (e.g., residences)
EU FUNDAMENTAL FREEDOMS AND TAX LAW
European Union generally has no power to create (harmonized) provisions with regards to direct taxation (as opposed to indirect taxation such as VAT)
Exemptions: e.g., Parent-Subsidiary-Directive, Merger-Directive, ATAD
National tax law has to respect the „fundamental freedoms“ (= no discrimination (direct or indirect) on the ground of nationality)
European Court of Justice developed scheme to test whether a national provision infringes fundamental freedoms: Analysis of scope of national provisions Detection of infringement (discrimination) Justification for infringement (e.g., effective fiscal supervision,
combating the tax evasion, coherence of the tax system)
Example areas for infringements: cross-border losses
DOUBLE TAX TREATY NETWORK AND HIGHLIGHTS
Number of Double Tax Treaties: 91
General Concept (exemption; credit method generally only regarding dividends and royalties and with countries that do not exempt, e.g., US, UK)
Australia: method split
Treaties with countries in Near East (UAE treaty-wise similar to EU Member State)
Treaties with countries in Latin America (particularly, with Brazil, Chile)
DTT Austria – Japan: first treaty including BEPS provisions (no amendment through MLI necessary)
Business Location Austria
Business in Austria from Down Under
Dr. Thomas R. Wenkart, CEO Macquarie Health Corporation (AU)
Derma Medical Systems Ltd. (AT)
+61 2 9692 7987
www.machealth.com.au
IN 2003 - HOW, WHY & WHEN DID MACQUARIE
MEDICAL SYSTEMS (MMS) BECOME INVOLVED WITH
DERMA AUSTRIA
AUSTRALIA HAS THE HIGHEST RATE OF SKIN CANCER
INCIDENCE IN THE WORLD WITH 2 IN 3 AUSTRALIANS
BEING DIAGNOSED WITH SKIN CANCER AT SOME
STAGE DURING THEIR LIFETIME.
AUSTRIA IN 1997 (DERMA MEDICAL SYSTEMS) WAS THE
FIRST COMPANY TO COMMERCIALISE DIGITAL SKIN
IMAGING SYSTEMS. THERE ARE NOW OVER 3,000
SYSTEMS IN OVER 60 COUNTRIES.
AUSTRALIAN – AUSTRIAN RELATIONSHIP
CO-MANAGEMENT FROM AUSTRALIA
AUSTRIA– 7 TEAM MEMBERS
DAILY DUTIES: ADMIN, MARKETING, SALES,
MANUFACTURING, PRODUCT DEVELOPMENT, QA
AUSTRALIA – 9 TEAM MEMBERS
DAILY DUTIES AND SUPPORT TO AUSTRIA IN
THE FOLLOW AREAS: ADMIN, MARKETING,
SALES, PRODUCT DEVELOPMENT,
MANUFACTURING, QA
STRATEGIC PRODUCT
DEVELOPMENT
AUSTRIAN TEAM
PREVIOUS DEVELOPMENTS (SINCE MERGING):
MOLEMAX HD: ONE OF THE FIRST HD IMAGING SYSTEMS IN 2009
DERMDOC: THE FIRST DESKTOP SOPHISTICATED CAMERA SYSTEM
CURRENT DEVELOPMENTS:
AUTOMATED TOTAL BODY MAPPING SYSTEM
SKINDOC: PORTABLE HD VIDEO IMAGING SYSTEM
AUSTRALIAN TEAM
PREVIOUS DEVELOPMENTS (SINCE MERGING) INCLUDE:
BODY MAPPING STAND
HAND HELD LIVE IMAGING SYSTEM
CURRENT DEVELOPMENTS
HAND HELD HIGH RESOLUTION MICROSCOPE USING DROPLET TECHNOLOGY
BENEFITS FROM THIS JOINT RELATIONSHIP
WITH AUSTRIA
IN AUSTRIA
FUNDING ASSISTANCE FOR PRODUCT DEVELOPMENT
REVENUE GROWTH & GREATER WORLDWIDE COVERAGE
EXPERTISE FROM AUSTRALIAN ENGINEERING TEAM ASSISTING WITH PRODUCT DEVELOPMENTS & IMPROVEMENTS
AUSTRALIAN TEAM ASSISTING QA/RA IMPROVEMENTS
EURO REGION GROWTH OPPORTUNITES
IN AUSTRALIA
INCREASED SALES DUE TO NEW & IMPROVED PRODUCTS
MORE SATISIFED CUSTOMERS WITH QUICKER SERVICE TEAMS
MORE FEATURES & COMPETITIVELY PRICED PRODUCTS
AUSTRALIAN OWNER: IMPROVES ACCOUNTABILITY & FLEXIBILITY IN ALL AREAS
FUTURE DIRECTION
JOINT PRODUCT DEVELOPMENT
SALES OPPORTUNITIES INTO THE AMERICAS
TAX PLANNING
WORLDWIDE DISTRIBUTION NETWORK
JOINT VENTURES
SUMMARY THE UNUSUAL MIX OF AN OPPORTUNITY IN 2003 NOW ENCOURAGES JOINT DEVELOPMENT ACROSS THE WORLD. THIS ENHANCES REGIONAL POTENTIAL E.G. RUSSIA FROM AUSTRIA AND CHINA FROM AUSTRALIA. THUS A WORLDWIDE DISTRIBUTION AND SUPPORT PLATFORM IS ESTABLISHED.
SKIN DIAGNOSTIC DEVICES ARE UNDERUTILISED AND CAN OFFER SIGNIFICANT IMPROVEMENT IN CLINICAL ACTIVITIES BY BETTER PRECISION IN DIAGNOSIS AND LESS INVASIVE PROCEDURES.
Business Location Austria
Q & A Shanay A. Hubmann,
Deputy Austrian Trade Commissioner
05:30 pm
Walk to the Opera House
Preregistered guests only
