Changes in 2026 versus 2025 – What has changed in the last year that has impacted the way business is conducted?

Over the past year, the Austrian business environment has continued to be shaped by broader European macroeconomic and geopolitical developments, influencing how foreign investors approach doing business in Austria. Austria experienced a period of economic slowdown following the energy price shock and the tightening of monetary policy across the euro area. However, forecasts indicate a gradual economic recovery beginning in 2026. According to the European Commission's economic forecast, Austria's GDP growth is expected to recover modestly in the coming years, with inflation declining to approximately 2.4 % in 2026 as price pressures ease and economic activity stabilises. The effects of the ongoing war in Ukraine and the emerging conflict in the Middle East remain to be seen.

Against this macroeconomic backdrop, investment activity has remained relatively resilient. Transactional activity in Austria continues across a range of sectors, including energy, financial services, infrastructure, real estate and technology. In particular, investments are increasingly driven by structural transformation themes such as decarbonisation, digitalisation and technological modernisation. Businesses are also adapting to a rapidly evolving technological environment, including the integration of artificial intelligence (AI) and digital technologies into operational processes.

Geopolitical developments have also continued to influence business decisions across Europe. The ongoing effects of the war in Ukraine and shifts in global trade dynamics have affected supply chains, investment flows and risk assessments across the region, and the current conflict in Iran is adding further uncertainty to the markets. At the same time, defence and security spending across Europe has risen in response to these geopolitical developments, creating additional opportunities for companies involved in technology, infrastructure, procurement and dual-use products.

Austria's role as a regional hub for Central and Eastern Europe (CEE) remains significant. Although foreign direct investment flows into parts of the CEE region have fluctuated in recent years due to global economic uncertainty, the region continues to attract substantial cross-border investment and remains closely integrated with Western European economies. Overall, while the macroeconomic environment remains cautious, Austria continues to benefit from political stability, a predictable regulatory framework and strong integration with the European Union.

What are the advantages of Austria as a business location?

Austria offers several structural advantages as a location for international investment and foreign direct investment (FDI), making it one of the most attractive jurisdictions for companies seeking to invest in Austria or expand operations within the EU single market. One of its key strengths is its strategic, geographic position at the intersection of Western and Eastern Europe. This location allows companies operating in Austria to access both the EU single market and the CEE region, making Vienna, in particular, an important regional headquarters location for multinational corporations.

Austria also benefits from a stable political and legal environment. The country has well-established democratic institutions, a strong rule of law and a regulatory framework closely aligned with European Union standards. EU membership provides businesses operating in Austria with access to the EU single market and thus more than 440 million potential consumers.

Another important advantage is Austria's highly skilled workforce and strong education system. The country benefits from an advanced vocational training system, complemented by strong higher education institutions, which ensure a steady supply of qualified professionals. Furthermore, Austria ranks second in the EU in R&D intensity, measured as expenditure on research and development as a percentage of GDP. The country also has well-developed transport infrastructure and high-quality digital connectivity, supporting efficient logistics and cross-border trade within Europe.

Austria has a diversified and export-oriented economy with a strong industrial base alongside a well-developed services sector, broadly comparable to other advanced EU economies. While the services sector accounts for the majority of economic activity, the country maintains a strong industrial base in sectors such as machinery, automotive components, electronics, chemicals and environmental technologies. In addition, Austria has a strong focus on sustainability and renewable energy. A significant share of the country's electricity production is generated from renewable sources, particularly hydropower, reflecting Austria's long-standing investment in sustainable energy infrastructure. This pronounced orientation toward sustainability and environmental technologies makes Austria particularly attractive for investors focusing on green technologies and energy transition projects.

Austria offers a competitive corporate tax regime within the EU. The corporate income tax rate currently stands at 23 %, having been reduced to this level in 2024 as part of broader measures designed to enhance Austria's appeal as a business location.

What are the business structures in Austria?

Foreign investors can establish several types of business entities under Austrian law, which is a central consideration for anyone researching how to set up a company in Austria or evaluating the most suitable Austrian business structure for market entry. The most commonly used corporate structure is the limited liability company (Gesellschaft mit beschränkter Haftung – GmbH). The GmbH is widely used by both domestic and foreign investors, particularly for small and medium-sized enterprises. It provides limited liability for shareholders and requires a minimum share capital of EUR 10,000, of which EUR 5,000 is typically required to be paid in cash before registration with the Companies Register.

Another common corporate form is the joint-stock company (Aktiengesellschaft – AG). This structure is typically used for larger companies and businesses that intend to access capital markets. The minimum share capital requirement for an AG is EUR 70,000 and the company's shares may be publicly listed.

Austrian law also recognises several forms of partnerships, including the general partnership (Offene Gesellschaft – OG) and the limited partnership (Kommanditgesellschaft – KG). These structures are frequently used by professional services firms or for joint venture arrangements where partners wish to share management responsibilities and profits.

In 2024, Austria introduced the Flexible Company (Flexible Kapitalgesellschaft – FlexKapG), a new corporate form designed primarily for start-ups and innovative companies. The Flexible Company largely follows the structure of a limited liability company but offers greater flexibility in areas such as employee participation, share transfers and corporate governance, making it particularly attractive for venture capital-backed businesses.

In addition to establishing an Austrian company, foreign investors may also conduct business through an Austrian branch of a foreign company. A branch does not constitute a separate legal entity but operates as an extension of the foreign parent company. Representative offices may also be established in Austria, typically for market research or liaison purposes, although they generally may not engage in commercial business activities. The choice of business structure usually depends on factors such as capital requirements, liability considerations, tax planning and the intended scale of operations.

How to invest in Austria

Foreign investors can enter the Austrian market in several ways. Common investment routes include establishing a new company (greenfield investment), acquiring an existing Austrian company, entering into joint ventures with local partners, or establishing subsidiaries or branches of foreign companies.

Investment procedures are generally straightforward and follow European Union regulatory standards. Incorporation typically requires notarisation of the articles of association and subsequent registration with the Austrian Companies Register (Firmenbuch). Once registration has been completed, the company obtains legal personality and may commence business activities.

Austria maintains an open investment regime and generally welcomes foreign investment. Foreign direct investment represents an important component of Austria's economic integration with international markets, with cross-border investment flows measured regularly by institutions such as the Austrian National Bank (ÖnB) and international organisations, including the World Bank and the OECD. However, certain acquisitions by non‑EU investors may be subject to screening under the Austrian Investment Control Act (InvKG), a key element of the FDI screening regime in Austria that foreign investors should assess early when planning an investment.

Foreign investors may also seek support from the Austrian Business Agency (ABA – Invest in Austria), the national investment promotion agency, which assists international companies with market entry, site selection and investment projects. Additional information and advisory services are available through institutions such as the Austrian Federal Economic Chamber (WKO) and its international arm, Advantage Austria or the Austrian Research Promotion Agency (FFG) with a focus on R&D.

Overall, Austria provides a stable and transparent legal and regulatory framework for foreign investors, supported by strong institutions, a central location within Europe and close integration with EU markets.

Economy

Austria uses the euro (EUR) as its official currency. As a member of the euro area and the European Monetary Union, Austria benefits from a stable and widely traded currency as well as integrated European financial markets. The use of the euro eliminates exchange-rate risks in transactions with other eurozone countries and facilitates cross-border trade and investment within the European Union. This monetary stability, combined with the European Central Bank's monetary policy framework, contributes to predictable financial conditions for businesses operating in Austria and throughout the euro area. Austria is therefore fully integrated into the EU's financial and economic architecture, which supports investment and cross-border commercial activity. As of early 2026, Austria maintains a very high sovereign credit rating, with S&P Global Ratings affirming its AA+/A-1+ ratings with a stable outlook.

Inflation in Austria has moderated significantly following the sharp increases experienced during the global energy crisis in 2022 and 2023. According to forecasts by the Austrian Institute of Economic Research (WIFO), the inflation rate increased to approximately 3.5 % in 2025 but is expected to decline further to around 2.4 % in 2026 as energy prices stabilise and wage growth moderates. More recent data indicates that inflation has continued to ease, with the annual inflation rate standing at around 2.2 % in early 2026, broadly in line with the European Central Bank's price stability target. Although services and energy costs remain important drivers of price developments, overall inflation is expected to remain relatively moderate in the mid-term as macroeconomic conditions stabilise and supply pressures ease.

Austria has a diversified and export-oriented economy with a strong industrial base and a well-developed services sector. Key industries include machinery and engineering, automotive production and automotive components, chemicals and pharmaceuticals, metals and advanced manufacturing, as well as energy and environmental technologies. Tourism and hospitality also represent an important pillar of the Austrian economy, reflecting the country's robust international tourism sector, while financial services contribute significantly to Vienna's role as a regional business and financial hub.

Exports play a crucial role in Austria's economic performance. According to Statistics Austria, Austrian goods exports amounted to approximately EUR 190.1bln in 2025 (preliminary data), representing a slight decrease of around 0.5 % compared with 2024, reflecting a more cautious global trade environment. Germany remains Austria's most important trading partner, followed by other key markets such as Italy and the United States, while trade with Central and Eastern European countries continues to grow due to Austria's geographic proximity and long-standing economic ties with the region.

The Austrian economy is characterised by a strong services sector, which accounts for roughly 70 % of economic output, while industry contributes approximately 28 %, reflecting Austria's status as a highly developed and diversified economy. This balanced economic structure, combined with strong export performance and close integration with European markets, supports Austria's position as a stable and competitive business location within the European Union.

Current opportunities and future prospects

Several sectors in Austria are expected to offer attractive investment opportunities in the coming years, driven by structural economic transformation, technological innovation and broader geopolitical developments across Europe.

Energy transition and green infrastructure

Austria is actively pursuing ambitious climate and sustainability targets, including a significant expansion of renewable energy production and the decarbonisation of infrastructure and industry. Investment opportunities are expected to arise in renewable energy generation (particularly hydropower, solar and wind), energy storage solutions, grid infrastructure and energy efficiency technologies. The broader European energy transition and EU initiatives such as REPowerEU continue to support investment in renewable energy, energy infrastructure and sustainable technologies.

Digitalisation and technology

Digital transformation remains a key theme across the Austrian economy. Companies across sectors are investing in cloud computing, cybersecurity, artificial intelligence and advanced digital infrastructure to modernise operations and increase efficiency. Austria also plays a role in Europe's semiconductor ecosystem, with several companies active in semiconductor manufacturing and related technologies. Austria's strong technology ecosystem, research institutions and access to EU funding programmes are expected to support continued growth in digital innovation and technology-driven businesses.

Infrastructure and construction

Infrastructure development is expected to remain a significant area of investment. Projects related to energy networks, transportation infrastructure and urban development are likely to generate opportunities for investors, construction companies and technology providers. Public and private investment in sustainable infrastructure and modern transport networks is expected to play an important role in supporting Austria's long-term economic competitiveness.

Defence and security

Heightened geopolitical uncertainty in Europe has led to increased defence and security spending across many European countries. This trend is expected to create opportunities for companies involved in defence technology, cybersecurity, compliance services and the production of dual-use technologies. Austrian companies with expertise in advanced manufacturing, engineering and digital technologies may benefit from increased demand in these areas.

Regional integration and reconstruction

Austria's geographic location and long-standing economic ties with Central and Eastern Europe continue to position the country as an important regional hub for cross-border investment. Austrian companies are traditionally active across the CEE region and may benefit from infrastructure development and reconstruction initiatives in neighbouring markets. This may create opportunities in sectors such as construction, logistics, energy and financial services.

Demographic and consumer trends

Austria's high living standards and stable income levels support steady consumer demand in sectors such as retail, tourism, healthcare and technology services. At the same time, demographic developments are likely to shape future investment opportunities. Austria's ageing population is expected to increase demand for healthcare services, life sciences, pharmaceuticals and assisted living solutions, while continued urbanisation and evolving consumer preferences may drive growth in digital services, mobility solutions and smart-city infrastructure.

Legal system

Austria has a civil law legal system based primarily on codified statutes. The foundation of Austrian private law is the Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch – ABGB). Commercial and corporate matters are governed by additional legislation, including the Austrian Commercial Code (Unternehmensgesetzbuch – UGB), the Limited Liability Companies Act (GmbH-Gesetz) and the Stock Corporation Act (Aktiengesetz).

The Austrian judiciary is organised in a multi-tier court system. At the first level, District Courts (Bezirksgerichte) primarily deal with smaller civil and certain criminal matters. Regional Courts (Landesgerichte) act both as courts of first instance for more complex civil and commercial disputes and as appellate courts for decisions of the District Courts. Above them are the Higher Regional Courts (Oberlandesgerichte), which hear appeals from Regional Courts. At the top of the ordinary court system is the Supreme Court (Oberster Gerichtshof), which serves as the highest court for civil and criminal matters and ensures the consistent interpretation of Austrian law.

In addition to the ordinary courts, Austria has specialised high courts for constitutional and administrative matters. The Constitutional Court (Verfassungsgerichtshof) reviews the constitutionality of legislation and protects fundamental rights, while the Administrative Supreme Court (Verwaltungsgerichtshof) reviews decisions of administrative authorities.

As a member of the European Union, Austria's legal framework is closely integrated with EU law. Many regulatory areas relevant for businesses, including competition law, data protection, financial regulation and environmental standards, are shaped by EU legislation and directly applicable EU regulations.

Austria is generally regarded as having a reliable, transparent and efficient legal system. The country offers a high degree of legal certainty and strong protection of property and contractual rights, which contributes to its attractiveness as a business location. In commercial practice, arbitration plays an important role in dispute resolution, particularly in cross-border transactions. Vienna has established itself as a recognised international arbitration hub in Central and Eastern Europe, with the Vienna International Arbitral Centre (VIAC) administering a significant number of international commercial arbitration cases each year.

Foreign investment restrictions

Austria maintains a generally open investment regime in line with the EU principle of free movement of capital. Foreign investors may typically acquire and operate Austrian businesses without significant restrictions.

However, certain investments by non-EU, non-EEA and non-Swiss investors may be subject to screening under the Austrian Investment Control Act (Investitionskontrollgesetz – InvKG), which entered into force in 2020 and implements the EU FDI Screening Regulation ((EU) 2019/452).

A mandatory filing may be required if a foreign investor acquires certain levels of influence in an Austrian company operating in a sensitive sector. Notification thresholds generally apply at 10 % of voting rights in particularly sensitive sectors, and 25 % or 50 % of voting rights in other critical sectors, as well as where control or substantial assets are acquired. Particularly sensitive sectors include defence technologies, critical energy infrastructure, digital infrastructure, water supply and systems relevant to data sovereignty. Other relevant sectors include critical infrastructure (such as energy, telecommunications, transport or healthcare), critical technologies (including AI, robotics, semiconductors and cybersecurity), and access to sensitive data.

The competent authority is the Federal Ministry of Economy, Energy and Tourism (Bundesministerium für Wirtschaft, Energie und Tourismus – BMWET), and transactions subject to review must generally be notified without undue delay after signing (concluded under a condition precedent of approval). Effectuation (closing) of a transaction before obtaining clearance may result in invalidity and sanctions.

Outside the investment screening framework, Austria does not impose general restrictions on foreign ownership or capital participation, and foreign investors generally enjoy the same rights as domestic investors.

Austria also does not maintain foreign exchange controls. As a member of the eurozone, capital movements are largely unrestricted and cross-border financial transactions are facilitated by the use of the euro.

Top tips to take away: what to know before investing

Summary for clients of the above

Austria offers a stable and predictable business environment with strong rule of law, access to the EU single market and a highly developed economy. Foreign investors generally benefit from an open investment regime, equal treatment with domestic investors, and unrestricted capital movements within the eurozone. However, investors should be mindful of regulatory requirements aligned with EU law and, in particular, the foreign direct investment screening regime, which may require prior approval for acquisitions in sensitive sectors such as critical infrastructure, defence or advanced technologies. Careful regulatory assessment and early planning of approval procedures can therefore be important when structuring investments. Overall, Austria remains an attractive and reliable location for international investment, particularly for companies seeking access to both Western European and Central and Eastern European markets.