Any natural person or legal entity (i.e. in particular, incorporated entities), all registered partnership entities (such as OG or KG) and all comparable foreign entities are eligible to become shareholders of a GmbH. It is not required for a shareholder to be an Austrian citizen or to have their domicile or place of residence in Austria. A GmbH may be formed by a single shareholder (one-person formation). That sole shareholder of the GmbH may also act as the GmbH’s (sole) managing director. If a GmbH in Austria is formed by foreign entities, then they must provide evidence of their legal existence by acquiring confirmation of this from the competent court or Chamber of Commerce. A certified translation of this must be provided where it is not issued in German.

The question of whether an investor may employ foreign employees in Austria depends on the employees’ home country: The “European Fundamental Freedoms” give nationals from European Union or EEA countries the right to free movement and the right to work in Austria. Both a residence permit and a work permit continue, as a general rule, to be required for employees coming from countries outside the EU/ EEA (even though such individuals are often able to enter Austria as tourists without any visa).

Employment of (non-EU) aliens in Austria is subject to various restrictions and controls under the Austrian Employment of Aliens Act (German acronym: AuslBG). These restrictions exist for reasons related to labour market policy. As a basic principle, all persons are deemed aliens if they do not possess Austrian citizenship.

An entrepreneur in Austria may only employ an alien if an employment authorisation or secondment authorisation has been issued for that employee or if a confirmation of notice or an EU secondment confirmation has been issued, or the employee holds a valid work permit or exemption certificate. The public authority in which jurisdiction is vested is the regional office of the Austrian labour market service (German acronym: AMS). Exceptions: The Aliens Act does not apply to the employment of EU and/or EEA nationals (with exceptions currently still in place for Croatia).

In addition, the following types of individuals are exempted from the Employment of Aliens Act: refugees, spouses and children of Austrians or EU/EEA citizens, management-level staff, employees in diplomatic/consular missions, or aliens to whom the status of a so-called “person eligible for subsidiary protection” has been granted.

Foreign employees employed by a foreign employer who lack an office within the Austrian federal territory (e.g. employers on a construction site) will, as a general rule, require employment authorisation. Where the work being performed does not last longer than six months, aliens will require a secondment authorisation, which may not be issued for longer than a four month period. No employment or secondment authorisation is required for work that is short-term, provided it is not possible to make use of employees from the domestic market (e.g. business meetings, visiting trade fair events and conferences).

Sources:

• the Austrian Employment of Aliens Act (AuslBG)

• InvestInAustria