Austria

GDP (US$ Billion)

416.85 (2017)

World Ranking 28/192

GDP Per Capita (US$)

47,290 (2017)

World Ranking 15/192

Economic Structure

(in terms of GDP composition, 2017)

Services
(62.79%)
Industry
(25.27%)
Agriculture
(1.13%)

External Trade (% of GDP)

101.2 (2016)

Currency (Period Average)

Euro

0.89 per US$ (2017)

Political System

Federal republic

Overview

Austria has a well-developed market economy that welcomes foreign direct investment (FDI), particularly in technology and research and development. The country benefits from a skilled labour force and a high standard of living, with its capital Vienna consistently placing at the top of global quality-of-life rankings. Austria does fairly well in terms of business environment as it ranks 27th out of 190 countries in the World Bank's 2020 Ease of Doing Business ranking. Austria's strengths are its stable economy, its location at the centre of Europe and its skilled and highly productive workforce. Export incentives, political stability and low telecommunication costs also make the Austrian business climate favourable. Generally, the Austrian government favours FDI targeting the high-tech sector. Another attractive factor is Austria's accommodating commercial taxation system, which is one of the most favourable in Europe, as it does not have a wealth tax or professional tax. The Austrian economy is well equipped to grow at a steady pace over the next 10 years with real GDP growth set to outperform relative to the eurozone. With more than 50% of its GDP attributed to exports, Austria's economy is closely tied to other European Union (EU) economies, especially that of Germany.

Sources: World Bank, Fitch Solutions

 

Major Economic/Political Events and Upcoming Elections

May 2016
Werner Faymann stepped down as chancellor and Social Democratic Party of Austria (SPÖ) leader and was replaced by Austrian Railways CEO Christian Kern, also of the SPÖ.

 

December 2016
Alexander Van der Bellen defeated Norbert Hofer in the re-run of the presidential election, gaining a larger margin of victory than in May.

 

October 2017
Federal elections saw the Conservative People's Party leader Sebastian Kurz became chancellor.

 

March 2019
The European Investment Bank (EIB) sanctioned EUR2.4 billion in new financing to improve public services, upgrade infrastructure and strengthen private sector investment in various European countries. Of the total, the bank would provide EUR905 million for five transport projects in Austria, France, Germany, Latvia and the Netherlands. The EIB would also finance the expansion of the 8km cross border Karawanken tunnel between Austria and Slovenia.

 

May 2019
Chancellor Sebastian Kurz was removed from his post following a no-confidence vote.

 

Setpember 2019

Legislative elections were held in Austria on September 29, 2019, to elect the 27th National Council, the lower house of Austria's bicameral parliament. The snap elections were called in the wake of the collapse of the ruling ÖVP—FPÖ coalition and the announcement of Vice Chancellor Heinz-Christian Strache's resignation in May 2019. ÖVP won the legislative election with 37.5% of the vote, winning 71 seats, while the second place SPÖ of Austria had 21.2% and 40 seats.

 

2019-2023
Austria is planning to invest EUR25 billion in rail, road and fibre-optic networks over 2019-2023, with the key focus being three rail tunnel projects. Rail will be the biggest contributing segment to construction growth.

 

2020
The Austrian Rural Development Programme 2014-2020 will develop agricultural, transport, energy and infrastructure with an expected investment of EUR15.4 billion by 2020.

Sources: BBC Country Profile – Timeline, Fitch Solutions

Major Economic Indicators
Graph: Austria GDP by sector (2018)
 
Graph: Austria GDP by sector (2018)
 
Graph: Austria GDP by sector (2018)
 
Graph: Austria GDP by sector (2018)
 
Graph: Austria unemployment rate
 
Graph: Austria unemployment rate
 
Graph: Austria current account balance
 
Graph: Austria current account balance
 

e = estimate, f = forecast
Sources: IMF, World Bank, Fitch Solutions
Date last reviewed: October 29, 2019

External Trade

Merchandise Trade

Graph: Austria merchandise trade
 
Graph: Austria merchandise trade
 
 

Source: WTO
Date last reviewed: October 29, 2019

Graph: Austria major export commodities (2018)
 
Graph: Austria major export commodities (2018)
 
Graph: Austria major export markets (2018)
 
Graph: Austria major export markets (2018)
 
Graph: Austria major import commodities (2018)
 
Graph: Austria major import commodities (2018)
 
Graph: Austria major import markets (2018)
 
Graph: Austria major import markets (2018)
 

Sources: Trade Map, Fitch Solutions
Date last reviewed: October 29, 2019

 

Trade in Services

Graph: Austria trade in services
 
Graph: Austria trade in services
 
 

e = estimate
Source: WTO
Date last reviewed: October 29, 2019

Trade Policies
  • Austria joined the World Trade Organization (WTO) in January 1995 and has been a member of the General Agreement on Tariffs and Trade since 1951. The country is also a member state of the EU. All EU member states are WTO members, as is the EU in its own right.

  • Austria applies the EU's Common External Tariff, which means goods manufactured and imported from within the EU are not subject to customs charges. The average tariff rate for EU states is 1.5%, which is among the lowest globally. The duties for non-European countries are also relatively low, especially for manufactured goods (4.2% on average). However, textile, clothing items (high duties and quota system) and food-processing sectors (average duties of 17.3% and numerous tariff quotas) still see protective measures. Most of the country's major trade partners are within the EU, hence risks are less pronounced.

  • Austria is well embedded in Germany's export supply chain, where over one-third of its export produce is headed. Therefore, economic growth in Germany will be of particular importance to Austria's external sector.

  • Austria's export industry is mainly focused on Europe, consuming almost 80% of domestic exports on average. In 2018, the United States accounted for 6.4% of Austria's exports. Therefore, in an effort to boost and diversify trade, improving trade routes, especially to the fast-expanding emerging economies in Asia, is becoming a priority. To this end, the Austrian Federal Railways (ÖBB), along with national rail counterparts in Russia, Slovakia and Ukraine, has formed a joint venture company to link Europe with East Asia along broad gauge freight lines, with Vienna to become a major rail freight hub. The new cargo line promises to be quicker and more environmentally friendly than road and sea routes, saving up to 20 days on goods moving to and from Japan, China or South Korea. A key project phase is the EUR6.7 billion 400km line to connect Slovakia and Vienna, which is moving through planning. Once environmental impact and other assessments in the two countries have been completed, the project is expected to take eight years to construct.

  • The EU has imposed various anti-dumping measures on a wide range of products, predominantly in the areas of textiles, parts, steel, iron and machinery on goods coming from China and a few other Asian nations to protect domestic industries.

  • In 2016, the European Commission (EC) introduced an import licensing regime for steel products exceeding 2.5 tonnes. The regulation will be active until May 15, 2020.

  • In March 2016, the EC imposed a definitive countervailing duty (8.7% or 9.0%) on imports consisting largely of textile products originating in India.

  • On January 1, 2017, the EU imposed additional import duties on certain fruit and vegetables if the quantity of the goods exceeds the trigger volume level within the specified application period.

  • On November 15, 2017, the EC allocated a total value of EUR62 million (USD74.4 million) for funding promotional campaigns of EU agricultural products implemented in the internal market for 2018. The budget consists of various promotional topics of EU goods in the internal market with an additional focus on the promotion of fruit, vegetables and sheep or goat meat.

  • In total, the EU imposes 39 unique anti-dumping measures, affecting 19 states. China has the largest number of anti-dumping provisions against it. Tariff lines are relatively fewer, with only 23 tariffs applicable to imports.

Sources: WTO – Trade Policy Review, Fitch Solutions

Trade Agreements

Multinational Trade Agreements

Active

  1. The EU Common Market: The transfer of capital, goods, services and labour between member nations enjoy free movement. The common market extends to the 28 member nations of the EU, namely Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom.

  2. European Economic Area (EEA)-European Free Trade Association (EFTA) (Iceland, Liechtenstein, Norway and Switzerland): While it enhances trade flows between these countries and the EU, only Switzerland is a fairly major trading partner.

  3. EU-Turkey: The customs union within the EU provides tariff-free access to the European market for Turkey, benefitting both exporters and importers.

  4. EU-Japan Economic Partnership Agreement (EPA): In July 2018, the EU and Japan signed a trade deal that promises to eliminate 99% of tariffs that cost businesses in the EU and Japan nearly EUR1 billion annually. According to the EC, the EU-Japan EPA will create a trade zone covering 600 million people and nearly a third of global GDP. The result of four years of negotiation, the EPA was finalised in late 2017 and came into force on February 1, 2019 after the EU Parliament ratified the agreement in December 2018. The total trade volume of goods and services between the EU and Japan is an estimated EUR86 billion. The key parts of the agreement will cut duties on a wide range of agricultural products, while seeking to open up services markets – particularly financial services, e-commerce, telecommunications and transport. Japan is the EU's second biggest trading partner in Asia after China. EU exports to Japan are dominated by motor vehicles, machinery, pharmaceuticals, optical and medical instruments, and electrical machinery.

  5. EU-SADC EPA (Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland): An agreement between EU and SADC delegations was reached in 2016 and is fully operational for SADC members following the ratification of the agreement by Mozambique. The remaining six members of SADC included in the deal (the Democratic Republic of the Congo, Madagascar, Malawi, Mauritius, Zambia and Zimbabwe) are seeking economic partnership agreements with the EU as part of other trading blocs – such as with East or Central African communities.

Provisionally Active

The Comprehensive Economic and Trade Agreement (CETA): The CETA is an agreement between the EU and Canada. CETA was signed in October 2016 and ratified by the Canadian House of Commons and EU Parliament in February 2017. However, the agreement has not been ratified by every European state and has only provisionally entered into force. CETA is expected to strengthen trade ties between the two regions, having come into effect in 2016. Some 98% of trade between Canada and the EU will be duty free under CETA. The agreement is expected to boost trade between partners by more than 20%. CETA also opens up government procurement. Canadian companies will be able to bid on opportunities at all levels of the EU government procurement market and vice versa. CETA means that Canadian provinces, territories and municipalities are opening their procurement to foreign entities for the first time, albeit with some limitations regarding energy utilities and public transport.

Ratification Pending

  1. EU-Central America Association Agreement (Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Belize and the Dominican Republic): An agreement between the parties was reached in 2012 and is awaiting ratification (29 of the 34 parties have ratified the agreement as of October 2018). The agreement has been provisionally applied since 2013.

  2. EU-Singapore Free Trade Agreement (EUSFTA): On February 13, 2019, the European Parliament passed the agreement which would see the creation of the EUSFTA. However, before the agreement is implemented, all the states involved will need to ratify it through their individual legislatures; in this case, the FTA may become provisionally active along the lines of states which have already ratified the agreement.

Under Negotiation

  1. EU-Australia: The EU, Australia's second largest trade partner, has launched negotiations for a comprehensive trade agreement with Australia. Bilateral trade in goods between the two partners has risen steadily in recent years, reaching almost EUR48 billion in 2017, and bilateral trade in services added an additional EUR27 billion. The negotiations aim to remove trade barriers, streamline standards and put European companies exporting to or doing business in Australia on equal footing with those from countries that have signed up to the Trans-Pacific Partnership or other trade agreements with Australia. The Council of the EU authorised opening negotiations for a trade agreement between the EU and Australia on May 22, 2018.

  2. EU-United States (Trans-Atlantic Trade and Investment Partnership): This agreement was expected to increase trade and services, but it is unlikely to pass under the Trump administration in the United States against the backdrop of rising global trade tensions.

  3. EU-Vietnam FTA: In July 2018, the EU and Vietnam agreed on final texts for the EU-Vietnam FTA and the EU-Vietnam Investment Protection Agreement (IPA). As of March 2019, the final text of the agreement has been finalised and is awaiting signature and conclusion.

Sources: WTO Regional Trade Agreements database, Fitch Solutions

Investment Policy

Foreign Direct Investment

Graph: Austria FDI stock
 
Graph: Austria FDI stock
 
Graph: Austria FDI flow
 
Graph: Austria FDI flow
 

Source: UNCTAD
Date last reviewed: October 29, 2019

 

Foreign Direct Investment Policy

  1. The Austrian government welcomes FDI, particularly when such investments have the potential to create new jobs, support advanced technology fields, promote capital-intensive industries and enhance links to research and development.

  2. Austria's national investment promotion company, the Austrian Business Agency (ABA), is the first point of contact for foreign companies aiming to establish their own business in Austria. It provides comprehensive information about Austria as a business location, identifies suitable sites for greenfield investments and consults in setting up a company. ABA provides its services free of charge.

  3. The Austrian government may impose performance requirements when foreign investors seek financial or other assistance from the government, although there are no performance requirements to apply for tax incentives. There is no requirement that Austrian nationals must hold shares in foreign investments or for technology transfer, and no requirement for foreign investors to use domestic content in the production of goods or technology.

  4. In order to register a new company, or open a subsidiary in Austria, a company must first be listed on the Austrian Companies' Register at a local court. The next step is to seek confirmation of registration from the Austrian Federal Economic Chamber (WKO) to establish that the company is really a new business. The investor must then notarise the 'declaration of establishment', deposit a minimum capital requirement within an Austrian bank, register with the tax office, register with the district trade authority, register employees for social security and register with the municipality where the business will be located. Membership in the WKO is mandatory for all businesses in Austria.

  5. Austrian agencies do not press investors to keep investments in the country, but the WKO carries out annual polls among its members to measure their satisfaction with the business climate, thus providing early warning to the government of problems investors have identified.

  6. In Austria, tax incentives are currently restricted to a few causes (predominantly fire brigades, donations to social causes, science, research and development, conservation and the arts).

  7. Continued momentum for reform, following the changes made in 2016, will be a key part of Austria's growth story over the next decade. The government's January 2016 reforms lowered the lowest income tax rate from 36.5% to 25.0%, and the highest rate of 50.0% was adjusted to apply to incomes of more than EUR90,000, from EUR60,000 previously. Part of the reform package also entitles non-financial corporations to cash credits (12.0%) on research and development expenses.

  8. In April 2019, Austria’s government announced that it will soon finalise plans to raise more than EUR200.0 million in taxes from internet businesses. The three-pronged tax package, first flagged in January, 2019, includes a 5% tax on advertising sales that targets companies such as Alphabet’s Google or Facebook. There is now a requirement for online platforms such as Airbnb to report the transactions they arrange to Austrian tax authorities and to be liable if landlords do not tax their rental income. Two thirds of the foreseeable revenue is expected to come from online retailers from non-EU countries such as Alibaba Group Holding. They will have to pay VAT for low-value goods as an exemption for orders below EUR22 is phased out.

  9. The government's initiative to cut Austria's banking tax in 2016 to revive credit growth will provide further positive impulses for the economy. In exchange for a one-off payment (the amount has yet to be disclosed), Austrian banks will be able to deduct their contributions to the EU bank resolution and deposit guarantee fund. Before the banking tax reform, Austrian banks were faced with one of the highest tax rates in the EU, impeding banking profitability.

  10. Austria offers financial and tax incentives (within EU competition policy limits) to firms undertaking projects in economically underdeveloped areas. In most of these areas, eligibility for co-financing subsidies under EU regional and cross-border programmes has gradually declined under the EU's financial frameworks, but subsidies could account for up to EUR200 million per year (mainly for rural areas) within the EU Common Strategic Framework for the period 2014 to 2020.

  11. Austria's Wirtschaftsservice (AWS) is the government institution that provides financial incentives for businesses.

  12. Financial incentives provided by Austrian federal, state and local governments to promote investments are equally available to domestic and foreign investors and include tax incentives, preferential loans, loan guarantees and grants. Most incentives are targeted to investments that meet specified criteria, including job creation and use of cutting-edge technology. Tax allowances for advanced employee training and research and development expenditures are also available, as are financing options for start-ups and cash grants.

  13. The Austrian Labour Market Service (AMS) offers grants for job creation and personnel development training.

  14. There are no sectoral or geographic restrictions on foreign investment. American investors have not complained of discriminatory laws against foreign investors. Corporate taxes are relatively low (25% flat tax) and a tax reform implemented in 2016 aims to further stimulate the economy. Citizens and investors have reported that it is difficult to establish and maintain banking services since the Foreign Account Tax Compliance Act Agreement came into force in 2014, as some Austrian banks have been reluctant to take on this reporting burden.

  15. Potential investors should factor in Austria's strict environmental regulations and environmental impact assessments into their investment decision-making. The requirement that over 50% of energy providers must be in public hands creates a potential additional burden for investments in the energy sector. Strict liability and co-existence regulations in the agricultural sector restrict research and virtually outlaw the cultivation, marketing, or distribution of biotechnology crops. This situation is unlikely to improve for biotech producers under the new coalition government.

  16. There is no principal limitation on establishing and owning a business in Austria. A local managing director must be appointed to any newly-started enterprise. For non-EU citizens to establish and own a business, the Austrian Foreigner's Law mandates a residence permit that includes the right to run a business. Many Austrian trades are regulated, and the right to run a business in many trades sectors is only granted when certain preconditions are met, such as certificates of competence, and recognition of foreign education.

  17. There are no limitations on ownership of private businesses. Austria maintains an investment screening process for takeovers of 25% or more in the sectors of national security and public services, such as energy and water supply, telecommunication, and education services, where the Austrian government retains the right of approval. The screening process has been rarely used since its introduction in 2012.

  18. Austria has bilateral investment treaties (BITs) in force with the following countries: Albania, Algeria, Argentina, Armenia, Azerbaijan, Bangladesh, Belarus, Belize, Bosnia-Herzegovina, Bulgaria, Chile, Mainland China, Croatia, Cuba, Czech Republic, Egypt, Estonia, Ethiopia, Georgia, Guatemala, Hong Kong, Hungary, India, Iran, Jordan, Kazakhstan, South Korea, Kuwait, Latvia, Lebanon, Libya, Lithuania, North Macedonia, Malaysia, Malta, Mexico, Moldova, Mongolia, Montenegro, Morocco, Namibia, Oman, Paraguay, Philippines, Poland, Romania, Russia, Saudi Arabia, Serbia, Slovakia, Slovenia, Tajikistan, Tunisia, Turkey, Ukraine, United Arab Emirates, Uzbekistan, Vietnam and Yemen. BITs with Cambodia, Kyrgyzstan, Nigeria and Zimbabwe have been signed, but have not yet entered into force.

Sources: US State Department, ABA, Fitch Solutions

 

Free Trade Zones And Investment Incentives

Free Trade Zone/Incentive Programme Main Incentives Available
Research and development (R&D) incentives - R&D costs are fully deductible at the time they accrue.

- A R&D premium of 14% may be claimed for R&D activities performed in Austria.

- In order to receive the current R&D premium of 14%, an expert report (issued by the Austrian research promotion organisation) is required. The report confirms the nature of the expenses in question as R&D expenses.

- The R&D premium is also available in the case of contract R&D; however, R&D incentives cannot be claimed by both principal and agent (the agent is only able to apply for the premium if the principal does not). In case of contract R&D, the privileged R&D costs are capped at EUR1 million per year.

- Austria has no 'patent box regime'.

Sources: National sources, Fitch Solutions

Taxation – 2019
  • Value Added Tax: 20%
  • Corporate Income Tax: 25%

Source: Austria Ministry of Finance

 

Important Updates to Taxation Information

  • The Annual Tax Act of 2018 introduced new controlled foreign corporation rules for permanent establishments (applicable to business years starting from January 1, 2019), overriding the rules of treaties and permanent establishments. This is designed to limit artificial deferral of tax by using offshore lower-tax avenues. In May 2019, the Austrian Ministry of Finance published a draft bill for the Tax Reform Act I 2019/20.

  • According to the draft bill of the Tax Reform Act I 2019/20, the reduced VAT rate of 10% shall apply for e-books and e-papers as of January 1, 2020.

 

Business Taxes

Type of Tax Tax Rate and Base
Corporate Income Tax 25%
Capital Gains Tax Same rate as ordinary income
VAT Standard rate: 20%, a certain limited range of goods and services is taxed at the reduced rate of 10% (for items such as books, food, restaurants, passenger transportation, medicines) or 13% (eg, animals, seeds and plants, cultural services, museums, zoos, film screenings, wood, domestic air travel, athletic events); certain other transactions are exempted from Austrian VAT (eg, export transactions)
Stability fee for banks A stability fee for financial institutions is charged at 0.024% based on balance sheet totals of over EUR300.0 million to EUR20.0 billion and 0.029% on balance sheet totals over EUR20.0 billion. In addition, a special payment based on the balance sheet totals of the financial year ending in 2015 has to be made in installments from 2017 to 2020. The special payment amounts to 0.211% of the balance sheet totals of over EUR300.0 million to EUR20.0 billion and 0.258% on balance sheet totals over EUR20.0 billion.
Real Estate Tax Tax rate on agricultural area and forestry:

0.16% for the first EUR3,650 of the assessed standard ratable value.

0.2% for the amount of the assessed standard ratable value exceeding EUR3,650.

Tax rate on buildings and property: 0.2% of the assessed standard ratable value. This multiplier is reduced for single family houses and leasehold and shared property. After the assessed standard ratable value is multiplied by the relevant multiplier, the real estate tax is calculated by using a special municipal rate fixed by each municipality (maximum 500%). Finally, the tax amount is reduced by a general reduction of 25% as stated by law and increased by a 35% inflation adjustment.
Withholding Tax: dividends, interest and royalties 25% for businesses and 27.5% for other recipients for all profit distributions
Transfer Tax Acquisition tax of 3.5% of the consideration (plus 1.1% registration fee with the land register)
Payroll Tax: social security - Employer's contribution amounts to 21.48% of an employee's salary
- Employee contribution is 18.12% of gross salary, for a combined total of 39.6%

Sources: Austria Ministry of Finance, Bloomberg
Date last reviewed: October 29, 2019

Foreign Worker Requirements

General Localisation Requirements

If investors want to employ foreign workers in Austria, they will need to apply for a work permit with the AMS. The AMS only grants that permission if there is no comparable person in the pool of registered unemployed persons. This does not apply to senior management positions.

Austria offers several non-immigrant business visa classifications, including intra-company transfers/rotational workers and employees on temporary duty. The recruitment of long-term, overseas specialists or those with managerial duties is governed by a points-based immigration scheme to attract skilled workers and specialists in individual sectors (points are available for qualification, education, age and language skills). This Red-White-Red card (RWR) model has been designed to allow firms to react flexibly to rising demand for talent in different occupations. It is available to highly qualified individuals, qualified specialists/craftsmen in certain understaffed professions (qualified labour and registered nurse jobs) and key personnel or professionals. Applicants must have an offer of employment to apply for the RWR. Highly qualified individuals may apply locally in Austria, or opt to find a potential employer from abroad and have the company apply in Austria on their behalf. Austrian immigration law requires those applying for residency permits to take German language courses and exams. The Austrian government in 2017 introduced a law that introduces a specific visa category under the RWR model for founders of start-up enterprises to support Austria's push to expand its innovation economy.

 

Social Security

Social insurance is compulsory in Austria and comprises health insurance, old-age pension insurance, unemployment insurance and accident insurance. Employers and employees contribute a percentage of total monthly earnings to a compulsory social insurance fund. Austrian laws closely regulate terms of employment including working hours, minimum vacation time, holidays, maternity leave, statutory separation notice, severance pay, dismissal and an option for part-time work for parents with children under the age of seven. Problematic areas include increased deficits in the pension and health insurance systems, the shortage of personnel to care for the increasing number of elderly people and escalating costs for retirement and long-term care. Due to employer contributions to social insurance for employees, paid leave, paid sick leave, fringe benefits and so forth, additional wage costs in Austria add up to about 70% of gross pay.

 

General European Union Work Permit

EU member citizens do not require a work permit, but their employer must inform the job office about their employment. Citizens of the EEA (with EU member states, Iceland, Norway and Lichtenstein) and Switzerland do not require a visa to enter, reside or work in the country.

No work permit is needed by foreigners from outside the EU if they have a permanent residence or family reunion permit, have been granted asylum, study in the country or have blue or green cards. Since the beginning of 2014, citizens of Romania and Bulgaria also enjoy free labour market access. For Croatian nationals, certain restrictions regarding work permits are still in place.

 

EU Blue Card

This type of residence and work permit allows highly qualified non-EU citizens to live and work in Austria for up to two years. It is tied to a confirmed job offer and will only be granted if the AMS is satisfied that no Austrian or EU citizen is available to do the work specified. A foreigner holding a blue card may reside in the country and work in the job for which the blue card was issued, or change that job under the conditions defined.

Only applicants who have completed a university degree course of at least three years are eligible for a Blue Card. Their qualifications must match the job profile and the salary specified in the work contract must be 1.5 times higher than the average yearly income of full-time employees in Austria. The figures are published regularly by Statistik Austria.

 

The Red-White-Red Card

Non-EU citizens who qualify as 'key workers' can apply for a RWR, which allows them to work for a specified employer and live in Austria for a period of 12 months. In order to qualify as a key worker, one must be highly qualified, a skilled worker in a shortage occupation, a self-employed key worker, or a graduate of an Austrian university. The RWR works on a points-based system.

After 10 months of working and living in Austria, RWR holders may apply for a RWR plus, which entitles them to free access to the Austrian labour market. Family members of RWR or of Blue Card holders are also eligible to apply for a RWR plus.

Risks

Sovereign Credit Ratings

  Rating (Outlook) Rating Date
Moody's Aa1 (Stable) 25/05/2018
Standard & Poor's AA+ (Stable) 29/01/2013
Fitch Ratings AA+ (Positive) 31/05/2019

Sources: Moody's, Standard & Poor's, Fitch Ratings

 

Competitiveness and Efficiency Indicators

  World Ranking
2018 2019 2020
Ease of Doing Business Index 22/190 26/190 27/190
Ease of Paying Taxes Index 39/190 40/190 44/190
Logistics Performance Index 4/160 N/A N/A
Corruption Perception Index 14/180 N/A N/A
IMD World Competitiveness 18/63 N/A N/A

Sources: World Bank, IMD, Transparency International

 

Fitch Solutions Risk Indices

  World Ranking
2017 2018 2019
Economic Risk Index N/A 9/202 6/201
Short-Term Economic Risk Score 75.4 75.0 72.9
Long-Term Economic Risk Score 75.6 77.3 78.8
Political Risk Index N/A 9/201 9/201
Short-Term Political Risk Score 83.5 85.6 86.5
Long-Term Political Risk Score 89.5 89.5 89.5
Operational Risk Index N/A 13/201 13/201
Operational Risk Score 74.3 74.7 74.4

Source: Fitch Solutions
Date last reviewed: October 29, 2019

 

Fitch Solutions Risk Summary

ECONOMIC RISK

The economy is likely to cool somewhat in 2020 amid weakening domestic demand and lingering external headwinds. Slowing momentum in the European Union, protracted trade tensions and Brexit are weighing on the external sector. However, the new government has fiscal space to spur the economy if it decides to do so. That said, Austria's economy will continue outperforming the wider eurozone. Private consumption and gross fixed capital formation are likely to be the main drivers of growth, while the government is in a reasonable position to offset a larger slowdown with fiscal stimulus if necessary. Austria's banking and financial services market is well developed and comprises a relatively diverse mix of domestic, regional and some global banks, large asset management companies and competitive insurance providers. The banking sector has stabilised over recent years having reduced exposure to bad debts. While growth in the domestic market is slow, access to faster growing regional markets should boost prospects.

OPERATIONAL RISK

Austria's economy features a large service sector, a sound industrial sector and a small, but highly developed, agricultural sector. The Austrian economy has greatly benefited from its strong commercial relations to the Central and Eastern Europe (CEE) region, specifically in the banking and insurance sectors. Austria has traditionally attracted a significant amount of foreign direct investment owing to its geographical location as an intersection of Eastern and Western Europe. The country's business environment ranks among the top 10th percentile globally due to its strong logistics profile, solid legal and security environments and investor-friendly trade and investment policies. Austria's large and competitive manufacturing sector as well as highly developed service industry equips the economy well to grow at a robust pace over the coming decade. The main headwinds the country will face arise from stalling reform momentum, a rigid labour market and rising competition from neighbouring CEE.

Source: Fitch Solutions
Date last reviewed: October 29, 2019

 

Fitch Solutions Political and Economic Risk Indices

Graph: Austria short term political risk index
 
Graph: Austria short term political risk index
 
Graph: Austria long term political risk index
 
Graph: Austria long term political risk index
 
Graph: Austria short term economic risk index
 
Graph: Austria short term economic risk index
 
Graph: Austria long term economic risk index
 
Graph: Austria long term economic risk index
 

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Economic and Political Risk Indices
Date last reviewed: October 29, 2019

 

Fitch Solutions Operational Risk Index

  Operational Risk Labour Market Risk Trade and Investment Risk Logistics Risk Crime and Security Risk
Austria Score 74.4 60.8 71.9 83.5 81.5
Developed States Average 72.6 64.6 71.3 77.1 77.4
Developed States Position (out of 27) 11 16 16 6 10
Global Average 49.7 50.3 49.8 49.3 49.2
Global Position (out of 201) 13 36 23 6 12

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Operational Risk Index

Graph: Austria vs global and regional averATes
 
Graph: Austria vs global and regional averATes
 
Country/Region Operational Risk Index Labour Market Risk Index Trade and Investment Risk Index Logistics Risk Index
 
Crime and Security Risk Index
Denmark 80.4 74.8 76.2 88.5 82.3
Netherlands 78.8 75.1 77.6 79.3 83.2
Switzerland 78.4 66.0 78.2 88.8 80.7
Sweden 77.9 81.3 75.3 85.8 69.3
New Zealand 77.8 67.7 78.1 86.7 78.6
United Kingdom 77.6 73.7 75.7 72.8 88.3
United States 76.7 71.4 79.0 78.2 78.2
Norway 76.6

74.3

75.4 75.1 81.6
Canada 76.3 64.0 72.2 81.2 87.9
Finland 74.6 55.8 74.1 84.7 83.7
Austria 75.4 60.8 71.9 83.5 81.5
Luxembourg

73.5

66.8 78.0 70.4 79.0
Japan 73.4 54.2

77.6

82.4 79.3
Ireland 72.2 65.5 69.0 80.8 73.6
Germany 72.0 67.8 72.1 68.3 79.9
Australia 71.7 72.4 65.5 77.5 71.5
Spain 71.6 60.1 71.1 82.6 72.8
France 71.6 59.8 78.1 65.0 83.2
Belgium 71.4 60.6 67.2 69.9 88.1
Portugal 71.2 59.4 68.9 80.5 76.0
Iceland 71.1 58.2 72.8 82.3 71.1
Liechtenstein 69.6 51.7 66.5 81.6 78.4
Israel 67.6 69.1
 
62.4

56.6

82.4
Malta 67.2 71.4 64.6 70.1 62.7
Isle of Man 65.1 54.9 69.0 62.9 73.7
Italy 63.6 54.5 59.7 76.1 64.3
Greece 58.2 54.2 49.2 69.8 59.6
Regional Averages 72.6 64.6 71.3 77.1 77.4
Emerging Markets Averages 46.9 48.5 47.4 45.8 45.9
Global Markets Averages 49.7 50.3 49.8 49.3 49.2

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Operational Risk Index
Date last reviewed: October 29, 2019

Hong Kong Connection

Hong Kong’s Trade with Austria
 

Graph: Major export commodities to Austria (2018)
 
Graph: Major export commodities to Austria (2018)
 
Graph: Major import commodities from Austria (2018)
 
Graph: Major import commodities from Austria (2018)
 

Note: Graph shows the main Hong Kong exports to/imports from Austria (by consignment)
Date last reviewed: May 13, 2019

Graph: Merchandise exports to Austria
 
Graph: Merchandise exports to Austria
 
Graph: Merchandise imports from Austria
 
Graph: Merchandise imports from Austria
 

Note: Graph shows Hong Kong exports to/imports from Austria (by consignment)
Exchange Rate HK$/US$, average
7.76 (2014)
7.75 (2015)
7.76 (2016)
7.79 (2017)
7.83 (2018)
Sources: Hong Kong Census and Statistics Department, Fitch Solutions
Date last reviewed: October 29, 2019

  2018 Growth rate (%)
Number of Austrian residents visiting Hong Kong 30,324 -2.8

Sources: Hong Kong Tourism Board, United Nations Department of Economic and Social Affairs – Population Division

  2018 Growth rate (%)
Number of European residents visiting Hong Kong 1,961,448 1.7

Sources: Hong Kong Tourism Board, United Nations Department of Economic and Social Affairs – Population Division
Date last reviewed: October 29, 2019

 

Commercial Presence in Hong Kong

  2018 Growth rate (%)
Number of EU companies in Hong Kong N/A N/A
- Regional headquarters 452
- Regional offices 709
- Local offices 948

 

Treaties and agreements between Hong Kong and Austria

Austria and Hong Kong signed a comprehensive double tax agreement in May 2010, with the agreement effective from July 2013.

Source: Hong Kong Inland Revenue Department

 

Chamber of Commerce or Related Organisations

The Austrian Chamber of Commerce Hong Kong

Address: GPO Box 8031, Central, Hong Kong

Email: austrocham@austrocham.com

Tel:  (852) 3105 0152

Fax: (852) 3105 995

Source: The Austrian Chamber of Commerce Hong Kong

 

Consulate General of Austria in Hong Kong

Address: Room 2201, Chinachem Tower, 34-37 Connaught Road, Central, Hong Kong

Email: hongkong-gk@bmeia.gv.at

Tel: (852) 2522 8086

Fax: (852) 2587 7331

Source: Protocol Division Government Secretariat

 

Visa Requirements for Hong Kong Residents

HKSAR passport holders can travel to the Schengen Zone without a visa. They can travel for tourism and business purposes and remain in the region for a period of up to 90 days.

Source: Visa on Demand

Date last reviewed: October 29, 2019

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