1E9Ct5D

- CHAPTER TWO -CORPORATE STRUCTURESICorporate Vehicles for Foreign InvestorsForeign investors favour theLimited Liability Company (GmbH: Gesellschaft mit beschränkter Haftung); and/orJoint Stock Corporation (AG: Aktiengesellschaft)as vehicles for investment in Austria or as a platform for business in the European Union,Eastern Europe, Russia and Central Asia. In addition to operational and business activities,these corporate vehicles can be used for holding purposes and for acting as regionalheadquarters.Other structures are available but are used by foreign investors only in unusual circumstanceswhich require special solutions. Amongst the other structures are branches of foreigncompanies, private foundations, cooperatives, limited and unlimited partnerships, Europeanstock corporations, European private companies and various other forms of businessorganisations and associations. Amongst those listed, the private foundation is sometimesused by foreign investors as an ultimate holding structure, in particular as an Austrianfoundation can be set up for either profit purposes or for non-profit purposes.II Basic principles of Austrian companiesThe attractions of Austria as a corporate location for setting up companies by foreigninvestors are as follows:No discrimination against foreign shareholders. Neither the nationality or residenceof foreign individuals, nor the place of incorporation or main place of management ofcorporate shareholders has any impact on their standing and rights as shareholders.They are treated equally with any Austrian shareholders. Restrictions are onlyapplied in line with any UN Security Council resolutions.No corporate law restrictions on foreign directors or office bearers of Austriancompanies. Their nationality and place of residence does not matter, and there areno restrictions on a foreign investor appointing himself director of an Austriancompany. However, care must be taken that the appointment of a foreign directordoes not result in the Austrian company having its main place of management inanother jurisdiction, thereby becoming tax resident in that jurisdiction in line withexisting tax treaties. In the absence of a bilateral tax treaty, an Austrian companywill always be considered tax resident in Austria, as internal Austrian tax law uses thestatutory seat of a company as its place of residence. Where a tax treaty applies thetest of the main place of management, a foreign investor acting as a director of anAustrian company is well-advised to have a second Austrian resident directordocumenting that the company is actually managed from Austria and not fromabroad. In such a setting it is possible for the foreign shareholder/director to havethe right of sole representation of the company while the Austrian resident directoronly represents the company together with another director.No official permission or accreditation required for setting up an Austrian company bya foreign investor, except for some specific businesses such as banks, financialservices, insurance, pension funds.No foreign investment control. Irrespective of the size of the investment, the foreigninvestor does not have to obtain any administrative consent or government approval.- 17 -