Guidance

Overseas business risk: Austria

Updated 16 February 2021

1. Political and economic

Austria is a Federal Republic in which executive authority is divided between 9 provinces and the federal bodies in Vienna. There is a provincial assembly and government in each of the provinces. The federal parliament consists of two chambers: the ‘Nationalrat’ and the ‘Bundesrat’. Members are directly elected to the Nationalrat for a 5-year term. Members of the Bundesrat are elected by the provincial assemblies for a 5-year term (with the exception of the province of Upper Austria, where they are elected for a 6-year term).

Austria tends to be governed by a coalition government. The current government was elected in September 2019 and is a coalition of conservative ÖVP and the Green Party.

Austria has been a member of the European Union since January 1995 and of the EMU since January 2001, is a member of the UN, hosts a number of UN agencies as well the Secretariat of the Organisation for Security and Cooperation in Europe (OSCE), the Organisation of the Petroleum Exporting Countries (OPEC) and the European Union Fundamental Rights Agency. Since 1955, Austria has been a neutral state and offers stable government.

There are 9.1 million inhabitants in Austria (January 2023). More than one fifth of Austria’s population lives in Vienna, which is the second largest German-speaking city in the world, behind Berlin. Other major towns include Graz, Linz, Salzburg and Innsbruck all having more than 120,000 inhabitants. Currently unemployment is running at 5.1% (March 2023 ILO) and the labour market has recovered from the COVID-19 shock. The labour market is tight with a marked shortage of skilled labour and a historic high of on average 206,000 open jobs over the course of 2022, approaching twice the pre-pandemic vacancy levels.

The Gross Domestic Product (GDP) in Austria increased by 5% YoY in 2022, following a growth of 4.6% in the previous year. The GDP per capita is EUR 45,370 (2021). Austria’s fiscal position has worsened as a result of the pandemic with a deficit of -3.2% of GDP in 2022, already down from the high of –8% in 2021. In tandem the debt to GDP ratio at 78.4% in 2022 is also falling again, down from 82.9% in 2021. Inflation is the main economic preoccupation, rising to the highest level since 1974 at 8.6% for the year 2022 as a whole (2.8% in 2021) (Statistik Austria).

Trade with other EU countries accounts for 65% of Austrian imports and exports, with Germany being by far the largest trading partner, accounting for around 1/3 of total Austrian trade. Austria exports 60.8% of its GDP (2022). Austrian trade was buoyant in 2022, with real export growth (goods and services) of 8.8%. According to the Austrian Annual Trade review (FIW Jahresgutachten), it is to be expected that the Russian war against Ukraine as well as the persistent high inflation will result in stagnation of trade for 2023. The trade deficit widened significantly in 2022 to almost -20 billion Euros (Statistik Austria), driven primarily by high energy import prices, which cancelled out gains from exports. Key export goods are machinery and equipment, motor vehicles and parts, manufactured goods, chemicals, iron and steel, and foodstuffs.

Austria is the biggest investor (per head of population) in the Central and Eastern Europe (CEE) region. Austrian banks and insurance companies have become market leaders in Austria’s eastern neighbouring countries which has also exposed them to risks due to a high rate of non-performing loans and other toxic assets. Significant numbers of Austrian firms have established manufacturing operations in the neighbouring states – as well as benefiting from Austria’s historic role as a trading partner. Austria is also home to 380 international companies who operate their CEE HQs from the country.

Foreign Direct Investment (FDI) in Austria saw a significant downturn in 2021, with inward flows negative for the first time since 2016 (-15.3bn Euros total active + passive), resulting in falling FDI stock (Austrian National Bank). Outward FDI also declined with outflows at –2.1 billion. Germany remains the largest investor with 30% of the USD 205 billion Capital Stock.

The World Bank Ease of Doing Business Index ranks Austria in 27th place (2020).

More information on political risk, including political demonstrations, is available in FCDO travel advice for Austria.

2. Human rights

The rule of law is upheld in Austria and there is effective democratic oversight and accountability.

Austrian employees have the right of assembly and membership of trade union organisations. The unions have the right to strike but Austria has traditionally had a very low strike rate, on average 0.3 days per annum per 1000 employees in 2020 (European Trade Union Institute). Employees are encouraged to play a role via elected representatives in the management of the organisations they work for. Austria has ratified all the major ILO conventions relating to fundamental rights.

Since January 2018, the supervisory boards of publicly traded companies and companies with more than 1,000 employees must consist of at least 30 percent women and 30 percent men. As a result, the share of women on supervisory boards of companies who fall under the quota has risen from 22.4 percent in January 2018 to 35.1 percent in January 2022 (Bundeskanzlersamt). The situation in terms of gender equality amongst senior management is different. In 2023, only 10.5% of Executive Board members in Austria’s 200 largest companies were women (Bundeskanzlersamt).

The government has adopted a National Action Plan for Combatting Human Trafficking and Austria was ranked as a Tier 1 Country on the Trafficking in Persons ranking in 2022.

3. Bribery and corruption

Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.

In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.

There is an Austrian governmental, independent organisation (Bundesamt fuer Korruptionspraevention und Korruptionsbekaempfung) which is fighting corruption in Austria. Any potential corruption cases can be reported to them. As in many Western countries the construction and infrastructure industries are considered to be those most prone to this type of misuse. Corruption in Austria is generally low. In 2022, Austria was ranked 22nd on the Transparency International Corruption Perception Index, a decrease of two positions on 2016. The past few years have seen a number of political scandals including accusations of corruption and the purchase of political influence by high-ranking political figures. There are ongoing legal cases.

Read the information provided on our bribery and corruption page.

4. Terrorism threat

Read the information provided on our terrorism threat page.

5. Protective security advice

The Centre for the Protection of National Infrastructure also provides protective security advice to businesses.

There is a low rate of crime in Austria, but petty crime does occur. Visitors are advised to take sensible precautions such as not leaving valuables unattended and being vigilant around major public transport hubs, especially after dark. Visitors travelling on international trains to or from Austria should take precautions to avoid being robbed while they sleep. Read the information provided on our protective security advice page.

6. Intellectual property

Manufacturers and traders are strongly advised to patent their inventions and register their trademarks.

Application for Austrian patents for up to 20 years can be made at the Austrian Patent Office; smaller inventions are protected for up to 10 years. The Austrian Patent Office also accepts requests for European patents and forwards them to the headquarters of the European Patent Office in Munich, Germany. The Austrian Patent Office further assists with the registration of international patents.

The Austrian Patent Office can be contacted at the address below:

Patentamt
Dresdner Straße 87
Postfach 95
1200 Wien

Phone: +43 (0)1 534 24 0
Fax: +43 (0)1 534 24 535

Email: info@patentamt.at

Website: www.patentamt.at

Read the information provided on our intellectual property page.

7. Organised crime

As in many other European countries, international organised criminal activity takes place in Austria and is increasing. Often this is linked to people trafficking and drugs. The majority of crime bands are originating from outside Austria’s borders. The number of internet scams is constantly on the increase in Austria and often results in a financial loss for its victims. Austria is a transit country for illicit cigarettes travelling to markets in Germany, France and the United Kingdom.

As a member of the European Union, Austria is part of the Schengen zone.

8. Useful information

• exporting guide to Austria

• guide to setting up a business in Austria

9. Contact

Contact the DBT team in Austria for further information.