The 3 big Austria problems for a start-up company
If someone founds a start-up and it is supported by 50 people, Austria does not have a suitable legal form for this project.
50 shareholders can only be represented by a stock corporation, but this legal form is poisoned with 3 Austrian specialties. Of course, the dream is to get out of the start-up phase very quickly. But if success is delayed, the start-up stock corporation is quickly destroyed by these three Austrian specialties.
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The expulsion from Austria
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When GEMINI next Generation AG (Inc.) was founded in November 2022, a factory building was planned in the new industrial park in Unken. In January 2023, I was standing in the forest with an employee of the Salzburg settlement company: "You can build the factory building here from fall 2023".
In the fall of 2023, I learned that the new industrial estate was contested by the provincial environmental ombudsman's office due to rare lizards. How can you appeal to local patriotism in Unken and the surrounding area if the location is suddenly uncertain? Experience from the wind energy sector has shown that significant sums can be raised in this way. There was therefore no basis for this.
On February 19, 2025, I visited a company in Banská Bystrica. "We have found our Magna!". This meant that any reference to Austria was lost in the planned production. This company combines experience in all the construction techniques that are to be used in the GEMINI house: Foundation screws, steel frame and steel-PU sandwich outer wall. There is simply no equivalent to be found in Austria.
Austria is a paradise for notaries and auditors, but hell for start-ups. This was also known in 2022, but the Austrian connection and the hope of getting out of the start-up phase quickly prevailed in the decision. Now that the reference to Austria has been removed, it is time to draw the consequences.
- 3,500 € Minimum corporate income tax
- 6,000 or more for the economic-auditor to check a tiny mini-accounting system.
- 3,000 or more for the notary for a mini Annual General Meeting. The first Annual General Meeting in February 2024 cost € 5002.74. A cost estimate for an online Annual General Meeting was € 6,000.
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These crazy fixed costs need to be eliminated
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- No minimum corporate income tax
- Auditors only become mandatory from HUF 600 million, currently € 1,591,849.80, and are considerably cheaper than in Austria
- A general meeting is only subject to notarization if the articles of association are amended. "The general meeting is authorized" is therefore often used in the articles of association to avoid the notarial obligation in many foreseeable cases.
It's not just about the cost, it's extremely demotivating to have to find €6,000 for an economic-auditor to check a mini-account of 150 lines. Of course, I also looked for other auditors. It's as funny as looking for a cheap offer for an elevator before the EU Commission's antitrust fine in 2004.
How is that supposed to work? Just a few years ago, you would have had to rely on start-up service companies. Today there is Grok, the AI from X. It took me about 40 hours to draft the articles of association. There are several conceivable options for the company headquarters. All communication is digital, so the mailbox at the registered office does not need to be constantly monitored. See §1 (3) of the articles of association. |
