AUSTRIA Law and Practice Contributed by: Christoph Urbanek, Irena Gogl-Hassanin and Mario Schiavon, Urbanek Law
5.5 Applicable Governance Requirements
AGs and GmbHs are subject to a 25% corpo - rate tax, while OGs and KGs are tax-transparent, meaning profits are taxed at the partners’ per - sonal income tax rates. Real estate companies benefit from depreciation allowances to reduce taxable income. AGs and GmbHs also enjoy more favourable capital gains tax treatment on dividends and share sales. Start-up costs include incorporation, notary and ongoing accounting and administration, with partnerships generally incurring lower opera - tional costs than corporations. 5.3 REITs A real estate investment trust (REIT) allows investors to invest in real estate without direct ownership. Public REITs are traded on stock exchanges and open to a wide range of inves - tors, including foreign ones, with no major restrictions. REITs offer tax benefits, particularly exemptions on income from rents and property sales, if at least 90% of income is distributed to shareholders. To qualify, a REIT must invest at least 75% of its assets in real estate, distrib - ute 90% of income and comply with tax rules, including limits on ownership concentration. 5.4 Minimum Capital Requirement The minimum capital requirements for setting up companies that invest in real estate vary depending on the type of company. A minimum capital of EUR70,000 is required for a joint-stock company (AG), of which at least 50% must be paid up at the time of incorporation. For a limited liability company (GmbH), the minimum capital is EUR35,000, of which at least EUR17,500 must be paid up at the time of formation. There are no fixed minimum capital requirements for a general partnership (OG) or a limited partnership (KG), but the partners must provide sufficient equity to ensure the liability and financing of the company.
Governance requirements for real estate compa - nies in Austria depend on their legal form. GmbHs need a managing director, while AGs require a management and supervisory board. Both must hold annual meetings and submit financial state - ments to the commercial register. Partnerships such as OGs or KGs are tax-transparent, with profits taxed at the partner level. US investors face additional obligations under the Corporate Transparency Act, which requires disclosure of beneficial owners of foreign companies operat - ing in the US, including those investing in Aus - tria. This increases compliance duties, especially regarding ownership transparency. 5.6 Annual Entity Maintenance and Accounting Compliance The annual costs for corporate governance and accounting compliance for real estate invest - ments depend on the type of company used. • For a GmbH ( Gesellschaft mit beschränkter Haftung ) the annual accounting, tax advisory and compliance costs are typically between EUR3,000 and EUR7,000, depending on the complexity of the transactions and the num - ber of books to be kept. • For an AG ( Aktiengesellschaft ) the costs may be around EUR5,000 to EUR15,000 per year due to the higher administrative requirements and greater corporate governance. • An Offshore ( Offene Gesellschaft ) or KG ( Kommanditgesellschaft ) tends to be cheaper to administer, with annual costs of around EUR2,000 to EUR5,000, although the com - plexity of the accounting and tax returns also plays a role here. In addition, there may be costs for annual finan - cial statements, tax returns and company meet -
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