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Report prepared by U.S. Embassy Vienna, released by the Bureau of Economic and Business Affairs, August 1996
This Country Commercial Guide (CCG) represents a comprehensive look at Austria's commercial environment, using economic, political and market analysis. The CCGs were established by recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi-agency task force, to consolidate various reporting documents prepared for the U.S. business community. Country Commercial Guides are prepared annually at U.S. embassies through the combined efforts of several U.S. government agencies.
The Republic of Austria is a stable, affluent, parliamentary democracy located in the center of Europe, bordering Switzerland, Liechtenstein, Germany, Italy, Hungary, Slovenia, Slovakia, and the Czech Republic. Austria has a population of just over 8 million people, 92 percent of whom are German-speaking.
Austria has been a member of the European Union (EU) since January 1, 1995. Trade with EU countries accounts for over 60 percent of Austrian imports and exports. Expanding trade and investment in the emerging markets of Central and Eastern Europe is another major element of Austrian economic activity. As one of the most significant trading partners and investors in these markets, Austria stands to benefit greatly from its geographic, cultural, historical, and business ties to these markets in transition.
After a robust 3.0 percent real GDP growth rate in 1994, Austria registered only 1.8 percent economic growth in 1985. Growth forecasts for 1996-97 are in the 0.7 to 1.0 percent range. Lackluster growth prospects are primarily due to the negative impact on export sales of the weak growth of Austria's major trading partners, the government's austerity program, which has rigorously shortened public spending, and weak private consumption due to meager wage increases and worries about rising unemployment. The biggest challenge facing the Austrian government will be maintaining positive growth while reducing the budget deficit to meet Maastricht requirements for membership in the European Monetary Union (EMU).
The Austrian government welcomes foreign investment. There are no formal sectoral or geographic restrictions for foreign investors. Principal growth sectors include the service industries (except tourism) and high-tech manufacturing. In most business activities, 100 percent foreign ownership is permitted. Investment incentives are abundant. EU incentives cover approximately 41 percent of Austria's territory. In addition, financial incentives within EU parameters are offered by federal, provincial, and local governments. There are currently around 300 U.S. firms with subsidiaries, affiliates, or licensees in Austria, of which over half have operations in Central and Eastern Europe.
Qualified agents and distributors for almost every kind of product can be found in Austria. Many of these also cover Central and Eastern European markets. Approximately 2,000 U.S. firms are represented in Austria through agents and distributors. The most promising sectors for U.S. manufactured exports are primarily in the high-tech, high-value categories, and include computers and peripherals, computer software, drugs and pharmaceuticals, electronic components, aircraft and parts, industrial chemicals, medical equipment, telecommunications equipment, and pollution control equipment. The most important U.S. agricultural exports to Austria are tobacco and cotton, both of which can expect positive growth in coming years.
The Commercial Service - Vienna (CS-Vienna) assists U.S. firms interested in selling their products or services in Austria. This office fields questions, provides a variety of services including market analyses and agent/distributor searches, and organizes events such as information seminars highlighting U.S. technology, trade missions, match-making events, and joint "USA" booths at regional trade fairs. For information about specific programs, contact a U.S. Department of Commerce district office, a U.S. Export Assistance Center, or the CS-Vienna directly (phone: +43.1.313.39.2297, fax: +43.1.310.6917).
CS-Vienna also cooperates closely with other U.S. Commercial Service posts throughout Europe within the framework of the Showcase Europe program. All European posts are working together to strengthen the American presence in Europe, focusing on network-building, trans-border trade development, and advocacy. Austria plays a key role in this effort, especially as relates to the integration of the emerging economies of Central and Eastern Europe into the world economy.
II. Economic Trends And Outlook
A. Major Trends and Outlook
The Republic of Austria has an open economy, dependent on foreign trade and closely linked to the economies of other European Union (EU) member countries, particularly Germany. Following a robust 3.0 percent real GDP growth in 1994, Austria's economy expanded only 1.8 percent in 1995. Forecasts for 1996-97 call for continued slow growth of about 0.7-1.0 percent, but these figures may have to be revised downward due to the weakening economies of Austria's major trading partners. Little improvement is expected in 1997, as the Austrian government continues implementation of its austerity program. From 1996-2000, the Austrian economy is expected to grow at a moderate but steady annual rate of 1.8 percent. Private consumption growth will be moderate in 1996 and almost stagnate in 1997 due to modest wage increases, rising unemployment, and fiscal austerity. As a result of efforts to curb the budget deficit, government consumption is expected to stagnate in 1996 and shrink in 1997.
Austria's accession to the EU on January 1, 1995, has had a positive impact on foreign investment and growth by providing access to the single market and by fostering liberal policies to promote competition and dismantle protectionism. However, the high federal budget deficits that helped to spur economic growth in the past will now have to be reduced if Austria is to meet the Maastricht Treaty "convergence criteria" to join the European Monetary Union (EMU) and to adopt the single currency. The Austrian government's most challenging task in the coming years will be implementation of its austerity program and the successful execution of the 1996 and 1997 budgets, designed to reduce the public deficit to the level required under the "convergence criteria" (less than 3.0 percent of GDP) to be among the first tranche of countries to adopt the European single currency.
Other principal challenges facing the government will be to implement an ambitious privatization plan and to press ahead on the deregulation, liberalization, and restructuring of Austrian industry. Although Austria's economy has become more liberal and open, it is still characterized by rigidities, barriers to market entry, and an elaborate regulatory environment in certain sectors. A restructuring of Austrian industry is needed to attract more potential foreign partners and to meet increased competition from both EU and Central European countries. The manufacturing sector will have to shift from less competitive low-tech production towards more specialized value-added manufacturing. To improve efficiency and resource allocation, the service sector, particularly telecommunications, will have to be further deregulated and liberalized.
The economic opening of Central and Eastern Europe has had a stimulative effect on Austria's economy. Austrian firms have invested sizeable sums and continue to move labor intensive low-tech production to these countries. Although the big investment boom seems to be over for the present, Austria still has the potential to attract EU firms seeking convenient access to the emerging markets of Central and Eastern Europe.
The Austrian Schilling appreciated against the dollar and many other European currencies in 1994 and 1995, but the beginning of 1996 saw the trend reversing, with the dollar on the rise and some European currencies gaining ground.
U.S. exports to Austria rose 10.5 percent to attain an import market share of 4.4 percent in 1994. According to preliminary calculations, total Austrian exports grew 9-10 percent in 1995 and imports grew 7-8 percent. The accession of Austria to the EU has brought stiffer competition from European producers in some import markets. While some U.S. exporters, particularly those in the data processing hardware and semiconductor sectors, may face higher customs tariffs and contingent regulations, many U.S. exporters should benefit from lower EU tariffs.
B. Principal Growth Sectors
The principal growth sectors in Austria include high-tech manufacturing industries and most service industries (tourism excluded).
C. Government Role in the Economy
State-owned industries employ 15 percent of the industrial workforce and account for 20 percent of exports. However, ongoing privatization of state-owned industries, as well as EU policies to promote competition and reduce state subsidies, are expected to reduce the government's role in the economy. The federal railroads and the postal authority have been established as independent public-sector companies and no longer have access to the government budget. Plans for upcoming privatizations include companies such as Bank Austria, Creditanstalt Bank, Postal Savings Bank, Austrian Tobacco Works (Austria Tabakwerke), and Oesterreichische Salinen, the former salt monopoly company. These companies and shares of the newly reorganized Post und Telekom Austria (PTA) should be listed on the stock exchange within three years.
Despite the government's austerity program, taxes and mandatory social security contributions as a share of GDP will rise from 41.1 percent in 1995 to 43.4 percent in 1997 -- an all-time high. The 1996 budget projects a deficit of 3.7 percent of GDP. The entire 1996/97 austerity program assumes net savings of about AS 100 billion (USD 9.9 billion), with expenditure cuts making up two-thirds and additional tax revenues one-third of those savings. Reductions are concentrated in the civil service sector, with a cut in civil service positions and changes in the pension system, measures against early retirement and moderate pension increases, and freezing economic subsidies at the 1995 level. The measures also include some reductions in the previously "untouchable" social system, such as cuts in family allowances, cuts in spending for the care of disabled and handicapped, longer waiting periods before collection of unemployment benefits can begin, and the implementation of measures to reduce unlawful collection of unemployment benefits. New tax measures include cutting personal income tax allowances and tax credits, increasing the interest income tax rate from 22 to 25 percent, increasing the minimum annual corporate tax from AS 25,000 (USD 2,480) to 50,000 (USD 4,690), and introducing an energy tax on electricity and natural gas (in addition to the substantial tax already on gasoline and heating oil). The 34-percent corporate tax rate will remain unchanged.
D. Balance of Payments Situation
After years of being roughly in balance, the Austrian current account balance has shown a downward trend, falling steadily from a small surplus in 1991 to a deficit of AS 20.6 billion (one percent of GDP) in 1994 and then doubling to AS 47.3 billion (two percent of GDP) in 1995. Economists, however, expect this trend to turn around in the near future as import demand weakens under the government's austerity program. Forecasts call for current account deficits of AS 40 billion (USD 4.0 billion) in 1996 and AS 31 billion (USD 3.1 billion) in 1997.
Underlying this trend are a number of structural problems in both the manufacturing and service sectors. A strong increase in exports in 1995 contributed to a reduction in the trade deficit, but this was more than offset by a decline in the services account surplus. While the government's austerity program should contribute to weakening import demand, the failure of Austrian industry to broadly diversify and develop high tech manufacturing is area of concern affecting future export growth. Major structural problems in the services sector, such as high costs, market saturation, and the changing vacationing habits of both tourists coming to Austria and of Austrians traveling abroad, show that tourism can no longer make the same contribution to balancing the traditional trade deficit as it has in the past.
The capital account showed an increase of AS 11 billion (USD 1.1 billion) in Austrian direct investment abroad in 1995, while foreign direct investment in Austria grew by only AS 5 billion (USD 500 million), after growth of AS 15 billion (USD 1.5 billion) in 1994.
E. Infrastructure Situation
Austria has a modern communications and transportation infrastructure. An extensive highway system provides convenient access to major European industrial centers and ports. The Austrian railroad offers efficient passenger and freight service and modernization plans will introduce higher-speed rail service in the near future. Several airline carriers offer direct flights from the Vienna International Airport to major U.S. destinations. The Austrian telecommunications network is sophisticated and reliable, though relatively expensive by U.S. standards.
A. Nature of Political Relationship with the U.S.
Austria's bilateral relationship with the United States is excellent. Austria's political leaders and most Austrians recognize and appreciate the essential role played by U.S. economic assistance through the Marshall Plan after World War II, and the role played by the United States in promoting the conclusion of the Austrian State Treaty in 1955. This treaty ended the four-powers occupation following World War II and established Austria as an independent and sovereign state.
Austria maintains an embassy in the U.S. at 3524 International Court, NW, Washington, DC 20008 (Tel. 202-895-6700). Consulates are located in New York, Chicago, and Los Angeles, with honorary consulates in Atlanta, Boston, Buffalo, Cleveland, Denver, Detroit, Honolulu, Houston, Miami, New Orleans, Newark, Philadelphia, San Francisco, San Juan, Seattle, and St. Paul.
B. Major Political Issues Affecting the Business Climate
Austria shapes its foreign policy on the basis of neutrality. This neutrality has been redefined, however, in the context of participation in the EU's evolving security architecture. Austria also joined the Partnership for Peace in 1995 and there is some discussion about NATO membership as one of several options for the future of Austrian security policy.
Austrian leaders emphasize the unique role the country plays as a link between East and West, and as a moderator between the industrialized and developing countries. Austria is active in the United Nations and in UN peacekeeping efforts. It attaches great importance to participation in the Organization for Economic Cooperation and Development (OECD) and other international economic organizations, and has played an important role in the Organization on Security and Cooperation in Europe (OSCE).
Vienna is the headquarters of the International Atomic Energy Agency (IAEA) and the UN Industrial Development Organization (UNIDO). Other international organizations based in Vienna include the Organization for Petroleum Exporting Countries (OPEC) and its Fund for International Development, and the International Institute for Applied Systems Analysis (IIASA).
Austria maintains a constant exchange of business representatives, political leaders, students, cultural groups, and tourists with the countries of Central and Eastern Europe. As a result, Austrian companies are very active in investing and trading with the countries of Central and Eastern Europe. In addition, the Austrian government and various Austrian organizations provide assistance and training to support constructive changes underway in the region.
C. Synopsis of Political System, Schedule for Elections and Orientation of Major Political Parties
Austria is a parliamentary democracy. The Chancellor is the Head of Government and the President is the Head of State. The Federal Assembly (parliament) is composed of two houses -- the National Council (Nationalrat) or the lower house, and the Federal Council (Bundesrat), or upper house. Virtually all legislative authority is concentrated in the National Council whose 183 members are elected according to a complicated system of proportional representation. Elections must be held at least every four years. The National Council may dissolve itself before the end of four years by a simple majority vote or the Federal President may dissolve it on the recommendation of the Chancellor. The Federal Council consists of 64 members elected by the legislatures of the nine provinces for four- or six-year terms. Seats are allocated on the basis of population, with each province guaranteed at least three representatives. The Federal Council is restricted to reviewing legislation passed by the National Council and can only delay, not veto legislation.
The highest courts of Austria's independent judiciary are the Constitutional Court, which has jurisdiction over constitutional matters, the Administrative Court, which handles bureaucratic disputes, and the Supreme Court, for civil and criminal cases. Cases initiated in the Administrative and Supreme Courts can be appealed to the Constitutional Court. Justices of all three courts are appointed by the president for specific terms.
Austria's nine Laender (provinces) are headed by governors elected by the provincial legislatures. Although most authority, including police, rests with the federal government, the provinces have considerable responsibility for welfare matters and the supervision of local administrations.
Principal officials:
| Federal President | Thomas Klestil |
| Federal Chancellor | Franz Vranitzky |
| Vice Chancellor/Foreign Minister | Wolfgang Schuessel |
| Ambassador to the United States | Helmut Tuerk |
| Ambassador to the United Nations | Ernst Sucharipa |
Austria has enjoyed political stability since World War II. The two major parties, the People's Party (OVP) and the Social Democrats (SPO), have the support of the majority of the electorate. Three minor opposition parties -- the Freedom Party, the Liberal Forum, and the Greens -- together poll about 33 percent of the vote. Extremist parties have had virtually no influence on government policy, and usually receive less than one percent of the vote.
The SPO, which garnered 38 percent in the 1995 national elections, traditionally draws its constituency and much of its strength from the urban and industrialized areas. In the past, the party advocated heavy state involvement in Austria's key industries, the extension of social security benefits, and a full-employment policy. In the mid-1980s, the party shifted more toward advocating free market-oriented economic policies and balancing the federal budget.
The OVP's traditional constituency has been among farmers, large and small businesses, and lay Catholic groups. Its center of strength is rural Austria. In economic matters, the party advocates conservative financial policies and privatization of much of Austria's nationalized industry. The OVP received 28 percent in the 1995 ballot.
The Freedom Movement attracts those who desire no association with the two major parties. Recently, the party's mixture of populist and anti-establishment themes have won increased support. Nationally, it attracted 22 percent in the 1995 elections. The Liberal Forum, more focused on libertarian ideals, split from the Freedom Party in February 1993 and reached 5.5 percent in the 1995 election. The Greens, a left-of-center party focusing on environmental issues, received 4.8 percent.
IV. Marketing U.S. Products And Services
A. Distribution and Sales Channels
A variety of distribution channels are open for U.S. goods to enter the Austrian marketplace, including traditional wholesale distribution and retailing, less traditional catalog and direct marketing methods, as well as franchising, joint ventures and licensing agreements.
Austria can be divided into five marketing areas:
1) Vienna, the capital and vicinity;
2) pre-alpine provinces: Styria, Lower Austria, and Upper Austria;
3) alpine provinces: Carinthia, Tyrol, and Salzburg;
4) Vorarlberg in the mountains in the west;
5) the eastern flatlands of Burgenland.
Austria also serves as a unique western gateway to the markets of Central and Eastern Europe by virtue of its advantageous location, its history of political neutrality, and its historical, cultural, and linguistic ties to the region. Numerous organizations and enterprises in Austria offer expertise on trading and investing in these countries.
B. Use of Agents/ Distributors; Finding a Partner
Qualified Austrian agents and distributors can be found for nearly every kind of product a U.S. firm might want to offer on the Austrian market. In Austria, all enterprises must register with and maintain membership in the Federal Economic Chamber, the official trade and manufacturer's organization which is divided into industry groupings. Thus all legitimate Austrian commercial agents are registered at the Federal Economic Chamber, Bundesgremium der Handelsvertreter, Kommissionaere und Vermittler (fax: +43.1.502.06.274; phone: +43.1.501.05.3322).
Finding Austrian partners for U.S. businesses is the central mission of the U.S. Commercial Service - Vienna (CS-Vienna). This office, located at the U.S. Embassy in Vienna, is an ideal starting point for any partner search in Austria, be it an agent, a wholesaler, licensee, or end-user. CS-Vienna can be contacted directly (email: ovienna@doc.gov; fax: +43.1.310.6917; phone: +43.1.313.39.2243) or through a Department of Commerce district office in the United States.
Two special programs have been developed by the Commercial Service in order to assist U.S. firms in their search for foreign business partners. The "GOLD KEY SERVICE" is designed for U.S. business visitors who would like to meet potential business partners personally. With brochures and price lists supplied by the U.S. firm, CS-Vienna contacts the most qualified Austrian firms, introduces them to the products in the German language, assembles background information on the Austrian firms (such as turnover, years in business, number of employees, regions of operation, etc.), and then schedules up to six appointments per day for the U.S. visitor with interested Austrian firms. The feedback on this program, which costs $300, has been very positive. In fact, the latest survey (1995) found that 95% of respondents were satisfied or very satisfied with the service, and 92% planned to use the service again.
The second program is called "AGENTDISTRIBUTOR SERVICE" (or ADS) and is also designed to help U.S. firms find potential business partners. As with the Gold Key, CS-Vienna sends brochures and pricelists to the most interesting potential business partners in Austria, introduces them to the products in the German language, assembles background information about the selected firms, and then reports the results back to the U.S. firm, either directly or through the Department of Commerce. Any appointments or travel plans are then handled directly by the U.S. firm. The ADS program is administered through Department of Commerce district offices in the United States and costs $250.
In addition, CS-Vienna supports trade missions, information seminars featuring U.S. technology, special events, and joint "USA" stands at trade fairs, all of which have produced excellent results for U.S. firms entering the market. CS-Vienna can provide interested U.S. firms with information about planned events and upcoming trade fairs at any time.
C. Franchising
Franchising is one of the fastest growing and most profitable ways of doing business in Austria. In only a few years, the number of franchising systems has more than quadrupled, from about 45 in 1990 to over 200 in 1994. The number of actual outlets has also grown quickly, tripling from about 1000 to 3000 over that same time period. About half of all franchise systems are of foreign origin, mostly German.
EU membership and the opening of Eastern European markets make Austria especially attractive to western franchising companies. Many firms cross over the EU-internal border from Germany (where the language is the same). Others use Austria as a springboard for operations in Central and Eastern Europe. McDonald's Central and Eastern European headquarters, for example, is located in Vienna.
Major franchise operations in Austria involve cosmetics, apparel, restaurants and fast food, tanning studios, health clubs, language schools, financial consultants, management trainers, cleaning services, auto repair shops, hair salons, shoe repair, hobby shops, home improvement centers, soft drink bottlers, sewing machine companies, photo studios and shops, auto sales and rental, hotels, jewelry stores, food stores, and toy stores.
For more information about franchising in Austria, or for assistance finding potential Austrian franchise buyers, contact CS-Vienna or the Austrian Franchising Association:
c/o McDonald's
Attn:Mr.Popp
WorldTradeCenter
A-1300 Flughafen Vienna, Austria
Tel. (43 1) 7007-6484
Fax. (43 1) 7007-6403
or
c/o Syncon Ges.m.b.H.
Attn: Ms. Waltraud Frauenhuber
Nonntaler Hauptstrasse 48
A-5020 Salzburg, Austria
Tel. (43 662) 825 670
Fax. (43 662) 832 164
D. Direct Marketing and Catalog Shopping
Though discouraged by Austrian law, telephone and direct mail solicitation are increasingly in evidence in Austria. For interested U.S. firms, a list of Austrian direct marketing firms is available from CS-Vienna. Some U.S. companies, including Tupperware and Amway, have also established themselves in the Austrian market with home sales.
Catalog shopping is another non-traditional form of distribution that is rapidly gaining popularity in Austria. Per capita spending on catalog sales reached about $170 in 1994, a growth rate of 10% over the year before, compared to the moderate 3.2% growth in total retail spending. By removing from the calculation products not available through catalogs (such as tobacco, food, and pharmaceuticals), this form of shopping accounts for an astonishing 7.5% of total retail turnover. Four major catalog companies dominate the Austrian market: Quelle, Universal Versand, Neckermann, and Otto Versand.
E. Joint Ventures and Licensing
Joint ventures and licensed production arrangements have become increasingly common in Austria and offer U.S. firms several advantages, including free access to the European market, improved access to Central and Eastern European markets, reduction of transportation costs, and high quality production. Joint ventures may be formed as companies, partnerships, or other legal entities used for doing business in Austria. A recent example of a successful joint venture in Austria is the Chrysler/Steyr-Daimler-Puch cooperation, which produces automobiles for the European market.
Austrian companies are receptive to licensing arrangements as a source of technology in order to better compete with large European companies. Royalty and license fee payments may be freely transferred out of Austria. Several important licensing agreements have transferred U.S. technology to Austria, as well as Austrian technology to the United States.
Austrian firms seeking joint venture or license partners can be found through the CS-Vienna, either directly or through a Department of Commerce district office.
F. Steps to Establishing an Office
Many legal forms for doing business are available to the potential investor when setting up a business operation in Austria. These include public corporations, limited liability companies, limited or unlimited commercial partnerships, silent partnerships, branches of foreign enterprises, cooperative societies, and sole proprietorships. Most foreign-owned businesses choose to operate in the form of a limited liability company (Gesellschaft mit beschraenkter Haftung - Ges.m.b.H.).
Upon the formation of a Ges.m.b.H., two shareholders are required (they can be Austrian or foreign citizens). After formation, share capital can be transferred to one owner. Minimum initial share capital is AS 500,000, with at least one-half paid up front in cash. Taxes and costs associated with registration and licensing of a company will amount to between 10 and 15% of the startup capital. Local financing is available to foreign investors.
For more detailed information about establishing an office in Austria, see the CS-Vienna report "Locating a Business in Austria" (updated March 1996, available at CS-Vienna, any Department of Commerce district office, or at http://www.stat-usa.gov).
G. Selling Factors and Techniques
Although both price and quality are important considerations for Austrian industrial and private consumers, there seems to be a greater willingness in Austria than in America to pay more for perceived better quality, especially when making larger investments. Thus emphasizing the high quality of a product is often a better technique than concentrating on price competitiveness. U.S. firms have an edge in selling their products and services, as many U.S. goods have an excellent reputation for quality. U.S. industrial and computer technology is in many areas considered to be the cutting edge, and is sought by aggressive, innovative companies interested in upgrading their operations.
A major influence on consumer behavior is restricted shopping hours. All stores, including grocery stores, must stay closed on Saturday afternoons, Sundays, holidays, and evenings. As a result, shopping in Austria is primarily directed at specific necessary purchases and almost never a quasi-leisure activity as it is in America. Due to the increasing number of women entering and remaining in the work force, large chains and malls or shopping streets in the center of town are beginning to dominate the shopping scene, as neighborhood stores are often closed by the time their traditional customers arrive home from work. Several proposals for the liberalization of store opening hours are currently being considered, and some liberalization is expected by the end of 1996.
H. Advertising and Trade Promotion
While still less sophisticated than the advertising in America,
advertising in Austria has been gaining importance over the past
10 years. In 1985, total spending on advertising was around $700
million, with 30% for television, 50% for print media, and the
rest in radio and billboards. In 1995, total spending had more
than doubled, reaching $1.6 billion, but with an interesting change
in emphasis. Spending on television advertising actually fell
to 23% of the total, while print media accounted for nearly 60%
of total advertising outlays. The reasons for this unexpected
change in emphasis are at least partially explained by the following
look at the structures of Austrian media:
Print media: Austria's most important newspaper is the tabloid "Neue Kronen Zeitung", which offers readers sensational headlines, pin-ups, and a heavily slanted reporting style. This paper enjoys a circulation density that is unique world-wide, with an average daily circulation of over one million (compared to a total population of just over 8 million). A newcomer on the daily newspaper scene is "Taeglich Alles", a full-color tabloid that sells for a discount price. In the brief time since its introduction, Taeglich Alles already boasts an average daily circulation of 370,000.
The conservative and comprehensive "Die Presse" has an average daily circulation of about 115,000. "Der Standard" is a more liberal/libertarian economics-oriented daily and has an average circulation of 104,000. The "Kurier" is a middle-of-the road paper aimed at a less sophisticated audience with an average daily circulation of about 325,000. This overwhelming market penetration by the daily print media goes a long way toward explaining the emphasis placed on advertising therein.
Broadcast media: Austrian television is a state monopoly. The Austrian Broadcasting Corporation (ORF) operates two television stations, both offering programming with content similar to that of private stations: news, movies, sports, talk shows, and the inevitable reruns of American situation comedies. Naturally, advertising is also present, albeit primarily during breaks between programs. This broadcast monopoly is being challenged by cable and satellite television, which is widely available in Austria. The latest figures show around 65% of Austrian households capable of receiving either cable or satellite television, both of which offer private German broadcasters, as well as other European senders and international services, including CNN and CNBC. The price charged for advertising varies widely: reaching 1,000 viewers on ORF cost an average of about $23 in 1995, while competing cable and satellite broadcasters charge between $7 and $17 for the same access. Another blow to the Austrian television monopoly will come with the liberalization of cable programming, due in August 1996, at which time cable companies will be allowed to interrupt the feed and insert local programming and advertising.
The ORF also operates four radio stations, including Blue Danube Radio, which provides English language programming. Recently, radio broadcasting was opened to private stations, and local private radio programming is slowly taking root. Stations are for the most part owned by large media conglomerates, which are also involved in print media.
Other advertising venues: Billboard advertising has remained a constant feature of Austrian marketing for many years, and in 1995 still accounted for nearly 7% of advertising spending. Billboards are displayed along highways and roads, in post offices and phone booths, on public transportation, and on outdoor pillars along public routes and other heavily frequented places. Sites to place such a billboard may be hard to find, as many advertisers retain the same place year after year. Store displays and commercial samples also play a significant role in retail promotion (due to the regulated opening hours in Austria, "window shopping" is a literal phenomenon). Displays can be found in shop windows, train stations, streetcar terminals, and airports.
Truth in Advertising: Following the general trend toward better representation of consumer interests, a Consumer Forum has been established in the Austrian Trade Ministry. The forum comprises representatives of political parties, business organizations, labor unions, and business associations. A ministry subcommittee concerned with commercial advertising examines posters, TV, radio, newspaper ads, and entire sales campaigns with regard to their truthfulness, information value, and ethnic sensitivity. The forum can institute proceedings against advertisers who make false claims. Anyone transgressing established commercial usage laws may be sued.
The government recently lifted the regulation against comparative advertising, thus enabling advertisers to make direct comparisons between their products and services and those of their competitors.
Trade Promotion: National and international trade fairs in most every industry sector can be found in Austria, where between 100-150 fairs are organized every year. A comprehensive list of Austrian trade fairs and exhibitions is available through the WIFI Austria (fax: +43.1.501.05.3124, phone: +43.1.502.06.254).
I. Pricing Products
Price levels in Austria are relatively high, a situation which can be traced to high social costs of labor (including mandatory health insurance and pension fund contributions for employees), extensive agricultural subsidies, and high taxes. The value-added tax (VAT) alone ranges from 10 to 20 percent. Most products carry a VAT of 20 percent, ultimately paid by the consumer. In addition, special taxes are levied on luxury goods, fuel, drinks, and many other items. These taxes quickly add up, and should be taken into consideration when pricing products for the Austrian market.
Although one of the strongest arguments in favor of Austrian entry into the EU was the promise of a fall in consumer prices, increased competition and the elimination of tariffs has not had the dramatic effect on price levels that was initially expected. Prices on some products in the districts near the EU-internal borders have begun to come down as Austrians have begun to take advantage of the freedom of unlimited personal shopping in other EU countries. In general, however, Austria remains one of the highest-priced EU countries.
J. Sales Service/ Customer Support
An exporter to Austria will generally be expected or required to provide post-sales service. Brand-name sellers generally have extensive customer service and support networks in Austria.
K. Selling to the Government
The Austrian Government adheres to GATT Public Procurement Procedures, but some major contracts are negotiated by invitation. Provincial and municipal authorities are not bound by GATT requirements, and the Austrian military sometimes makes its own contracting arrangements (limited tenders). While there is no Austrian equivalent of the "Buy America" Act, there is a tendency to prefer local bidders or those who are willing to enter into an offset agreement.
L. Protecting Your Product from IPR Infringement
Austria is a member of all international intellectual property rights agreements. To register a patent in Austria or in the EU, contact the CS-Vienna or the Austrian Patent Office directly:
Oesterreichisches Patentamt
(Austrian Patent Office)
Kohlmarkt 8-10, PF 95
A-1014 Vienna, Austria
Tel. (43 1) 534-24
Fax. (43 1) 534-24-535
A list of patent attorneys is available through the Austrian Patent Attorney Chamber:
Oesterreichische Patentanwaltskammer
Museumstrasse 3
A-1070 Vienna, Austria
Tel. (43 1) 523 4382
M. Need for a Local Attorney
Some Austrian law firms can conduct business in English and are familiar with U.S. law. Some are members of the bar in the United States. A list of English-speaking law firms is available at the U.S. Consulate, as well as at the CS-Vienna offices.
V. Leading Sectors For U.S. Exports
A. Best Prospects for Non-Agricultural Products
1. Computer and Peripherals (CPT)
Narrative: According to industry analysts, sales of computer hardware and peripherals are expected to grow by 20 percent annually through 1997. As the cost of computer equipment falls and computing and data storage capacities increase, the use of computers is becoming more widespread, both in homes and businesses. Very high rates of growth are expected for PC's and internet oriented products and services. Industry experts expect that by the year 2000, the market for network oriented computer hardware, software, and services will have doubled in value.
Data Table (million USD)
| . | 1995 | 1996 | 1997 |
| Total Market Size | 1,221.0 | 1,405.0 | 1,718.1 |
| Total Local Production | 10.0 | 11.5 | 14.1 |
| Total Exports | 196.9 | 225.5 | 275.7 |
| Total Imports | 1,407.9 | 1,619.0 | 1,979.7 |
| Imports from the U.S. | 273.4 | 314.0 | 383.9 |
1995 exchange rate: USD 1 = AS 10.08
Note: The above statistics are unofficial estimates.
2. Computer Software (CSF)
Narrative: U.S. products have thoroughly penetrated the Austrian computer software market, which is projected to grow 8 percent annually through 1997, due primarily to downsizing and the expansion of open systems. In particular, the market for databases is expected to increase significantly as more emphasis is put on performance enhancement and the computerization of transactions. Though still not expected to be used as basic tools for commercial applications, expert systems should experience high growth rates during the next five years. New technologies are stimulating demand for new applications, including sophisticated networks, optical storage, image processing, and multimedia.
Data Table (million USD)
| . | 1995 | 1996 | 1997 |
| Total Market Size | 3,116 | 3,427 | 3,668.5 |
| Total Local Production | 1,720 | 1,892 | 1,980.0 |
| Total Exports | 366 | 403 | 443.3 |
| Total Imports | 1,762 | 1,983 | 2,131.8 |
| Imports from the U.S | 355 | 391 | 430.1 |
1995 exchange rate: USD 1 = AS 10.08
Note: The above statistics are unofficial estimates.
3. Drugs and Pharmaceuticals (DRG)
Narrative: In the Austrian market for drugs and pharmaceuticals, domestic production increased 7 percent in 1995. Imports are estimated to have increased by 7-9 percent. The Austrian market is highly receptive to pharmaceuticals from the U.S. because of their excellent reputation for quality and safety.
Data Table (million USD)
| . | 1995 | 1996 | 1997 |
| Total Market Size | 1,655.1 | 1,893.6 | 2.058,5 |
| Total Local Production | 1,207.0 | 1,388.6 | 1,471.9 |
| Total Exports | 1,001.1 | 1,031.1 | 1,072,3 |
| Total Imports | 1,449.2 | 1,536.1 | 1,658.9 |
| Imports from the U.S. | 158.0 | 165.9 | 175.8 |
1995 exchange rate: USD 1 = AS 10.08
Note: The above statistics are unofficial estimates.
4 Electronic Components (ELC)
Narrative: The outlook for U.S. manufacturers/exporters of electronic components is quite good for 1997, with an expected real import growth rate of 8 percent. Highly sophisticated active components as CPU's, RISC's, ASIC's, RAM's and MOS PLD's will have especially good opportunities in the Austrian market over the next three years. In 1995, deliveries from the United States amounted to USD 90.8 million or 9.1 percent of the total imports of electronic components. This figure, however, represents only a fraction of the electronic components sourced from U.S. manufacturers, as products are often shipped directly from their Far-Eastern production facilities.
Data Table (million USD)
| . | 1995 | 1996 | 1997 |
| Total Market Size | 996.3 | 1,096.7 | 1,200.0 |
| Total Local Production | 999.0 | 1,080.0 | 1,160.0 |
| Total Exports | 979.9 | 1,038.7 | 1,100.0 |
| Total Imports | 977.2 | 1,055.4 | 1,140.0 |
| Imports from the U.S. | 90.8 | 97.0 | 106.8 |
1995 exchange rate: USD 1 = AS 10.08
Note: The above statistics are unofficial estimates.
5. Aircraft and Parts (AIR)
Narrative: The market for aircraft and parts is expected to grow 5 percent annually in 1996 and 1997, as air traffic continues to boom. Austria is a net importer of aircraft and parts, and itself produces only motor gliders (i.e, no commercial or passenger aircraft). The U.S. position is very strong in this market segment. The principal end-users of aircraft, parts and equipment are the national carriers -- Austrian Airlines, Lauda Air, Tyrolean Airways, and Rheintalflug (a commuter airline) -- and charter airlines. Emergency medical and traffic control services use civilian helicopters. There is also a modest market for private and corporate fleets.
Data Table (million USD)
| . | 1995 | 1996 | 1997 |
| Total Market Size | 190.2 | 199.5 | 210.5 |
| Total Local Production | 80.5 | 84.5 | 88.0 |
| Total Exports | 63.8 | 67.0 | 70.0 |
| Total Imports | 173.5 | 182.0 | 192.5 |
| Imports from the U.S. | 123.0 | 129.0 | 135.5 |
1995 exchange rate: USD 1 = AS 10.08
Note: The above statistics are unofficial estimates.
6. Medical Equipment (MED)
Narrative: With the completion of all major hospital projects in the country and the severe budget problems of the Austrian health service, the medical equipment market is expected to grow only slowly in the coming 3-4 years. Nevertheless, U.S. manufacturers have continuing opportunities in the Austrian market with highly-sophisticated diagnostic apparatus, pacemakers, and nuclear medical instruments. An annual four percent real growth rate for U.S. imports throughout this time period is attainable. In the sub-sector of electro- medical equipment, the U.S. enjoyed a considerable import market share of 16.4 percent in 1995.
Data Table (million USD)
| . | 1995 | 1996 | 1997 |
| Total Market Size | 385.9 | 417.7 | 453.2 |
| Total Local Production | 165.3 | 173.0 | 182.0 |
| Total Exports | 204.3 | 222.7 | 238.3 |
| Total Imports | 424.9 | 467.4 | 509.5 |
| Imports from the U.S. 49.7 | 52.0 | 55.1 | . |
1995 exchange rate: USD 1 = AS 10.08
Note: The above statistics are unofficial estimates.
7. Industrial Chemicals (ICH)
Narrative: The value of domestic industrial chemicals production increased by approximately 8 percent in 1995. Imports are estimated to have grown by 7-9 percent. There are good sales opportunities for U.S. firms in this sector, especially for specialty and advanced products. Opportunities also exist for newly developed environmentally friendly "soft" chemical substitutes for hazardous substances.
Data Table (million USD)
| . | 1995 | 1996 | 1997 |
| Total Market Size | 1,002.1 | 1,192.0 | 1,274.7 |
| Total Local Production | 913.2 | 1,070.0 | 1,123.5 |
| Total Exports | 618.1 | 648.9 | 681.3 |
| Total Imports | 707.3 | 770.9 | 832.5 |
| Imports from the U.S. | 47.1 | 49.9 | 52.3 |
1995 exchange rate: USD 1 = AS 10.08
Note: The above statistics are unofficial estimates.
8. Telecommunications (TEL)
Narrative: Gradual liberalization of the Austrian telecommunication sector is changing the structure of the industry considerably and generating many new sales opportunities. The market is becoming more competitive. Innovation is becoming more important, and prices are starting to come down. Mobile communication is the most dynamic segment of the market and is growing rapidly. In the second half of 1996 a private GSM operator is scheduled to start operations, further stimulating equipment sales. In addition, the Government of Austria plans to award a third digital cellular license operating in the 1,800 frequency band. The public tender is expected to be issued in late 1996, with services being launched by the end of 1997.
Data Table (million USD)
| . | 1995 | 1996 | 1997 |
| Total Market Size | 943.3 | 007.3 | 1,056.6 |
| Total Local Production | 881.2 | 915.3 | 942.7 |
| Total Exports | 337.2 | 327.3 | 330.5 |
| Total Imports | 399.3 | 419.3 | 444.4 |
| Imports from the U.S. | 40.8 | 42.4 | 44.5 |
1995 exchange rate: USD 1 = AS 10.08
Note: The above statistics are unofficial estimates.
9. Travel and Tourism (TRA)
Narrative: Due to the strength of the Austrian Schilling vis a vis the U.S. dollar, Austrian tourism to the United States is booming. According to airline officials and travel industry representatives, seats on transatlantic flights have been selling out months in advance. The forecast for 1997 is also good, with an anticipated growth of 3 percent. U.S. suppliers at POW WOW '96 in Los Angeles (the largest tourism trade fair) expressed optimism about the prospects for 1997 and the excellent growth potential of the Austrian market.
Data Table (million USD)
| . | 1995 | 1996 | 1997 |
| Total Market Size | 166.900 | 178.700 | 183.600 |
| Total Local Production | N/A | N/A | N/A |
| Total Exports | N/A | N/A | N/A |
| Total Imports | N/A | N/A | N/A |
| Imports from the U.S. | N/A | N/A | N/A |
1995 exchange rate: USD 1 = AS 10.08
Note: The above statistics are unofficial estimates.
10. Pollution Control (POL)
Narrative: In Austria, there is a widespread popular consensus about the need to protect valuable natural resources. Currently, Austria's environmental expenditures are equivalent to between 2.6 and 2.8 percent of the country's GDP, making Austria a top per capita spender on its environment. Austria's environmental industry is forecast to continue its rapid growth. The largest market segments are waste management and remediation of contaminated sites. U.S. suppliers find Austria a promising market for these areas, as well as for testing/analyzing instruments, incinerators featuring clean burning technology with respect to Austrian standards, sophisticated and specialized equipment for separation and recycling of waste, and innovative waste-to-energy technologies.
Data Table (million USD)
| . | 1995 | 1996 | 1997 |
| Total Market Size | 4,674.9 | 4,950.4 | 5,180.6 |
| Total Local Production | 4,186.9 | 4,438.1 | 4.638.1 |
| Total Exports | 921.5 | 967.6 | 996.6 |
| Total Imports | 1,409.5 | 1,479.9 | 1,539.1 |
| Imports from the U.S. | 42.2 | 43.0 | 44.2 |
1995 exchange rate: USD 1 = AS 10.08
Note: The above statistics are unofficial estimates.
B. Best Prospects for Agricultural Products
Tobacco (PS&D Code: 21)
Narrative: Despite increased import duties resulting from EU membership, the U.S. is expected to remain the predominant tobacco supplier in the Austrian market.
Data Table (million USD)
| . | 1995 | 1996 | 1997 |
| Total Market Size | 53.0 | 51.0 | 55.0 |
| Total Local Production | 1.0 | 1.0 | 1.0 |
| Total Exports | 3.0 | 2.0 | 2.0 |
| Total Imports | 55.0 | 52.0 | 56.0 |
| Imports from the U.S. | 20.0 | 18.0 | 21.0 |
1995 exchange rate: USD 1 = AS 10.08
Note: The above statistics are unofficial estimates.
Cotton (PS&D Code: 04)
Narrative: As a result of EU membership, the duty on Austrian yarn entering the EU dropped to zero. This should lead to increased domestic production and exports of cotton yarn and, consequently, increased demand in Austria for imported cotton. U.S. cotton should benefit from this increased demand.
Data Table (million USD)
| . | 1995 | 1996 | 1997 |
| Total Market Size | 58.0 | 59.0 | 60.0 |
| Total Local Production | nil | nil | nil |
| C. Total Exports | nil | nil | nil |
| D. Total Imports | 58.0 | 59.0 | 60.0 |
| E. Imports from the U.S. | 7.0 | 8.0 | 8.0 |
1995 exchange rate: USD 1 = AS 10.08
Note: The above statistics are unofficial estimates.
VI. Trade Regulations And Standards
A. Trade Barriers
When Austria became a member of the EU on January 1, 1995, approximately 63 percent of the existing tariffs were lowered or eliminated, while about 31 percent were raised. Sixty percent of all products from non-EU countries enter without any tariff.
While the average tariff level in the EU for manufactured goods is relatively low at 5.44 percent, some goods are taxed at a much higher rate. Shoes and motor vehicles, for example, are subject to a 20 percent duty, and tariffs from 14-17 percent are not unusual for such items as office machines, computers, and some textile products.
Some goods are subject to tariff quotas, whereby after a certain quantity of the good has entered the EU at low or zero duty rate, the rate is increased. These are primarily goods which are determined to be useful to the European economy only in certain quantities, generally raw materials or parts. The most important quotas and tariff quotas for manufactured goods are on textiles and steel. Both are administered through a system of licensing. The Austrian importer can get information about the extent to which the quota has been filled through the Customs Office Subin, which has an on-line connection to Brussels, as well as through the Main Customs Offices (Hauptzollaemter) of the Ministry of Finance.
B. Customs Valuation
The Austrian customs regime is based on the "TARIC" (integrated tariff of the EU), determined in Brussels. Customs valuation is according to GATT regulations.
C. Import Licenses
Import quotas on textiles and steel are managed through the granting of import licenses to qualified firms. In order to import textiles from Eastern Europe, Eastern Asia, and some Latin American countries, an Austrian importer must possess an import license and obtain permission to import each shipment (Einfuhrbewilligung). The same is true for the import of steel from some CIS states. The licensing authority is the Austrian Ministry of Economic Affairs. Contact address provided in appendix E.
The import of military and related items, such as firearms and ammunition also requires a license and individual approval of each shipment. The licensing authority responsible for these products is the Austrian Ministry of the Interior. Contact address provided in appendix E.
D. Export Controls
Austria is a member of key multilateral non-proliferation arrangements to control the export of nuclear, biological and chemical goods, items and technologies, as well as dual-use items, particularly to countries under international sanctions. The transit, export, and re-export of such goods requires a specific license from either the Austrian Ministry of Economic Affairs, Ministry of Interior and/or the Ministry of Defense (contact information is provided in appendix E).
E. Import/Export Documentation
In order to bring goods from a third country into Austria and thus into the EU market, a customs declaration must be made by a resident of the EU. Depending on the product and the country from which it is being imported, specific evidence material (such as proof of land of origin and invoice) must be included. Where a tariff applies, the duty is collected within 15 days of import.
The exporter is required to report the intended transaction to the export customs authority. Most goods require no special permission for export (the exception pertains to strategic items). The content of the shipment is then verified at an external border of the EU.
F. Temporary Entry
There is no tariff imposed on the temporary entry of products into Austria. This includes transit goods as well as those intended for demonstration or exhibition at trade fairs.
G. Labeling/Marking Requirements
Austrian labeling and marking requirements are not as strict as those in the United States. Nutritional information is not required on food products, nor are safety warnings mandated on electrical devices. At present, the most important requirements include washing instructions on textiles, and certification of safety (the CE mark) on machines, toys, and baby accessories. It is not required that labeling be in the German language, though in some cases it is highly advisable for marketing reasons.
Efforts are currently underway to harmonize EU labeling and marking requirements along with quality and safety standards. Ultimately, as the EU standards harmonization process is completed, a CE mark will be required for most U.S. manufactured imports. Until that time, however, the regulations are an often frustrating mix of national, EU, and international requirements.
Products that are inadequately labeled, however, are not turned away at the border. The person importing the product bears the responsibility to ensure products are certified and marked before they are offered for sale. At present, there is no special procedure required for importers claiming non-marked products at the border. In the future, however, a form will be required, enabling the product to be traced.
H. Prohibited Imports
Although there are no specifically prohibited imports, the EU controls the entry of some products into the EU market through standards and content regulations. Though goods which do not meet EU standards may be imported, they cannot be released into the market, until they are modified in such a way as to comply with EU standards regulations.
I. Standards
National Standards: The Austrian Bureau of Standards (Oesterreichisches Normungsinstitut - ON) is a private non-profit organization incorporated by the Austrian Parliament in the Standards Act of 1971 as the only Austrian body to issue and endorse Austrian standards. ON prepares standards in a variety of fields: ores and metals, mechanical engineering, building and construction, health and medical equipment, non-metallic materials, chemical and allied industries, special technologies, personal safety, food, environment, and waste management.
Approximately 90 percent of the standards ON prepares are voluntary. The standard series ISO 9000 for quality management is one of the most important voluntary standards in Austria, and has become almost a must in many industries.
Austria is a signatory to the GATT Standards Code. ON can provide information on non-governmental standards. The Federal Ministry of Economics is the enquiry point for governmental regulations. The addresses are:
Oesterreichisches Normungsinstitut (ON)
(Austrian Bureau of Standards)
Heinestrasse 38, Postfach 130
A-1021 Vienna, Austria
Tel: (43 1) 213 00-626
Fax: (43 1) 213 00-650
Bundesministerium fuer wirtschaftliche Angelegenheiten
(Austrian Federal Economic Ministry)
GATT Enquiry Point
Abteilung 1/5
Stubenring 1
A-1011 Vienna, Austria
Tel: (43 1) 711 00-5452
Fax: (43 1) 713 79 95
EU Standards and Harmonization: The harmonization of standards requirements for the entire EU is being tackled on a product-by-product basis. In each case, full implementation follows only after a transition period. An estimated 80 percent of all American products sold in the EU will require the "CE" mark (the EU certification that a product has met safety and quality standards) once all directives have been passed and all transition periods have expired. In the future, Austrian consumers will look for these marks the same way Americans look for the "UL" mark.
The current mix of national and EU standards requirements can be frustrating for the U.S. exporter. Those products for which an EU directive has been issued are subject to EU standards requirements, which supersede any national requirements. Manufactured goods falling under an EU directive must be tested and certified, and carry the "CE" mark in those countries in which the transition period has expired. Those products for which no directive has been issued continue to be subject to national requirements. Assistance in determining which standards apply to particular products designated for export is available at CS-Vienna.
Both EU requirements and the standards for an Austrian quality or performance mark will in many cases require that a product be modified. Even if the product does not require modification, it will require testing and certification before it can be marketed.
Contact information for EU "CE" standards:
Single Internal Market Information Service
Office of European Community Affairs
Room H3036
International Trade Administration
U.S. Department of Commerce
Washington, D.C. 20230
Phone: (202) 482-5823
Fax: (202) 482-2155
U.S. contacts for foreign standards information:
National Center for Foreign Standards Information
National Institute of Standards and Technology
TRF Room A163
Gaithersburg, MD 20899
Phone: (301) 975-4040
Fax.: (301) 975-2128
Ms. Janice Price
Europe/Regional, Political and Economic Affairs
Room 651P
U.S. Department of State
Washington, D.C. 20520
Phone: (202) 647-2395
Mr. Chris Marcich
DAUSTR for Europe and Mediterranean
Office of the U.S. Trade Representative
600 17th Street, NW
Washington, D.C. 20506
Phone: (202) 395-3320
American National Standards Institute
11 West 42nd Street
13th Floor
New York, NY 10036
Phone: (212) 642-4900
Fax: (212) 302-1286
The ON also produces a catalogue of its standards, ON-KATALOG, as well as a monthly standardization magazine, entitled "CONNEX," which provides information on the latest changes in national, European and international standards. "ON InfoPoint" is a commercial information service which offers specific investigations to clients in the field of standards and technical regulations in Austria and abroad. Contact ON directly to access any of these publications or services.
J. Free Trade Zones/Warehouses
Free trade zones (EU Freilager), outside the Austrian/EU customs territory, are located in Graz, Linz, Bad Hall near Innsbruck, and Vienna-Freudenau. The zones in Linz and Vienna-Freudenau have the added benefit of Danube River port facilities.
Foreign products from non-EU countries may be brought into zones for transshipment, storage, processing, manufacturing, or packaging without the payment of a customs duty or tax. Customs are charged on goods only when they are shipped from the zone into Austrian customs territory. The importer has the option of having the duty based on the state of processing of the goods at the time of their entry into the zone, or on their condition at the time of their shipment from the zone to the customs territory. In cases where goods produced in the zone from both foreign and domestic materials are shipped into the customs territory, duty is charged only on the foreign materials. However, foreign goods for consumption or capital goods brought in for use in the zone are subject to customs duty or tax upon entry.
Warehousing: There are two basic types of customs privileged warehousing facilities for imported foreign goods: (1) non-bonded warehousing against customs bond account and (2) storage in bonded customs warehouses.
Imported goods which are to be sold in the customs territory or reexported may be stored in non-bonded warehouses without customs seal and without payment of duties and taxes for an unlimited time. A transaction license is required and is granted only to registered firms and traders. Security is required, and pertinent customs provisions must be observed. Account is kept of the disposition of the goods throughout their registration in customs-bond accounts. Minor operations, such as packing, unpacking and repacking, refilling, and maintenance, may be performed by the holder of the transaction license without notifying customs officials, provided that such operations do not result in a change of the tariff classification or dutiable value. In certain circumstances, non-bonded storage against a customs-bond account may be permitted, if the goods are processed during their storage. In such cases, the pertinent provisions of inward processing traffic apply.
Bonded customs warehouses may store dutiable imported goods that are subsequently to be cleared for free trade within the customs territory, submitted to another customs procedure, or reexported. Goods cannot be entered or removed without breaking a customs seal. An authorized agent is required to supervise the goods while in storage and is entitled to subject them to operations (e.g., packing, blending, separating, cleaning, and marking) that are compatible with the purpose of customs warehousing, as long as the tariff classification and the dutiable value of the goods remain unchanged.
Bonded customs warehouses are either public or private. Public customs warehouses may be used by anyone who observes warehouse regulations. They are often located near a customs office and are usually operated by the Austrian government or by certain regional organizations. Some store most types of goods, while others restrict themselves to specialized goods. Private customs warehouses generally may be used only by the warehouse owner.
K. Special Import Provisions
Austria complies with the special import provisions administered by the EU, including the Generalized System of Preferences, the Multi-Fiber Arrangement, as well as various cooperation and association agreements with the most important Central and Eastern European countries.
L. Membership in Free Trade Agreements
As an EU member, Austria participates in the European Economic Area (EEA). Austria is also a member of the World Trade Organization (WTO). Although Austria has no bilateral free trade agreements, as an EU member it participates in all EU trade agreements, including:
- Association agreements (Europe agreements) involve political and economic elements in addition to tariff reductions. Agreements are in place with Bulgaria, Czech Republic, Hungary, Poland, Romania, and Slovakia. Association agreements have been signed with the Baltic states and Slovenia, but are still waiting for ratification.
- Free trade agreements primarily involve reductions in tariffs. Agreements are in place with Estonia, Latvia, and Lithuania.
- Cooperation agreements concentrate on increasing trade and cooperation, and are in place with Belarus, Kazakhstan, Kyrgystan, Moldova, Russia, and Ukraine.
A. Host Country Policies and Practices
1. Openness to Foreign Investment
Government Attitude toward Foreign Private Investment: The Government of Austria generally welcomes all foreign direct investment, particularly those investments which create new jobs in high technology, capital intensive industries, improve productivity, replace imports, increase exports, and do not have a negative impact on the environment. Austria's basic policies toward foreign direct investment and investment-related payment transactions are not expected to change in coming years. A large number of foreign firms, including several large U.S. companies, have invested in Austria and most have expanded their original investment over time.
There are no formal sectoral or geographic restrictions on foreign investment, although investment in sectors with excess capacity, such as steel, textiles, and paper, is not encouraged. Financial preference and tax incentives within EU parameters are offered to firms undertaking projects in economically depressed areas and underdeveloped districts on Austria's eastern borders. Some of these geographic areas are also eligible for subsidies under EU programs. The only instances of local opposition to investment in the manufacturing sector have been due to environmental concerns.
Acquisitions, Mergers, Takeovers, Cartels: International acquisitions and takeovers of domestic enterprises are permitted in Austria. International cartels are not prohibited, but are subject to oversight by the Cartel Court to prevent the abuse of market power. The Cartel Court must be notified within one month of any merger or acquisition, if combined worldwide sales are in excess of Austrian Schilling (AS) 150 million (about USD 14.9 million). Prior notification is required in the case of mergers and acquisitions with combined sales in excess of AS 3.5 billion (USD 347 million), for those which entail the transfer of production facilities or rights, or which result in the direct or indirect purchase of 25 percent or more of one firm by another.
International mergers and cartels with worldwide sales in excess of European Currency Units (ECU) 5 billion (about USD 6.6 billion) or EU-wide sales in excess of ECU 250 million (USD 330 million) are also subject to control by the EU Commission.
Screening Mechanisms: Only those foreign investments with government financial assistance are subject to scrutiny by the government. Screening is intended only to ensure compliance with EU regulations which restrict such assistance to disadvantaged geographic areas.
Privatization: In the ongoing privatization of public enterprises, foreign and domestic investors are, in principle, treated equally. However, in privatizations involving banks or basic industries, there is a stated policy of "maintaining the Austrian interest," with no specific regulations so far on how this goal is to be achieved.
Research and Development Programs: Regardless of the nationality of ownership, every company or subsidiary legally established in Austria is eligible for research and development grants from the three Austrian R&D/technology funding organizations: the Fund for Scientific Promotion (FWF) (basic research), the Industrial Research Promotion Fund (FFF) (applied research), and the Innovations and Technology Fund (ITF). These funds operate autonomously under established guidelines, although they do receive funding from the federal government.
Treatment of Foreign Investors: There is no discrimination against foreign investors. However, foreign investors are required to meet a number of regulations. Although participation by Austrian citizens in ownership or management is not required, at least one manager must meet residence and other legal qualifications. Nonresidents must appoint a representative for them in Austria. Austrian residency laws and quotas for foreign labor may hamper obtaining work permits for third country citizens (U.S. and non-EU) in management positions.
Investment Incentives: Forty-one percent of Austria's land area is eligible for support under various EU structural fund programs. The Austrian federal, provincial and local governments also provide financial incentives within EU parameters to promote investments in Austria. Incentives under these programs are equally available to domestic and foreign investors and range from tax incentives to preferential loans, guarantees and grants. Most of these incentives are available only if the planned investment meets specified criteria (e.g., implementation of new technology, support for developing markets, etc.).
2. Conversion and Transfer Policies
There are no restrictions on converting or transferring funds associated with foreign investment. The Austrian National Bank (ANB) has fully liberalized all cross-border capital transactions for nonresidents and residents, including the acquisition of Austrian securities, debt service, and the repatriation of profits, interest payments, dividends, and the proceeds from disinvestment. The Austrian Schilling is a freely convertible currency.
For fifteen years, the ANB has pursued a "hard Schilling policy," adjusting money supply and interest rates to peg the Schilling to the German Mark (DM) at an exchange rate of AS 7 equals DM 1. The ANB has stated publicly its intention to continue to adhere to this policy. One of the major goals of the government is to be among the first group of countries selected to join the EMU and to adopt the European single currency. However, a recent report of the EU Commission casts doubt on Austria's ability to meet the "convergence criteria" under the Maastricht Treaty with regard to ratios of the budget deficit and level of public indebtedness to GDP in order to be in this select group.
3. Expropriation and Compensation
Expropriation of private property in Austria is rare, and may proceed only on the basis of special legal authorization. It can be instigated only when no other alternative for satisfying the public interest exists, must be exclusively in the public interest, and the owner must receive just compensation. The expropriation process is fully transparent and non-discriminatory towards foreign firms.
4. Dispute Settlement
The Austrian legal system provides an effective means for protecting property and contractual rights of nationals and foreigners. Additionally, Austria is a member of the International Center for the Settlement of Investment Disputes.
5. Performance Requirements/Incentives
Although not required to gain access to tax incentives, performance requirements may be imposed when foreign investors seek financial or other assistance from the Austrian Government. There is no requirement, however, that nationals hold shares in foreign investments, that the share of foreign equity be reduced over time, or that technology be transferred.
6. Right to Private Ownership
Foreign and domestic private enterprises are free to establish, acquire, and dispose of interests in business enterprises, with the exception of state monopolies, broadcasting, railroads, and utilities. As the government continues to pursue privatization, some of these traditionally off-limit industries are gradually being opened up to private investment as well.
In most business activities, 100 percent foreign ownership is permitted. Foreign direct investment is restricted only when competing with state-owned companies, monopolies, and utilities. License requirements and reciprocity rules apply to foreign investments only in the banking and insurance sectors. Specific regulations concerning requirements for joint ventures do not exist.
7. Protection of Property Rights
The Austrian legal system protects secured interests in property, both chattel and real. Mortgages are recognized, if the underlying contracts are valid, and are on file with the land register. The land register provides a reliable system for recording interests in property. For any agreement pertaining to real estate to be effective, the agreement must be entered with the land register. This requires approval of the Land Transfer Commission or the Office of the Provincial Governor. Any interested party has access to the land register.
Austria has laws to protect intellectual property rights, including patent and trademark laws, a law protecting industrial designs and models, and copyright law, all of which offer the holder protection. Legislation also protects three-dimensional semiconductor chip layout design.
Austria is a party to the World Intellectual Property Organization and several intellectual property conventions: the European Patent Convention, the Patent Cooperation Treaty, the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purpose of Patent Procedure, and the Madrid Trademark Agreement. To meet its WTO TRIPS (World Trade Organization Treaty on Intellectual Property) agreement obligations, Austria amended its patent law for an extension of the patent term, so that effective January 1, 1996, patents on inventions are valid up to 20 years after application. Since both the United States and Austria are members of the "Paris Union" International Convention for the Protection of Industrial Property, American investors are entitled to the same kind of protection under Austrian patent legislation as Austrian nationals. In accordance with the Madrid Agreement, Austria's protection period for trademarks is ten years, with the option to extend for another ten years, if registration is renewed before expiration.
Trade secrets are protected by various regulations. For example the right to privacy, data protection regulations, and the federal statistics law prevent publication of production data, provided there are four producers or less.
Austrian copyright law grants the author the exclusive right to publish, distribute, copy, adapt, translate, and broadcast his work. Infringement proceedings, however, can be time consuming and complicated. On April 1, 1996, Austria amended its copyright law to implement EU directives on intellectual property rights. This amendment introduced a compulsory license fee for the public showing of films in hotels.
8. Regulatory System: Laws and Procedures
Although enforcement procedures are bureaucratic and cumbersome, tax and labor laws, as well as health and safety standards, are applied uniformly and do not influence the sectoral allocation of investments. In preparation for entry into the EU, Austrian regulations were brought into EU compliance. As a result, the Austrian business climate has become more liberal and entrepreneurial.
9. Efficient Capital Markets and Portfolio Investment
A broad variety of credit and portfolio investment instruments are traded in an open capital market. Foreign firms have access to this local market without restrictions and are free to use foreign credit markets as well. A 1993 amendment to the Stock Exchange Act provides for greater transparency and establishes criminal penalties for insider trading. However, full transparency has not yet been achieved.
Legal, regulatory, and accounting systems are transparent and consistent with international norms.
Austria has a highly developed and sound banking system with worldwide correspondent relationships, as well as representative offices and branches in the United States and other major financial centers. Total assets of Austria's five largest banks amounted to AS 2,000 billion (USD 198.4 billion) in 1995.
10. Political Violence
There have been no reports of politically motivated damage to projects. Civil disturbances are extremely rare.
11. Corruption
The Austrian Penal Code contains penalties for bribery which include a fine of up to 430 USD per day for 360 days, or five years imprisonment. Under the Penal Code, any person who bribes an Austrian civil servant or a manager of an Austrian public enterprise is subject to criminal penalties. The official or manager who accepts such bribes is also penalized. The Penal Code does not have a provision regarding bribery of foreign officials.
Grey market payments to Austrians (for example, private commissions paid to sales personnel) are only tax deductible if they do not violate any Penal Code regulations. Grey market payments made outside of Austria to a foreigner, whether a civil servant or manager, are not subject to the Austrian Penal Code, and are thus tax deductible. If a deduction is allowed, the government may request that the name of the recipient be disclosed.
The Federal Ministry of Justice has the primary responsibility for prosecuting acts of corruption, but in the case of public tenders, the Federal Chancellery may also become involved.
B. Bilateral Investment Agreements
Austria has bilateral investment agreements in force with Albania, Argentina, Cape Verde, China, Estonia, Hungary, Latvia, Malaysia, Morocco, Poland, Romania, South Korea, and Turkey. The agreement with the former Czechoslovakia is applied to both the Czech Republic and Slovakia. Agreements with Paraguay, Tunisia, and Vietnam, as well as a new agreement with Romania, have been signed, but are not yet in effect. Additional agreements with Algeria, Armenia, Belarus, Bulgaria, Georgia, Hong Kong, Kuwait, Kyrgyzstan, Lithuania, South Africa, Ukraine, and Uzbekistan have been initialed. An agreement with the former Soviet Union applies provisionally to its successor states, with the exception of Russia, which has a separate protocol. An agreement with the former Yugoslavia applies provisionally only to Croatia and Slovenia. All provisional agreements will have to be renegotiated.
Under these agreements, investment disputes that cannot be settled amicably may be submitted to the International Center for Settlement of Investment Disputes or an arbitration court according to the UNCITRAL arbitration regulations.
C. OPIC and other Investment Insurance Programs
OPIC programs are not available for Austria. OPIC has a cooperation agreement with Austria's Finance Guarantee Company, enabling U.S. firms to secure joint-venture investments with Austrian partners in Central and Eastern Europe. Austria is not a member of the Multilateral Investment Guarantee Agency (MIGA) and has no plans to join it.
D. Labor
Austria has a highly educated labor force of 3.7 million people. Depending on labor demand, government policies limit the number of foreign workers to between 8 and 10 percent of the salaried workforce. In 1995 the number of "guest workers" averaged 300,300. Scope for the employment of additional foreign labor is severely constrained. The Residence Law and the Foreign Workers Employment Law, expected to be enacted in 1996, will exempt skilled U.S. labor (managers and their dependents) from an increasingly restrictive quota system. While demographic trends indicate little growth in the labor force in the 1990's, other factors, such as productivity gains, industrial restructuring, measures to increase the number of women in the workforce, and measures to raise the retirement age, indicate an adequate labor supply for the foreseeable future. Shortages of highly specialized labor, however, may occur.
Compared to other EU countries, Austria has a low unemployment rate of 3.9 percent in 1995, according to EU calculations. However, domestic statistics indicate unemployment has reached record post-WW II levels in the second half of 1995/early 1996 of up to 9 percent. Legislation enacted in early 1996 is designed to counteract the rising unemployment of older workers. It provides financial bonuses for companies hiring workers age 50 and above, and envisions penalties for businesses laying off workers within this age group. The new SPO-OVP coalition government of March 1996 has promised to create some 250,000 jobs by the year 2000, but few concrete job-creation projects have been put in place so far.
Terms of employment are closely regulated by law in Austria. Working hours, minimum vacation time, maternity leave, juvenile work allowances, statutory separation notice, protection against dismissal, and the right to severance payment are all secured by law.
Austrian social insurance is compulsory and comprises health insurance, old-age pension insurance, unemployment insurance, and accident insurance. Social insurance contributions are a percentage of total monthly earnings and are shared by employers and employees.
High non-wage payroll costs are frequently cited as a reason for Austria's relatively high labor costs. While labor challenges this perception, it coincides with government plans to freeze these costs.
About 50 percent of the work force is unionized. Shop stewards must be consulted on various issues. Codetermination rights of employees are regulated by law. At least one-third of the members of a corporation's board of directors must come from the firm's staff. Labor-management relations are generally harmonious and strikes are rare. Despite the government's decision to cut several social benefits as part of a budget balancing plan, there were practically no strikes in 1994 or 1995. Austria generally adheres to the International Labor Organization (ILO) conventions protecting workers' rights.
Collective bargaining revolves mainly around wage adjustments, fringe benefits, and reduction of the work week. While the law still provides for a maximum of 40 hours per week, collective bargaining agreements provide for a work week of 38 or 38.5 hours per week for more than half of all employees. A legal framework for flexible working hours was introduced several years ago, and in those sectors where it has been implemented, it is very popular. With the support of most sectors of the economy, the government has signaled that it will review restrictive work time schedule legislation in 1996. Labor continues to push for a minimum wage of AS 168,000 (USD 16,667) per year (including Christmas and vacation bonuses), but growing competition among job seekers is expected to exert downward pressure on most wage scales.
E. Foreign-Trade Zones/Free Ports
Austria has four foreign trade zones, in Vienna, Linz, Graz, and Solbad Hall, where products of foreign origin may be stored, displayed, sampled, mixed, sorted, repacked or reexported without the obligation to pay duty. The impact of these zones has been limited, and foreign investors have shown little interest.
F. Capital Outflow Policy
There are no restrictions on cross-border capital movements for inflows or outflows.
Austrian firms investing abroad are eligible for financing and guarantee programs. Refinancing of commercial bank loans is available to acquire and participate in firms abroad. With the aim of promoting Austrian exports, there are startup loans with favorable terms for investment and joint ventures in developing countries. Financing is also available for projects in industrialized countries for marketing, maintenance, and assembly of goods made in Austria, or to promote the sale of Austrian services. To be eligible for these finance programs, government guarantees to cover both economic and political risks are required. A separate guarantee program operated by the East-West Fund provides risk sharing guarantees for direct investments abroad and insolvency risk guarantees.
G. Foreign Direct Investment Statistics
See Appendix D.
H. Major Foreign Investors
Close to 300 U.S. firms hold investments in Austria, which range from simple sales offices to major production facilities. The following is a short list of U.S. firms holding major investments in Austria. A more comprehensive list is available from the American Chamber of Commerce in Austria (phone: +43.1.319.5751, fax: +43.1.319.5151).
Following is a brief list of firms headquartered in other countries than the U.S. holding major investments in Austria.
VIII. Trade And Project Financing
A. Synopsis of Banking System
A wide range of credit and financial instruments is offered by all of Austria's banks. The Austrian banking system is highly developed, with worldwide correspondent relations, as well as offices and branches in the United States and other major financial centers. Large Austrian banks also have branches, subsidiaries, and joint venture operations in Central and Eastern Europe. Many major foreign banks, including American, have operations in Austria.
B. Foreign Exchange Controls Affecting Trading
Austria has had a fully liberalized foreign exchange regime since 1991. There are no limitations on any cross-border payments, whether related to foreign trade, capital investments, or other transactions, except to countries under UN sanctions.
C. General Financing Ability
General financing to establish foreign operations in Austria is readily available. Foreign firms enjoy access to Austrian credit and capital markets without restrictions.
D. How to Finance Exports/Methods of Payment
American exporters to Austria may use domestic or foreign financing to make a wide range of payment arrangements, from advances to letters of credit and bank guarantees. Austrian banks can also help arrange financing for export and investment transactions in Central and Eastern Europe. The Austrian Government has neither a countertrade policy nor specific regulations in this field.
E. Types of Available Export Financing and Insurance
OPIC generally does not operate in Austria, although it has a cooperation agreement with the Austrian Finance Guarantee Company to insure investments in Central and Eastern Europe. The Ex-Im Bank has had no active programs in Austria in recent years. The risk of political or economic disturbances that could disrupt trade or investment projects in Austria is practically nonexistent.
F. Project Financing Available
Commercial financing is readily available from Austrian banks and institutions on normal market terms, but multilateral institutions are not active in Austria. Concessionary financing may be available for U.S. firms in association with Austrian companies for projects in neighboring Central and Eastern European countries.
G. List of Banks with Correspondent U.S. Banking Arrangements
Austrian Branches/Subsidiaries of U.S. Banks:
American Express Bank Ltd.
Kaerntnerstr. 21-23
A-1015 Vienna, Austria
Phone: (43 1) 515 67-0
Fax: (43 1) 515 67-3
Citibank Austria
Lothringerstr. 7
A-1015 Vienna, Austria
Phone: (43 1) 717 17
Fax: (43 1) 712 97 07
Merrill Lynch Bank
Bauernmarkt 2
A-1010 Vienna, Austria
Phone: (43 1) 531 40
Fax: (43 1) 535 02 27
Mercurbank
Kaerntner Ring 8
A-1015 Vienna, Austria
Phone: (43 1) 501 32-0
Fax: (43 1) 501 32-341
Austrian Banks with Subsidiaries in the U.S.:
| Bank Austria | Bank Austria |
| Am Hof 2 | 565 Fifth Avenue |
| A-1010 Vienna, Austria | New York, NY 10017 |
| Phone: (43 1) 711 91-0 | Phone: (212) 880 1000 |
| Fax: (43 1) 711 91-6155 | Fax: (212) 880 1110 |
| Creditanstalt Bankverein (CA) | Creditanstalt |
| Schottengasse 6 | 245 Park Ave, 27th Floor |
| A-1010 Vienna, Austria | New York, NY 10167 |
| Phone: (43 1) 531 31-0 | Phone: (212) 856 1000 |
| Fax: (43 1) 531 31-7566 | Fax: (212) 856 1234 |
| GiroCredit | GiroCredit |
| Schubertring 5 | Park Avenue Tower |
| A-1010 Vienna, Austria | 29th Floor |
| Phone: (43 1) 711 94-0 | 65 East 55th Street |
| Fax: (43 1) 713 70 32 | New York, NY 10022 |
| Phone: (212) 644 0660 | |
| Fax: (212) 421 2719 | |
| Raiffeisen Zentralbank | DG-Bank House |
| Am Stadtpark 9 | 609 Fifth Avenue |
| A-1030 Vienna | New York, NY 10017-1021 |
| Phone: (43 1) 717 07-0 | Phone: (212) 593 7593 |
| Fax: (43 1) 717 07-1715 | Fax: (212) 593 9870 |
A. Business Customs
Business practice and etiquette is basically the same in Austria and America; the major difference is the relative formal atmosphere in which business activities generally take place in Austria. For example, when making appointments with prospective buyers or clients, it is recommended to make initial contact well in advance, either in writing or by phone, and to agree to meet wherever and whenever it is most convenient for the other person. Another example of Austrian formality is the widespread use of titles, be they in the form of a university degree or a position in a firm or in the government.
Correspondence and visits play a significant role in the conduct of business in Austria. Clarity and continuity in communications is very important. Prompt handling of correspondence is very much appreciated and helps to compensate for the distance between the two countries. When possible, offers and documentation should be in German. Marketing and sales policies should be oriented toward establishing lasting business relationships.
Austrians are generally well disposed toward Americans. Showing understanding for the Austrian way of doing things will prove rewarding for the American business person.
B. Travel Advisory and Visas
There are no Travel Warnings for Austria, nor are visas necessary for visits to Austria lasting less than three months. Non-EU citizens will require a residence permit for longer stays.
C. Holidays
The following holidays will be observed in Austria from October
1, 1996, to December 31, 1997:
| October 26, 1996 | Saturday | National Day |
| November 1, 1996 | Friday | All Saint's Day |
| December 8, 1996 | Sunday | Immaculate Conception |
| December 25, 1996 | Wednesday | Christmas Day |
| December 26, 1996 | Thursday | St. Stephen's Day |
| January 1, 1997 | Wednesday | New Year's Day |
| January 6, 1997 | Monday | Epiphany |
| March 31, 1997 | Monday | Easter Monday |
| May 1, 1997 | Thursday | Labor Day |
| May 8, 1997 | Thursday | Ascension Day |
| May 19, 1997 | Monday | Whit Monday |
| May 29, 1997 | Thursday | Corpus Christi Day |
| August 15, 1997 | Friday | Assumption Day |
| October 26, 1997 | Sunday | National Day |
| November 1, 1997 | Saturday | All Saint's Day |
| December 8, 1997 | Monday | Immaculate Conception |
| December 25, 1997 | Thursday | Christmas Day |
| December 26, 1997 | Friday | St. Stephen's Day |
In addition, business visitors should note that the Austrian holiday season is in July and August, and that many decision-makers take extended vacations during that time - often as long as 5-6 weeks. Business-oriented visits or events are thus not recommended during these two months.
Another factor to keep in mind is that many offices and businesses close Friday afternoons, reflecting the widely implemented 38.5 hour work week. Business visits planned for a Friday are therefor probably limited to 1-2 appointments in the morning.
D. Business Infrastructure
Transportation: Direct flights connect Vienna to several U.S. cities. Austria's modern highways connect most cities, and numerous border crossings into neighboring countries are easily accessible. Air travel between major cities in Austria and in the region is available, and overland travel by train or bus, also to neighboring countries, is comfortable and very reliable.
Major Austrian cities have efficient public transportation systems, including buses, subways, and streetcars. Taxi service is readily available. It should be kept in mind, however, that taxis are generally requested by telephone or at designated taxi-stands, and it is difficult to hail cabs in the street. A variety of car rental agencies are located in major cities, with all major U.S. rental agencies represented.
Language & Communications: Austria's official language is German, and the importance of German-language trade literature, catalogs, and instructions for the use and servicing of products cannot be overemphasized. The agent or local representative in Austria who has such material is in a far better competitive position than one who must show prospective customers trade literature in English.
Most large commercial and industrial enterprises, especially those specializing in international trade, can correspond in English, French, Spanish, and often one or more Slavic languages, in addition to German. As many Austrian firms operate as a kind of bridge to East/Central Europe, it is common that the languages of that region also be correspondence languages of many Austrian firms.
Austria has efficient and reliable postal and telephone services. Fax machines are widely used, and telex facilities may also be available, though they are on the decline. Email and other electronic forms of communication, on the other hand, are still in an early stage of development. It is primarily larger firms and firms specializing in computer and communications technology that are actively integrating these new means of communication into their procedures. Growth in this area, however, is estimated to be very high and electronic communications are expected to be prevalent by the turn of the century.
Accommodations and Food: Business accommodations are readily available, provided by a wide variety of hotels and guest houses throughout the country. The food is excellent, with a variety to suit all tastes. Prices vary, ranging from the homey 'Gasthaus', which offers local dishes at very affordable prices, to the elegant restaurants of five-star hotels. Austrian tap water is safe to drink.
Appendix A. Country Data
| Population | 8.04 million |
| Population Growth Rate | 0.3 percent |
| Religion(s) | Roman Catholic - 78 percent |
| Protestant - 5 percent | |
| Government | Constitutional Parliamentary Democracy |
| Language | German - 92 percent |
| Work Week | 37.5 - 40 Hours, depending on the industry |
Appendix B. Domestic Economy
| . | 1995 | 1996 | 1997 |
| GDP | . | . | . |
| (USD billion, current prices) (1) | 233.4 | 239.8 | 246.1 |
| GDP Growth Rate (in percent) | 4.0 | 2.7 | 2.6 |
| GDP per Capita (USD) (1) | 28,980.0 | 29,690.0 | 30,400.0 |
| Government Spending | . | . | . |
| (as percent of GDP) | 32.0 | 30.9 | 29.9 |
| Inflation (percent) | 2.2 | 2.1 | 1.9 |
| Unemployment (percent) (2) | 6.6 | 7.3 | 8.0 |
| (3) | 3.8 | 3.9 | 4.2 |
| Foreign Exchange Reserves | . | . | . |
| (USD billion) (1) | 23.6 | N/A | N/A |
| Average Exchange Rate | . | . | . |
| for USD 1.00 | 10.08 | N/A | N/A |
| Foreign Debt (USD billion) (1) | 28.9 | 31.1 | 32.2 |
| Debt Service Ratio (4) | 4.6 | 4.3 | 3.7 |
Footnotes:
(1) all figures converted at the 1995 annual average exchange
rate of U.S. Dollar 1.00 equalling Austrian Schillings 10.08.
(2) Traditional Austrian method.
(3) EU method.
(4) Ratio of principal and interest payments on foreign debt to foreign income from exports of goods and services.
Appendix C. Trade
| (USD million, except where noted) (1) | 1995 | 1996 | 1997 |
| Total Austrian exports (fob) | 55,520.0 | 58,300.0 | 61,550.0 |
| Total Austrian imports (cif) | 67,000.0 | 68,820.0 | 71,250.0 |
| U.S. exports to Austria | N/A | N/A | N/A |
| U.S. imports from Austria | N/A | N/A | N/A |
| U.S. Share of Austrian imports | . | . | . |
| (in percent) | N/A | N/A | N/A |
| Trade Balance with Three | . | . | . |
| Leading Partners | . | . | . |
| Germany | N/A | N/A | N/A |
| Italy | N/A | N/A | N/A |
| Switzerland | N/A | N/A | N/A |
Footnote:
(1) all figures converted at the 1995 annual average exchange
rate of U.S. Dollar 1.00 equalling Austrian Schillings 10.08.
Appendix D. Investment Statistics
Table 1:
Foreign Direct Investment in Austria 1989-1993
| Year | Number of firms with direct foreign participation | Nominal capital (AS billion) |
Total equity (1) |
| 1989 (2) | 2,193 | 51.5 | 94.4 |
| 1990 | 2,221 | 55.2 | 105.5 |
| 1991 | 2,172 | 58.5 | 110.8 |
| 1992 | 2,209 | 61.1 | 127.3 |
| 1993 | 2,204 | 62.5 | 138.1 |
Footnotes:
(1) Total equity comprises nominal capital, statutory and voluntary
reserves, profits/losses carried forward, and net credit position;
(2) Starting 1989, the survey covered only firms with at least AS 1 million nominal capital.
Table 2:
Foreign Direct Investment by Country of Origin 1989-1993
(in percent of nominal capital)
| Year | U.S. | Switzerland | Germany Liechtenstein | Netherlands | Others |
| 1989 | 8 | 20 | 36 | 10 | 26 |
| 1990 | 8 | 19 | 37 | 10 | 26 |
| 1991 | 8 | 18 | 37 | 9 | 28 |
| 1992 | 7 | 18 | 37 | 10 | 28 |
| 1993 | 7 | 18 | 38 | 9 | 28 |
Table 3:
Foreign Direct Investment In Austria by Industry Sectors in
1993
| Sector | Total equity | Employees |
| (AS billion) | .in 1,000 | |
| Industry: | .. | . |
| Metals, vehicles | 20.9 | 35 |
| Electrical engineering | 6.8 | 29 |
| Petroleum, chemicals | 16.2 | 20 |
| Paper, wood | 3.9 | 5 |
| Textiles, clothing, leather | 2.6 | 11 |
| Food, drink, tobacco | 2.8 | 5 |
| Building and allied trades | 5.1 | 9 |
| Miscellaneous (incl. holding comp.) |
26.0 | 3 |
| Subtotal Industry | 84.3 | . |
Non-industry: | .. | .. |
| Energy, transport | 2.4 | . |
| Trade | 24.8 | 53 |
| Tourism | 2.3 | 6 |
| Small-scale industry and crafts | 4.5 | 8 |
| Banking, finance | 7.1 | 2 |
| Insurance | 8.2 | 14 |
| Miscellaneous | 4.6 | 5 |
| Subtotal Non-industry | 53.8 | 92 |
| TOTAL | 138.1 | 210 |
Note: Differences due to rounding.
Table 4:
Austrian Direct Investment Abroad 1989-1993
| Year | Number of firms with Austrian direct investment | Nominal capital (AS billion) |
Total assets (1) |
| 1989 (2) | 839 | 16.8 | 30.4 |
| 1990 | 1,127 | 28.4 | 45.6 |
| 1991 | 1,188 | 38.5 | 64.5 |
| 1992 | 1,290 | 45.4 | 77.9 |
| 1993 | 1,495 | 60.4 | 98.5 |
Footnotes:
(1) Total assets comprises nominal capital, other equity including
exchange rate adjustments, and net credit position;
(2) The survey covers only firms with at least AS 1 million nominal capital.
Table 5:
Austrian Direct Investment Abroad by Country of Destination
1989-1993
(in percent of nominal capital)
| Year | U.S. | Switzerland | Germany Lichtenstein | U.K. | Hungary | Others |
| 1989 | 12 | 18 | 33 | 4 | 4 | 29 |
| 1990 | 7 | 15 | 24 | 6 | 12 | 36 |
| 1991 | 7 | 12 | 21 | 11 | 19 | 30 |
| 1992 | 8 | 10 | 21 | 10 | 21 | 30 |
| 1993 | 9 | 8 | 20 | 9 | 20 | 34 |
Table 6:
Austrian Direct Investment Abroad by Industry Sectors in 1993
| Sector | Nominal capital | Employees |
| . | (AS billion) | in 1,000 |
| Industry: | ||
| Metals, vehicles | 7.3 | 12.2 |
| Electrical engineering | 2.4 | 7.1 |
| Petroleum, chemicals | 8.7 | 8.2 |
| Paper, wood | 4.9 | 5.4 |
| Textiles, clothing, leather | 0.9 | 5.1 |
| Food, drink, tobacco | 3.1 | 5.2 |
| Building and allied trades | 5.5 | 13.0 |
| Miscellaneous | . | . |
| (incl.holding companies) | 20.8 | 0.5 |
| Subtotal Industry | 53.5 | 56.6 |
Non-industry: | ||
| Energy, transport | 1.8 | 1.0 |
| Trade | 14.8 | 16.2 |
| Tourism | 2.4 | 3.8 |
| Small-scale industry and crafts | 2.8 | 4.8 |
| Banking, finance | 7.2 | 3.8 |
| Insurance | 2.7 | 3.7 |
| Miscellaneous | 3.3 | 0.8 |
| Subtotal Non-industry | 44.9 | 34.3 |
| Total | 98.5 | 90.9 |
Note: Differences due to rounding.
Appendix E. U.S. & Austrian Contacts
1. Austria Government Agencies
Embassy of Austria in the United States
3524 International Court
Washington, DC 20008
Phone: (202) 895-6700
Federal Agency for Industrial Cooperation and Development
| In the U.S.: | In Austria: |
| Austrian Business Agency | Austrian Business Agency |
| 747 Third Avenue | Opernring 3-5 |
| New York, NY 10017 | A-1010 Vienna, AUSTRIA |
| Phone: (212) 980 7970 | Phone: (43 1) 588 58-0 |
| Fax: (212) 980 7975 | Fax: (43 1) 586 86 59 |
Austrian Economic Ministry
Stubenring 1
A-1010 Vienna, AUSTRIA
Phone: (43 1) 711 00-0
Fax: (43 1) 713 93 11 or 713 79 95
Austrian Ministry of Agriculture and Forestry
Stubenring 1
A-1010 Vienna, AUSTRIA
Phone: (43 1) 711 00-0
Fax: (43 1) 713 93 11 or 713 79 95
2. Austrian Trade Associations/ Chambers of Commerce
Austrian Trade Commission operates offices in the U.S. at the following locations:
Office in New York:
150 East 52nd Street
2nd Floor..
New York, NY 10022
Phone: (212) 421 5250
Fax: (212) 751 4675
Office in Illinois:
500 North Michigan Avenue
Suite 1950
Chicago, IL 60611
Phone: (312) 644-5556
Fax: (312) 644-6526
Office in Georgia:
1 Peach Tree Center
Suite 4130
303 Peach Tree Street, N.E.
Atlanta, GA 30308
Phone: (404) 522 3335
Fax: (404) 525 2663
Office in California:
1601 Wilshire Blvd.
Suite 2420
Los Angeles, CA 90025
Phone: (310) 477 9988
Fax: (310) 477 1643
Office in D.C.:
1350 Connecticut Avenue N.W.
Suite 501
Washington, DC 20036
Phone: (202) 835-8962
Fax: (202) 835-8960
American Chamber of Commerce in Austria
Porzellangasse 35
A-1090 Vienna, AUSTRIA
Phone: (43 1) 319 57 51
Fax: (43 1) 319 51 51
Wirtschaftskammer Oesterreich
(Austrian Federal Economic Chamber)
Wiedner Hauptstrasse 64
A-1045 Vienna, Austria
Phone: (43 1) 501 05-4204
Fax: (43 1) 502 06-255
Fachverband der Elektro- und Elektronikindustrie Oesterreichs
(Association of the Electric and Electronic Industry)
Mariahilfer Strasse 37-39
A-1060 Vienna, Austria
Phone: (43 1) 588 39-0
Fax: (43 1) 586 69 71
ADV Arbeitsgemeinschaft fur Datenverarbeitung
(EDP Association)
Tratternhof 2
A-1010 Vienna, Austria
Phone: (43 1) 533 09 13
Fax: (43 1) 533 09 13-77
Oesterreichische Computer Gesellschaft
(Austrian Computer Association)
Wollzeile 1-3
A-1010 Vienna, Austria
Phone: (43 1) 512 02 35
Fax: (43 1) 513 77 35
OEGUT - Oesterreichische Gesellschaft fuer Umwelt und Technik
(Austrian Association for Environment and Technology)
Reisnerstrasse 40
A-1030 Vienna, Austria
Phone: (43 1) 718 33 03
Fax: (43 1) 718 33 03-22
3. Austrian Market Research Firms
Consent Betriebsberatung Ges.m.b.H
Dommayergasse 4
A-1130 Vienna, Austria
Phone: (43 1) 877 30 03-0
Fax: (43 1) 876 47 04
Dr. Fessel GfK Institut fuer Marktforschung
Franz-Josefs Kai 47
A-1010 Vienna, Austria
Phone: (43 1) 534 96
Fax: (43 1) 534 96-194
GmB Gesellschaft fur Marketingberatung
Arnethgasse 50
A-1160 Vienna, Austria
Phone: (43 1) 45 57 01
Fax: (43 1) 45 49 57
Integral Markt- und Meinungsforschungs Ges.m.b.H.
Mohsgasse 2/6
A-1030 Vienna, Austria
Phone: (43 1) 799 19 94-0
Fax: (43 1) 799 19 94-18
Institut fur Markt- und Meinungsforschung Ges.m.b.H.
Kaiserstrasse 55
A-1070 Vienna, Austria
Phone: (43 1) 526 55 84-0
Fax: (43 1) 526 55 84-42
Dr. Alkier Ges.m.b.H.
Lindengasse 10
A-1070 Vienna, Austria
Phone: (43 1) 523 62 63
Fax: (43 1) 523 92 65
4. Austrian Commercial Banks
The major Austrian banks are:
| Creditanstalt-Bankverein AG | Bank Austria AG |
| Schottengasse 6 | Am Hof 2 |
| A-1010 Vienna | A-1010 Vienna |
| Austria | Austria |
| Phone: (43 1) 531 31-0 | Phone: (43 1) 711 91-0 |
| Fax: (43 1) 531 31-7566 | Fax.: (43 1) 711 91-6155 |
| Girocredit Bank AG | Raiffeisen Zentralbank |
| A-1011 Vienna | Shubertring 5, Oesterreich AG |
| Austria | Am Stadtpark 9 |
| Phone: (43 1) 711 94-0 | A-1030 Vienna |
| Fax: (43 1) 713 70 32 | Austria |
| Fax: (43 1) 717 07-1715 | Phone: (43 1) 717 07-0 |
5. The Commercial Service
| U.S. Embassy in Austria | To mail from the United States: |
| Boltzmanngasse 16 | American Embassy Vienna |
| A-1091 Vienna, Austria | Department of State |
| Phone: (43 1) 313 39 | Washington, DC 20521-9900 |
| Fax: (43 1) 310 69 17 | |
| E-mail: OVienna@DoC.gov | |
| Internet: http://www.usia.gov/posts/vienna.html |
6. U.S.-Based Multipliers
The Association for Manufacturing Technology
7901 Westpark Dr.
McLean, VA 22102-4269
Phone: (703) 893-2900
Health Industry Manufacturers Association
1200 G. Street, N.W. Suite 400
Washington, DC 20005
Phone: (202) 783-8700
American Electronics Association
| 5201 Great America Parkway Santa Clara, CA 95054 Phone: (408) 987-4200 | 1225 Eye Street, N.W. Washington, DC 20005 Phone: (202) 682-9110 |
Dental Manufacturers of America
1118 Land Title Bldg.
Broad & Chestnut Cst.
Philadelphia, PA 19110
Phone: (215) 563-2588
National Electrical Manufacturers Association
Diagnostic Imaging & Therapy Systems Div.
2101 L Street, N.W.
Suite 300
Washington, DC 20037
Phone: (202) 457-8400
Telecommunications Industry Association (TIA)
2001 Pennsylvania Ave, N.W.
Suite 800
Washington, D.C. 20006-1813
Phone: (202) 457 4912
Environmental Industry Association
4301 Connecticut Ave, N.W.
Washington, D.C. 20008
Phone: (202) 244 4700
U.S.-Austrian Chamber of Commerce
165 West 46th Street
New York, NY 10019
Phone: (212) 819-0117
7. Washington-Based U.S. Government Contacts
John Larsen/Brenda Fisher
Austria Desk, Room 3049
U.S. Department of Commerce
14th & Constitution Ave, N.W.
Washington, DC 20230
Phone: (202) 482-2435 (B. Fisher)
Phone: (202) 482-2434 (J. Larsen)
Fax: (202) 482-2897
E-mail: John Larsen@ITA@ITA1
E-mail: Brenda Fisher@ITA@ITA1
Merritt Chesley
Inter-America & Western Europe Division
Room 5520S
U.S. Department of Agriculture
Washington, DC 20250-10