Executive Summary

Austria offers a stable and attractive climate for foreign investors, including a well-developed market economy that welcomes foreign direct investment, particularly in technology and R&D. The most popular investment destinations in recent years have been the automotive, pharmaceuticals, and financial sectors.   The country benefits from a skilled labor force, and a high standard of living, with its capital Vienna consistently placing at the top of global quality-of-life rankings.

With more than 50 percent of its GDP derived from exports, Austria’s economy is closely tied to other EU economies; Germany is its largest trading partner, followed by the United States.  The economy features a large service sector and an advanced industrial sector specialized in high-quality component parts, especially for vehicles.  The country’s location between Western European industrialized nations and growth markets in Central, Eastern, and Southeastern Europe (CESEE) has led to a high degree of economic, social, and political integration with fellow European Union (EU) member states and the CESEE.

In October 2019 a new digital services tax was signed into law, effective on January 1, 2020.    This 5% tax on advertising revenues targets companies with global revenues exceeding €750 million ($848 million) and revenues within Austria of at least 25 million euros, with a carve-out for Austria’s national broadcaster (ORF), which would otherwise be taxed.

Austria also maintains a relatively high overall tax burden and a complex regulatory system with extensive bureaucracy.

Some 300 U.S. companies have investments in Austria, many of whom have expanded over time.  U.S. Foreign Direct Investment into Austria totaled approximately EUR 10.5 billion (USD 11.8 billion) at the end of 2019, according to the Austrian National Bank, and U.S. companies support over 17,000 jobs in Austria.

Following solid GDP growth of 1.6% in 2019, leading forecasters anticipate a 7-7.1% decrease in 2020 GDP due to COVID-19.  The economy is predicted to make a strong recovery in 2021, ranging from 4.3-5.6% GDP growth.

Austria’s government took quick, decisive measures to combat the spread of COVID-19, closing much of the retail sector and mandating a strict stay-at-home policy on March 16, 2020. As a result of their success in reducing infection rates, Austria was one of the first western countries to reopen their economy in stages starting April 14, 2020.   Because the country is highly dependent on both foreign trade and tourism, recovery will ultimately depend on the impact of the virus on global travel, international supply chains, and economic recovery in Austria’s largest export markets.

Austria offers a wide array of investment incentives to attract industry and jobs in high-tech, R&D, and economically disadvantaged regions.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2019 12 of 180
World Bank’s Doing Business Report 2020 27 of 190
Global Innovation Index 2019 21 of 129
U.S. FDI in partner country ($B USD, historical stock positions) 2019 USD 8.58
World Bank GNI per capita 2018 USD 49,310

2. Bilateral Investment Agreements and Taxation Treaties

There is currently no bilateral investment treaty  BIT)between the United States and Austria. Austria has BITs in force with: Albania, Algeria, Argentina, Armenia, Azerbaijan, Bangladesh, Belarus, Belize, Bosnia and Herzegovina, Bulgaria, Chile, China, Croatia, Cuba, Czech Republic, Egypt, Estonia, Ethiopia, Georgia, Guatemala, Hong Kong, Hungary, , Iran Jordan, Kazakhstan, Republic of Korea, Kuwait, Latvia, Lebanon, Libya, Lithuania, North Macedonia, Malaysia, Malta, Mexico, Moldova, Mongolia, Montenegro, Morocco, Namibia, Oman, Paraguay, Philippines, Poland , Romania, Russia, Saudi Arabia, Serbia, , Slovakia, Slovenia, Tajikistan, Tunisia, Turkey, Ukraine, United Arab Emirates, Uzbekistan, Vietnam, and Yemen. BITs with Cambodia, Kyrgyzstan, Nigeria, and Zimbabwe have been signed, but have not yet entered into force.

On March 16, 2018, the European Court of Justice determined that arbitration clauses in Member State BITs are incompatible with EU law; subsequently, Austria agreed with the European  Commission to terminate its 12  intra-EU BITS (as did the partner Member States), but negotiations on the date of termination are ongoing with these Member States.

Austria and the United States are parties to a bilateral double taxation treaty covering income and corporate taxes, which went into effect in January 1998. A separate bilateral double taxation treaty (covering estates, inheritances, gifts and generation-skipping transfers) has been in effect since 1982 (amended in 1999).  Austria and the United States signed an intergovernmental agreement in accordance with the Foreign Account Tax Compliance Act (FATCA)  in 2014, covering U.S. citizen bank account holders in Austria.  Austria has 90 additional double taxation treaties in force with other countries. Two other Austrian agreements, with Switzerland and Liechtenstein, on cooperation in the areas of taxation and financial markets (which entered into force in January and April 2013 respectively) cover the treatment of anonymous accounts from Austrian citizens in those countries.

6. Financial Sector

Capital Markets and Portfolio Investment

Austria has sophisticated financial markets that allow foreign investors access without restrictions. The government welcomes foreign portfolio investment.  The Austrian National Bank (OeNB) regulates portfolio investments effectively.

Austria has a national stock exchange that currently includes 62 companies on its regulated market and several others on its multilateral trading facility (MTF).  The Austrian Traded Index (ATX) is a price index consisting of the 20 largest stocks on the market and forms the most important index of Austria’s stock market.  The size of the companies listed on the ATX is roughly equivalent to those listed on the MDAX in Germany.  The market capitalization of Austrian listed companies is relatively small compared to the country’s western European counterparts, accounting for 31% of Austria’s GDP, compared to 54% in Germany or 150% in the United States.

Unlike the other market segments in the stock exchange, the Direct Market and Direct Market Plus segments, targeted at SMEs and young, developing companies, are subject only to the Vienna Stock Exchange’s general terms of business, not more stringent EU regulations. These segments also have lower reporting requirements but also greater risk for investors, as prices are more likely to fluctuate, due to the respective companies’ low level of market capitalization.

Austria has robust financing for product markets, but the free flow of resources into factor markets (capital, raw materials) could be improved. Overall, financing is primarily available through banks and government-sponsored funding organizations with very little private venture capital in existence. The Austrian government is aware of this issue but has taken few tangible steps to improve the availability of private venture capital.

Austria is fully compliant with IMF Article VIII, all financial instruments are available, and there are no restrictions on payments.  Credit is available to foreign investors at market-determined rates.  Austria’s financial system ranked 30th in the 2019 World Economic Forum’s Global Competitiveness Report, out of 141 countries examined.

Money and Banking System

Due to U.S. government financial reporting requirements, Austrian banks are very cautious in committing the time and expense required to accept U.S. clients and U.S. investors without established U.S. corporate headquarters.

Austria has one of the densest banking networks in Europe with almost 4,000 branch offices registered in 2019.  The banking system is highly developed, with worldwide correspondent banks and representative offices and branches in the United States and other major financial centers.  Large Austrian banks also have extensive networks in Central and Southeast European (CESEE) countries and the countries of the former Soviet Union.  Total assets of the banking sector amounted to EUR 1.02 trillion (USD 1.1 trillion) in 2019 approximately 2.5 times the country’s GDP.  Approximately EUR 400 million of these are held by Austria’s two largest banks, Erste Group and Raiffeisen Bank International (RBI). The Austrian banking sector is considered to be one of the most stable in the world.  Austria’s banking sector is managed and overseen by the Austrian National Bank (OeNB) and the Financial Market Authority (FMA).  Four Austrian banks with assets in excess of EUR 30 billion (USD 34 billion) are subject to the Eurozone’s Single Supervisory Mechanism (SSM), as is Sberbank Europe AG, a Russian bank subsidiary headquartered in Austria, due to its significant cross-border assets, as well as Volksbank Wien AG, due to its importance for the economy.  All other Austrian banks continue to be subject to the country’s dual-oversight bank supervision system with roles for the OeNB and the FMA, both of which are also responsible for policing irregularities on the stock exchange and for supervising insurance companies, securities markets, and pension funds.  Foreign banks are allowed to establish operations in the country with no legal restrictions that place them at a disadvantage compared to local banks.

Foreign Exchange and Remittances

Foreign Exchange

Austria has no restrictions on cross-border capital transactions, including the repatriation of profits and proceeds from the sale of an investment, for non-residents and residents.  The Euro, a freely convertible currency and the only legal tender in Austria and 18 other Euro-zone member states, shields investors from exchange rate risks within the Euro-zone.

Remittance Policies

Not applicable.

Sovereign Wealth Funds

Austria has no sovereign wealth funds.

7. State-Owned Enterprises

Austria has two major wholly state-owned enterprises (SOEs):  The OeBB (Austrian Federal Railways) and Asfinag (highway financing, building, maintenance, and administration).  Other government industry holding companies are bundled in the government holding company OeBAG ( )

The government has direct representation in the supervisory boards of its companies (commensurate with its ownership stake) and OeBAG has the authority to buy and sell company shares, as well as purchase minority stakes in strategically relevant companies.  Such purchases are subject to approval from an audit committee consisting of government-nominated independent economic experts.

OeBAG holds a 53 percent stake in the Post Office, 51 percent in energy company Verbund, 33 percent in the gambling group Casinos Austria, 31.5 percent in the energy company OMV, 28 percent in the Telekom Austria Group, and a few other minor ventures.  Local governments own the majority of utilities, Vienna International Airport, and more than half of Austria’s 264 hospitals and clinics.

Private enterprises in Austria can generally compete with public enterprises under the same terms and conditions with respect to market access, credit, and other such business operations as licenses and supplies. While most SOEs must finance themselves under terms similar to private enterprises, some large SOEs (such as OeBB) benefit from state-subsidized pension systems.  As a member of the EU, Austria is also a party to the Government Procurement Agreement (GPA) of the WTO, which indirectly also covers the SOEs (since they are entities monitored by the Austrian Court of Auditors).

The five major OeBAG companies (Postal Service, Verbund AG, Casinos Austria, OMV, Telekom Austria), are listed on the Vienna stock exchange. In these cases, senior management does not directly report to a minister, but to an oversight board.  However, the government often appoints management and board members, who usually have strong political affiliations.

Austrian laws require advance approval by the Austrian Ministry for Digital and Economic Affairs for foreign acquisitions of a relevant stake ) in enterprises in certain strategic industries (with sales over EUR 700,000, USD 784.000 per year), comprising a wide range of sectors (see Chapter 1).

Privatization Program

The government has not privatized any public enterprises since 2007.  Austrian public opinion is skeptical regarding further privatization and there are no indications of any government privatizations on the horizon. In prior privatizations, foreign and domestic investors received equal treatment.  Despite a historical government preference for maintaining blocking minority rights for domestic shareholders, foreign investors have successfully gained full control of enterprises in several strategic sectors of the Austrian economy, including in telecommunications, banking, steel, and infrastructure.  In March 2020, the government chose not to intervene when the Czech Sazka group increased its stake in the partially state-owned gambling group Casinos Austria to a majority share.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount  
Host Country Gross Domestic Product (GDP) ($M USD) 2019 $446,345 2018 $455,286
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($B USD, stock positions) 2019 $11.81 2018 $8.58 BEA data available at
Host country’s FDI in the United States ($B USD, stock positions) 2019 $14.02 2018 $12.64 BEA data available at
Total inbound stock of FDI as % host GDP 2019 $45.9 2018 45.7% UNCTAD data available at

* Source for Host Country Data:
*Statistics Austria (GDP) 
*Austrian National Bank (Investments) 

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 246,083 100% Total Outward 280,254 100%
Germany 58,170 24% Germany 34,852 12%
Netherlands 32,269 13% Netherlands 33,556 12%
Russia 26,508 11% Luxembourg 15,546 6%
Luxembourg 22,447 9% Country #4 14,773 5%
United Arab Emirates 11,884 5% Country #5 13,458 5%
“0” reflects amounts rounded to +/- USD 500,000.

Austria’s inward investment figures show significant lower numbers for the Netherlands and Luxembourg. Special Purpose Entities (SPEs) may be used to avoid corporate taxes.

 Table 4: Sources of Portfolio Investment
Portfolio Investment Assets
Top Five Partners (Millions, current US Dollars)
Total Equity Securities Total Debt Securities
All Countries 358,953 100% All Countries 147,308 100% All Countries 211,644 100%
Luxembourg 61,627 17% Luxembourg 52,919 36% Germany 25,594 12%
Germany 53,733 15% Germany 28,139 19% France 23,991 11%
United States 33,260 9% Ireland 16,270 11% United States 17,167 8%
France 30,787 9% United States 16,094 11% Netherlands 15,679 7%
Ireland 21,851 6% France 6,797 5% Spain 15,172 7%
Investment Climate Statements
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