AustriaThe ideal bridge between East and West

www.investinaustria.at

Central & Eastern Europe

2

CENTRAL & EASTERN EUROPE

The best place to go for business location issues

ABA – Invest in Austria offers you comprehensive service, from funding and market opportunities to tax regulations. Experienced ABA experts provide you with unbureaucratic support, putting their know-how at your disposal – at no charge at all.

Are you considering setting up business operations in Austria or intensifying your research activities? ABA – Invest in Austria assists you with a complete range of cost-free services, including competent consulting in selecting an optimal site, support in dealing with public authorities and funding bodies, on tax and labor issues or in identi-fying contact partners. In addition, ABA supports you with its broad-based network of experts and cooperation partners.

More information at: investinaustria.at

37years in

operation

30employees

Consulting in

12languages4,177

new business location projects

60,598new jobs

3,000inquiries

p. a.

9.9billion €

in investments

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INVEST IN AUSTRIA

Why you should locate in Austria

Six reasons why you will find an optimal business environment here:

Tax advantages Group taxation, double taxation treaties and a

corporate income tax rate of 25 percent

East-West business interface

Central geographical location, direct access to Central and

South East European markets and the EU

Excellent infrastructure

Flight and freight traffic hub

Internationality and cosmopolitanism

High percentage of the popu-lation with a migration back-

ground, multilingual, well-trained employees

StabilitySafety, political and social stability, and quality of life

for companies and employees

Strong, dynamic market

Third most prosperous country in the EU, strongly

growing capital city

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CENTRAL & EASTERN EUROPE

Logical site“Vienna is the logical location for CEE headquarters, above all when it comes to serving the smaller markets in Central and Eastern Europe. Alantra decided in favor of Vienna due to its central location and outstanding infrastructure, amongst other reasons, also with respect to flight connections. This is also a relevant factor for employees coming from the region. One finds highly qualified employees in Austria who speak Eastern European languages, are globally oriented and want to work in an international environment. Last but not least, Austria stands out thanks to its unmatched quality of life – known for its culture, clean environment, beautiful mountains and lakes – but also due to its international schools and its being home to international organizations such as the United Nations.”

Klaus Vukovich, Managing Partner of Alantra Austria & CEE

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INVEST IN AUSTRIA

You are right in the middle of the continent

East-West business interface

“You lie in the middle of the continent, like a strong heart.” Over the last decades, Austria has successfully fulfilled its role as a hub in Central Europe in accordance with this verse from the Austrian national anthem. More than 1,000 international companies coordinate their activities in South East and Eastern Europe from Austria, including multinationals such as BMW, Borealis, Samsung and Sandoz, the Australian hearing aid specialist Cochlear, the Chinese telecommunications service provider ZTE, the Jap-anese mechanical engineering company Nittoku Engineering and the financial services provider TeleTrade from Cyprus. According to the Vienna University of Economics and Business, more than twice as many companies set up their headquarters in Austria between 2000 and 2017 than relocated elsewhere. For example, the German cookie manufacturer Griesson-DeBeukelaer has been coordinating its business operations in 18 Central and Eastern European countries from Vienna since 2016. The globally operating investment bank Alantra selected Vienna as its new location in 2017 to serve customers carrying out transactions in the CEE region. ICBC, China’s largest bank, opened a subsidiary in Vienna in 2018, which will serve as its CEE headquarters.

Eastern European companies discover Austria

New companies set up 2003–2018

Source: Compass Verlag, 2018

New companies set up

until 2003

546

3,497

New companies set up

until 2018

Hungary

Poland

Romania

Bulgaria

Russia

SloveniaSlovakia

Ukraine

Czech Republic

396

1,235

601 445

347

182

181151140

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CENTRAL & EASTERN EUROPE

Closely linked

Austria as both an investor and investment location

Austria is closely interconnected with the markets and countries of Central and East-ern Europe in numerous ways. CEE remains one of the most important target areas for Austrian direct investments. Notwithstanding the global economic and financial crisis in 2008, Austrian investors are deeply rooted in the region. According to the Austrian National Bank, EUR 55.5 billion or close to one-third of total Austrian direct investments abroad were in Central and Eastern European countries at the end of 2016.

Conversely, more than 5,000 companies from South East and Eastern Europe such as Lukoil and VTB Bank already have a foothold in Austria, 3,500 of which set up business operations in the country between 2003 and 2018. Austria is a central geographical and economic hub for Eastern European companies. Every second Rus-sian company establishing a subsidiary abroad selects Austria as a safe haven for its headquarters. About one-third purposefully leverage the Alpine Republic as a spring-board to the European Union. In 2010, every fifth company locating in Austria with the support of ABA – Invest in Austria was from the CEE/SEE countries. In 2018, close to one-quarter of all business location projects involved companies from South East and Eastern Europe.

Austria continues to be the third most important investor in CEE/SEE, surpassed only by the Netherlands and Germany, and is the second biggest investor in the Western Balkans.

Austria: Investment champion in Central and Eastern Europe

Austrian Direct Investment Stock 2018

Source: wiiw 2019

SloveniaCroatia

Bosnia-Herz.Serbia

SlovakiaRomania

Northern MacedoniaHungary

Czech Rep.BulgariaAlbaniaKosovoPoland

Ukraine

Rank as investor

Austria’s share in percent

11122323427476

25.619.619.6

13.913.112.6

11.310.810.3

9.46.9

6.24.34

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INVEST IN AUSTRIA

Beneficial environment for biotech“We selected Austria as the headquarters for our research and development activities because Austria has created a particularly successful environment for life science and biotech companies. This environment actively supports companies not only financially but also professionally. This is very important as biotech companies have a long life cycle for product development and product marketing. This long path can be shortened in various ways, but there is hardly any other country in Europe where everything is in one place: financial and professional support through R&D funding, professional support from specialized business agencies and professionals, a large internal and international network, very good cooperation opportunities with universities and innovative financial and capital solutions for medium-sized companies to participate in the stock market. In addition, if we need professional services (scientific, consulting, legal, auditing or accounting), we can always expect the highest level of performance.“

Simon Zsolt, Director of Finance and Operations, OrthoSera GmbH

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CENTRAL & EASTERN EUROPE

Top talents

International employees with CEE know-how

All CEE headquarters find suitable employees in Austria, whether it involves a phar-maceutical company, large bank or high-tech startup. Application-oriented education has a long tradition here, whether at the numerous higher technical colleges, schools featuring practical training, the 22 public and twelve private universities or the 21 universities of applied sciences offering more than 640 study programs.

Junior executives “Made in Austria”

Whoever wants to do business in Eastern Europe will find more qualified, specialized employees with Eastern European language capabilities than in other Western Euro-pean countries. About 20 percent of the Austrian population have a migration back-ground, and three-quarters of all immigrants in Austria come from Central and Eastern Europe. These immigrants boast above-average qualifications and speak an average of three languages. Austria’s universities and educational institutions have developed customized Eastern Europe educational programs, frequently in cooperation with the business community. They are designed to educate and provide practical training to managers and skilled employees from East and West. The Vienna University of Eco-nomics and Business and the Competence Center for Emerging Markets & Central and Eastern Europe launched one of many qualification initiatives in 2007. In coopera-tion with companies such as Henkel, Erste Bank and Boehringer Ingelehim, students from the university and from Central and Eastern Europe are prepared for their future leadership positions in one-year programs such as “Master Class CEE”. The focus is on conveying management skills, especially with respect to the management and control of multinational companies in Central and Eastern Europe.

Stability and security“In a Europe marked by increasing uncertainty in numerous countries, international companies value Austria as the location for their European headquarters. The country offers a perfect mix of stability, legal certainty, quality of life and tax attractiveness.”

Herbert Kovar, Partner at Deloitte Austria

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INVEST IN AUSTRIA

More than 90 years of historyA history going back more than 90 years links the consumer goods producer Henkel with the Vienna business location. The production facility in the heart of the city is the largest liquid detergent plant in the Henkel Group. Its export ratio is 85 percent. Moreover, Henkel has been operating a central warehouse in Vienna for detergents and cleaners for Austria, Czech Republic, Slovakia, Slovenia, Hungary and Croatia since 2005. The company already began to gradually build up its business in the Eastern European region in 1987. Today Henkel CEE is responsible for 32 countries.

“In particular, the quality and expertise of our employees and the proximity to Eastern Europe are major business location advantages for us.”

Birgit Rechberger-Krammer, President of Henkel CEE

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CENTRAL & EASTERN EUROPE

Partners for your CEE expansion

CEE banks and service networks facilitate market entry

Excellent CEE know-how on the part of Austrian service providers such as banks and law firms, a historically matured cultural understanding on the part of Austrians for Eastern Europe along with political stability, security and transparent laws make Austria the preferred hub between West and East. Austria’s large banks, i.e. Erste Bank, Raiffeisen Bank International and Bank Austria, are leaders in Eastern Europe, operating a dense branch office network. Conversely, more Eastern European banks such as VTB Bank and Sberbank have established a foothold in the business location of Austria.

Competence and contacts

Austrian banks operate some 8,600 branch offices in 15 South East and Eastern Euro-pean countries and employ up to 80 percent of their total staff in the region. Tax and management consultants, lawyers and advertising agencies are competent partners for regional headquarters. Austrian banks and service providers considerably facilitate the market entry of their customers and clients in the growth regions of South East and Eastern Europe thanks to their contacts and specific know-how.

Entry into new markets“As part of Russia’s largest bank, Sberbank Europe supports companies from Cen-tral and Eastern Europe in expanding to Russia and the CIS countries thanks to its extensive network. Conversely, Sberbank also assists Russian companies in opening up new markets in our region. We build bridges to business opportunities in the East through our know-how and our experience.”

Sonja Sarközi, CEO Sberbank Europe

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INVEST IN AUSTRIA

Tax advantages

A globally operating company benefits from decisive competitive advantages offered by Austria in maximizing profits. Limited liability companies are only subject to a 25 percent corporate income tax, but not to wealth or trade tax at all.

The advantages of Austria as a holding location

• More than 90 double taxation agreements • Corporate income tax rate of 25 percent• Tax-free pooling of profits from foreign subsidiaries in the Austrian holding

company• Tax-free profits from the disposal of foreign subsidiaries • Group taxation: offsetting of losses of foreign subsidiaries against the domestic

profits of the holding • Deductions on interest expenses on borrowed capital used to acquire third-party

equity interests• Recognition of income-reducing provisions on the tax balance sheet • Usually tax-free dividends and capital gains from foreign subsidiaries • eGovernment: electronic legal transactions on tax matters including appeal

proceedings (“FinanzOnline”)• Quick reimbursement of value added tax (VAT) credit balances

“What began with the eastward expansion as a one-way street has now become a lively exchange in both directions: More and more companies from CEE are choosing Austria as a hub for their expansion into (Western) Europe. CMS is strongly rooted locally in all markets in CEE and also in Austria, but internationally oriented. Through seamless cross-border cooperation, we enable our clients to smoothly enter the Austrian market and beyond.“

Gregor Famira, Partner and CEE Coordinator CMS Austria

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CENTRAL & EASTERN EUROPE

Safe haven for global business

High legal security and stability

CEE headquarters require reliable and stable conditions in order to be able to carry out their management and coordination activities for their region from a safe haven. Austria not only offers a high level of legal certainty and political stability, but also protection of property and personal security.

Digital administrative procedures. Austria’s public administration, which actively supports companies in handling administrative work, functions in a modern, trans-parent and reliable manner. Austria is a frontrunner in Europe when it comes to open government data and mobile applications and ranks among the top five in the eGovernment Benchmark 2018 of the EU Commission. More than 90 percent of all companies already take advantage of such services.

High productivity, virtually no strikes. According to the EU Commission, Austria ranks fourth in the EU-28 with respect to labor productivity per employee in manufac-turing industry, outperforming industrial nations such as Germany, France and Great Britain. High productivity goes hand in hand with low unit labor costs and near-zero strike rates.

IrelandLuxembourg

BelgiumAustria

FranceSweden

DenmarkNetherlands

FinlandEurozone (19)

GermanyItaly

SpainEU (28)

United Kingdom

197.0155.7

128.0116.4114.8111.5111.3110.6108.1106.3105.2104.9

100.1100.098.9

Labor productivity 2019 in EU comparisonEU (28) = 100

Source: EU Commission, preliminary data Source: WSI Hans Böckler Foundation 2019

Strike duration in international comparisonDays lost to strike per 1,000 employees, average 2008 – 2017

1245

1216

213437

5557

88116118

SwitzerlandAustria

PolandUSA

NetherlandsGermany

UKIrelandFinlandNorway

SpainBelgium

DenmarkFrance

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INVEST IN AUSTRIA

Built from ViennaColas is the global market leader in the construction and maintenance of transport infrastructure. The Group is represented in 50 countries around the world, and actively operates in business areas related to roads and other types of transportation infrastructure (air, rail, waterway, including PPP models), urban development and recreational facilities including structural and civil engineering as well as building projects. Colas set up its CEE headquarters in Vienna.

“Colas made the choice to set up its head office in Vienna five years ago for its Euro-pean area division. From this location we manage all the European activities (except France), from Switzerland to Romania, and from Denmark to Croatia with our inter-national team. This central position is clearly the main asset, putting all the capitals at less than max two hours by plane. Many of our subsidiaries can also be visited by car or train, even. In addition, the Vienna spot gathers many of the international institu-tions, many other actors involved in our business, as well as international finance partners. Eventually, the attractiveness of the city is definitively a plus, for both our collaborators and the image of the company.”

Thierry Le Roch,Deputy Managing Director of the Colas-Group, responsible for Europe

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CENTRAL & EASTERN EUROPE

Simply livable

Magnificent nature and a rich cultural offering

Managers working across the globe confirm it again and again: Austria fulfills all the requirements of highly qualified individuals in terms of quality of life. Alpine land-scapes and gently rolling hills, national parks and crystal-clear lakes, good air quality and an intact environment combined with one of the most diverse cultural offerings make Austria a country which is pleasant to live in. According to the latest “Quality of Living Survey 2019” prepared by the Mercer Group, Vienna is the most livable city in the world for the tenth straight time.

International educational opportunities, extensive recreational offering. A wide-ranging school offering featuring mother-tongue instruction, from the Japa-nese School Association in Vienna to the Swedish School is available to children of expatriates. Close to 5,000 tennis courts, around 80 golf courses, 22,000 kilometers of ski slopes, 50,000 kilometers of hiking paths, 10,000 kilometers of biking paths and much more make Austria a rich leisure paradise.

Personal security. Quality of life also encompasses the highest possible level of personal security, based on a low crime rate. There is hardly any other country in the world which matches Austria with respect to security of persons and property. Even in the larger cities, it is natural for people to take public transportation late in the evening or take a stroll through the city after going to the theatre.

Source: Mercer Quality of Living Ranking 2019

Rank City

1 Vienna2 Zurich3 Vancouver3 Munich3 Auckland6 Dusseldorf7 Frankfurt8 Copenhagen9 Geneva10 Basel

Best capital cityRanking according to quality of life

Unmatched quality of life10 = Quality of life is very high

Source: World Competitiveness Yearbook 2018

SwitzerlandAustria Finland

NetherlandsGermany

FranceUSA

JapanCzech Rep.

ItalyUK

PolandHungary

12356

2123242728294154

9.699.639.549.50

9.258.127.877.70

7.457.417.38

5.794.62

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INVEST IN AUSTRIA

Engine for risk managementThe globally leading industrial insurance broker and risk consultancy Marsh provides consulting services on all issues relating to risk and insurance management to companies in more than 100 countries. Marsh is a fully-owned subsidiary of Marsh & McLennan Companies with a staff of more than 60,000 employees worldwide. Marsh has already been operating in the CEE region for about 25 years. It takes advantage of Austria’s “economic engine” to coordinate its business activities in twelve Central and Eastern European markets. Many of Marsh’s important business partners also have their CEE headquarters in Vienna.

“Austria not only offers the best connections to the CEE region due to its central loca-tion in the heart of Europe, but never loses sight of its Western-oriented perspective. When operating out of Austria, it is easier to follow developments in Western econo-mies, make the necessary adaptations and then transfer them to the region. Another point to be made is the large number of highly qualified employees in Austria with Eastern European know-how or multilingual abilities.”

Lukas Herrmanns, CEO Central & South Eastern Europe for Marsh

Imprint: Media owner and publisher: ABA – Invest in Austria Austrian Business Agency, Opernring 3, A-1010 ViennaResponsible for contents: René SieglConcept, editorial work: Karin Schwind-Derdak (ABA), Northern Lights CommunicationsPhotos: iStock, Alantra, OrthoSera, Deloitte, Henkel, Sberbank, CMS, Colas, Marsh Design: november-design.at. Status: August 2019

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