Questions about starting a business? Find the answers here!
Do you have an entrepreneurial mindset – yes or no?
Before starting a business, you should be able to answer ‘yes’ to two essential questions without hesitating:
- Do I really want to become an entrepreneur?
- Do I have the essential skills for this?
Some personal traits are decisive for success. These include believing in your idea, a desire for independence, the willingness to take risks, as well as motivation and perseverance. Professional qualifications and basic commercial knowledge are equally relevant. But you don’t need to have every entrepreneurial skill under your belt – many things can be learned or outsourced (e.g. accounting). It is also important to have the support of your family. This Entrepreneurial Test will help you decide whether being self-employed is the right choice for you.
Alone or with someone else?
This is probably one of the most important decisions you have to make. The answer will also depend on the business idea and the underlying conditions for the business start-up. In any case, it is important that you make this decision objectively and not on a purely emotional basis.
The most significant advantages of setting up a business with other people are:
- easier to raise capital
- the risk is shared
- different experience, knowledge and skills brought to the business
- better division of work and time saving, resulting in more dynamic company growth
- broader network
Disadvantages of setting up a business with partners include:
- longer decision-making process
- collective liability for incorrect decisions
- a need to find compromises
Can I set up a company while in an employment relationship?
Yes, in principle it is possible to set up a company while in an employment relationship. Many entrepreneurs still receive income from a dependent activity, especially during the initial phase of their business. However, check whether you need your employer's consent or whether your existing employment contract excludes secondary employment.
If you receive income from self-employment or employment, social security obligations (multiple insurance policies) and tax return obligations (income tax) must also be taken into account.
What legal company forms are there?
The legal forms of company in Austria are:
- sole proprietorship
- partnerships, (e.g. general partnership, limited partnership, dormant partnership)
- corporations (e.g. limited liability company, stock corporation)
Major differences can sometimes be found between the types of companies, especially in terms of the founding structure, the administrative and management structure, liability and scope of application. Differences in tax and social security law must also be taken into account. The appropriate choice of legal form therefore varies depending on the industry and the goal of the company.
Since there are costs involved in making a change to an existing legal form, it makes sense to carefully consider your options before founding the company. A list of the individual features of all legal forms can be found in the Foundation Guide.
What do I have to do to start a business?
Depending on the legal form (sole proprietorship, limited partnership, general partnership, limited liability company) and the type of business (free trade or regulated trade), there are different steps that have to be completed in order to set up the business. In all cases, a business licence must be obtained in order to carry out commercial activities. You must also register with the social security office and your local tax office. Details on the different steps to be taken in setting up a business can be found in the Foundation Guide or on investinaustria.at.
Do I need a business licence?
A business licence is required for each commercial activity (trading licence). Generally speaking, you are working on a professional basis if you carry out an activity independently (on your own behalf and at your own risk), on a regular basis (for a longer period of time) and with the intention of making a profit. The type of business licence you need depends on the activity you are carrying out. A basic distinction is made between free trades (no attestation of competence required) and regulated trades (attestation of competence required). In any case, before you begin to carry out any commercial activity, you must obtain a business licence from the Austrian Federal Economic Chamber (WKO). This regulates your rights and obligations as a business person and leads to membership of the WKO. Self-employed professions that are regulated by other laws (e.g. doctors, pharmacists, farmers, etc.) as well as “new self-employed persons” are excluded from the scope of application of the business licence.
What are new self-employed persons?
New self-employed persons are those people who, on the basis of a business activity, earn income from self-employment for tax purposes. However, a business licence is not required to carry out the activity. New self-employed persons are therefore not members of the WKO.
The legal status of new self-employed persons is regulated exclusively by social security legislation. People included under the compulsory insurance are those who, on the basis of gainful employment, are not already covered by other provisions under the scope of social security law (e.g. employees, freelancers or tradespeople).
Compulsory insurance for new self-employed persons includes pension, health and accident insurance, as well as provision schemes for the self-employed.
How much does it cost to set up a business?
The cost of setting up the business will depend on the legal form you choose. If you decide on sole proprietorship, fees are only incurred if the company is entered in the commercial register. For a corporation, the Articles of Association are usually drawn up by a lawyer or notary public and in addition, there is the cost of registering in the commercial register. Business registration is free of charge.
In accordance with the Austrian New Business Support Act (NeuFöG), the fees for registering a business in the commercial register are waived for new businesses and business acquisitions. For this purpose, you will need a confirmation from the Chamber of Commerce (Start-up Service, District Office or specialist group) that you have attended a consultation (Declaration of New Establishment/Transfer of Business – NeuFöG form).
What advantages does a business plan offer?
Most external investors insist on seeing a business plan, so ensuring that your business venture is well planned is essential for securing finance. The business plan should contain your vision and assumptions, as well as specific market assessments and forecasts. A business plan is not only usefully externally, but also within the business: by following the items that you have set out, you can check the feasibility, economic efficiency and customer benefits of the company.
You can find useful templates and tools for creating a business plan on Plan4You and on i2b. You can also submit your fully developed business plan to contests.
Why set up your business in Vienna?
Vienna uniquely combines the benefits of being a top business location with tradition, culture and quality of life. A whole range of factors contribute to the global rankings for top positions. The strengths of the Viennese economy lie in life sciences, urban technologies, creative industries and ICT.
The location also offers perfect conditions for start-ups – every year, around 9,000 new companies are founded in Vienna. National and international companies can receive support in relocating or setting up new businesses in the form of monetary incentives, real estate and free-of-charge personal advice.