How to Register a Business in the US from Austria

Step 1: Benefits of starting your US business from Austria

Starting a US business from Austria presents a unique set of benefits that can be incredibly advantageous for entrepreneurs. One significant benefit is the access to the vast and diverse American market. With a population of over 330 million people, the United States offers endless opportunities for products and services of all kinds. Austrian businesses can tap into this substantial consumer base, potentially increasing revenue streams and broadening their customer reach. Additionally, the US is home to numerous business hubs, such as Silicon Valley for tech startups and New York City for finance, providing an environment ripe with resources and networking opportunities.

Another crucial advantage is the favorable business climate in the US, which includes a relatively low corporate tax rate and various incentives for foreign investors. These favorable conditions can significantly reduce operational costs and boost profitability for Austrian entrepreneurs. Furthermore, establishing a US presence allows Austrian companies to benefit from the robust legal and financial systems in place, ensuring their investments are secure and compliant with international standards. By starting a business in the United States, entrepreneurs from Austria can leverage these benefits to accelerate growth and achieve greater success in their ventures.

Step 2: How to start your US business from Austria

Starting a US business from Austria involves several key steps and considerations. Firstly, it's essential to choose the right business structure, such as a Limited Liability Company (LLC), Corporation, or Partnership, depending on your business goals and needs. LLCs are generally simpler and offer flexibility in management and tax benefits, making them a popular choice for international entrepreneurs.

Once you have decided on a business structure, the next step is to register your business with the relevant US state authorities. This process usually involves selecting a unique business name, filing Articles of Incorporation or Organization, and paying the requisite fees. You'll also need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for tax purposes. Additionally, setting up a US bank account and understanding the taxation requirements, including state-specific taxes, are crucial for operating smoothly. Consulting with legal and financial experts in both the US and Austria can also provide valuable insights and ensure compliance with all regulatory requirements.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Austria

Understanding Compliance Requirements for Running a US Business in Austria

Expanding a US business into Austria can be a strategic move, leveraging Austria’s strong economy and central location in Europe. However, understanding and adhering to local compliance requirements is crucial. This article outlines key considerations to help US businesses navigate the regulatory landscape in Austria.

1. Legal Entity Formation

Before starting operations, you need to choose the appropriate legal entity. The common options include:

• GmbH (Gesellschaft mit beschränkter Haftung) - Equivalent to a limited liability company, ideal for small to medium-sized businesses.
• AG (Aktiengesellschaft) - Similar to a corporation, suitable for larger businesses with higher capital requirements.
• Branch Office - Allows you to operate as an extension of your US-based company.

2. Registration and Permits

Businesses must be registered with the Austrian Commercial Register (Firmenbuch). Depending on the type of business, additional permits and licenses may be required. For instance:

• Trade licenses (Gewerbeberechtigung) for specific industries
• Special permits for sectors such as banking and healthcare

3. Taxation

Understanding the Austrian tax framework is vital. Key taxes to consider include:

• Corporate Income Tax - Currently at a rate of 25%.
• Value Added Tax (VAT) - Standard rate of 20%, with reduced rates for certain goods and services.
• Withholding Tax - Applied to certain payments such as dividends and royalties.
• Double Taxation Treaty - Austria has a treaty with the US to avoid double taxation. It's advisable to consult with tax experts to optimize tax liabilities.

4. Employment Regulations

Compliance with local labor laws is essential. Key aspects include:

• Employment Contracts - Must adhere to Austrian labor laws, including minimum wage, working hours, and termination conditions.
• Social Security Contributions - Both employers and employees contribute to the social security system.
• Work Permits and Visas - Non-EU employees need appropriate visas and work permits.

5. Data Protection

Austrian businesses must comply with the General Data Protection Regulation (GDPR). This includes:

• Ensuring data privacy and protection for customers and employees
• Implementing data processing agreements
• Conducting regular data protection impact assessments

6. Financial Reporting

Businesses are required to maintain accurate financial records and submit annual financial statements. Compliance with Austrian Accounting Standards or International Financial Reporting Standards (IFRS) is mandatory for certain companies. Regular audits might be necessary depending on the size and type of business.

In conclusion, successfully running a US business in Austria requires thorough understanding and diligent adherence to local compliance requirements. Consulting with local legal and tax experts can help ensure that your business operates smoothly within the Austrian regulatory framework.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Austria

Understanding Tax Obligations for Running a US Business in Austria

When operating a US-based business in Austria, it's crucial to understand the nuanced tax obligations to ensure compliance and optimize financial management. Here are several key considerations to keep in mind:

1. Understanding Double Taxation Treaties

Austria and the United States have a double taxation treaty to prevent the same income from being taxed in both countries. This treaty provides guidelines on which country has taxing rights over various kinds of income, thereby avoiding double taxation. Business owners should consult the treaty to understand their tax liabilities and take advantage of any relief provided.

2. Corporate Taxation

US businesses operating in Austria are liable for Austrian corporate tax on profits earned within the country. Austria applies a corporate tax rate of 25%. Understanding how to properly allocate and attribute profits to the Austrian operations will be critical for accurate tax reporting.

3. VAT (Value-Added Tax)

Most goods and services in Austria are subject to VAT, which currently stands at 20%. US businesses selling goods or services in Austria must register for VAT and submit regular VAT returns. It is important to manage VAT collection and remittance efficiently to avoid any discrepancies.

4. Payroll Taxes and Social Security Contributions

If the US business employs staff in Austria, it must adhere to Austrian payroll taxes and social security contribution requirements. Austria has a progressive income tax system and employees are also required to contribute to social insurance schemes, which cover health insurance, pension funds, and unemployment insurance.

5. Filing Requirements and Deadlines

Compliance with Austrian tax laws involves timely filing of various tax returns and declarations. Corporate income tax returns must generally be filed by June 30 of the following year if the fiscal year aligns with the calendar year. VAT returns are usually filed monthly or quarterly. Late submission can result in penalties and interest charges.

6. Transfer Pricing Regulations

Austria has stringent transfer pricing regulations to prevent profit shifting and ensure that intragroup transactions are conducted at arm's length. US businesses with related entities in Austria must maintain thorough documentation and justify their pricing policies to tax authorities.

7. Seek Professional Advice

Given the complexity of international taxation, it is advisable to seek consultation from tax professionals who specialize in US-Austrian tax matters. They can provide guidance tailored to your unique business situation and help navigate the regulatory landscape effectively.

By understanding and adhering to these considerations, US businesses can successfully manage their tax obligations in Austria, ensuring legal compliance and financial efficiency.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country