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The business location Austria is highly profitable for international investors. The success factors: stability, CEE know-how, …

The business location Austria is highly profitable for international investors. The success factors: stability, CEE know-how,
and a prosperous market in the heart of Europe.

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  • 1. Business Location Austria Austria Bringing a Fresh Wind to INVEST IN AUSTRIA
  • 2. BUSINESS LOCATION AUSTRIA 3h All of Europe by Air in 3 hours Helsinki Oslo Stockholm Tallinn 2h Riga Moscow Dublin Copenhagen Vilnius Minsk Amsterdam London Berlin Warsaw Brussels 1h Prague Kiev Paris Luxembourg Bratislava Vienna Berne Kishinev Budapest Ljubljana Zagreb Belgrade BucharestLisbon Madrid Sarajevo Pristina Podgorica Sofia Rome Skopje Tirana Ankara Athens Austria’s central location in Europe makes the country the business interface hub for East-West business relations 2
  • 3. Invest in AustriaDynamicBusiness LocationThe Austrian business location stands out in internationalcomparison. Companies profit from good business environment,qualified employees and a modern infrastructure.Austria ranks among the most prosperous and innovative countries in the EuropeanUnion, and has more effectively coped with the economically turbulent period prevail-ing since 2008 than most other European nations. The business location scores pointsthanks to its modern infrastructure, top-notch technologies, well-educated and highly-motivated employees, and also offers a high reliability of energy supplies in addition topolitical, social and economic stability. Moreover, Austria is the ideal base for ensuringmarket access to the dynamic markets of South East and Eastern Europe.For the twelfth straight year, growth of the Austrian economy will exceed the compa-rable average in the eurozone. Due to the good conditions, Austria also outperformsthe global average with respect to foreign investment in the country. For example,investors benefit from broad-based research promotion programs, a business-friendlytax system and high productivity. Despite this good positioning, we are continuallyworking on creating an even more favorable business environment for companies.In this spirit we would like to welcome you to Austria.Reinhold MitterlehnerFederal Minister of Economy,Family and YouthContents5 Austria – A Profitable Location 14 East-West Interface6 A Secure Location for Your Investments 17 Positive Economic Climate and Quality of Life7 Austria is a World-Leading Business Location 18 Austria – A Country of Specialists9 People as a Success Factor 20 Lower Taxes, Higher Profits10 Ideal Conditions for R&D 22 Productivity as a Trademark12 New Medicine from Vienna 25 Value Creation with Recreational ValueEditorial: December 2012; Owner&Publisher: Austrian Business Agency, Opernring 3, A-1010 Vienna; Editor-in Chief: René Siegl; Associate Editor: MariaHirzinger, Karin Schwind-Derdak; Design:; Photos: APA, BuenosDias, Julius Silver, Otto Bock, Phoenix Tree HSC; Print: Gugler 3
  • 4. BUSINESS LOCATION AUSTRIA A profitable location: International investors take it for granted that the business location of Austria will enable them to exploit top-notch know-how and quality, high performance technologies, a state-of-the-art infrastructure and EU membership with close proximity to Eastern and South Eastern Europe. They decide for surefire success, and thus choose Austria.4
  • 5. Invest in AustriaAustria –A Profitable LocationThe success factors: stability, CEE know-how,and a prosperous market in the heart of EuropeThe German semiconductor company Infineon produced a surprise in 2012by investing EUR 250 million in its Austrian subsidiary. The investments weredesigned for the production plant in Villach and the research facility in Graz. “Inthis way one can quickly and flexibly react to the wishes voiced by customers”,said Infineon Austria CEO Monika Kircher. Not only Infineon but other prominentfirms invested in Austria during the crisis year 2012. General Motors upgradedits Austrian subsidiary at a cost of EUR 100 million, joined by Lam Research,Mondi, Siemens and Takeda Pharmaceutical, which also expanded their Austrianoperations. What makes the small country of Austria located in the heart ofEurope so attractive as a business location?All advantages at a glance. One thing is certain: for a profitable companymany of the basic conditions must be suitable for business on a long-term basis.Investors can exploit a comprehensive package of competitive advantages:• Outstanding level of energy security and reliability and low industrial electricity prices• Political and social stability as well as a low crime rate• Hardly any strikes thanks to the excellent relationships between employers and employees• Third most prosperous country in the EU – an attractive market with above-average purchasing power on the part of consumers• Highly developed infrastructure with the best-performing airport with respect to flight connections to the Central and Eastern European region• Ideal basis for business in South East and Eastern Europe with more than 1,000 CEE coordination headquarters of foreign companies• Tax advantages based on a low corporate tax rate, a Group taxation scheme and attractive research promotion incentives• Efficient location with high labor productivity and low unit labor costs• Highly-qualified employees with practice-oriented vocational training 5
  • 6. BUSINESS LOCATION AUSTRIA Secure Location for Your Investments Stability, predictability and security of the energy supply are outstanding features of Austria as a business location. No machines stand still. Companies operating internationally can rely on Austria’s extremely high level of political stability. Austria is ranked 7th among 59 industrial countries by the World Competitive Yearbook. In the economic risk ranking compiled by the renowned magazine “Euromoney”, Austria is also in the top ranks, placing 11th among 100 nations. Austria’s economic and social partnership between man- agement and labor representatives is not only the basis for one of the lowest strike rates anywhere, with only 0.8 strike days annually per 1,000 employees, but also ensures a low unemployment rate and a policy of wage restraint. In Austria businesspeople are on safe ground. Climate change and natural catastrophes increasingly influence business location decisions. Austria ranks third in Europe concerning the security of energy supplies. Electricity is available more than 99 percent of the time. Austria is relatively free from natural catastrophes. Accord- ingly, it is not even listed in the risk evaluations of prominent international insurance companies. High level of personal security. The high level of legal certainty is not the only fac- tor which is particularly attractive to companies. Austria is one of the safest countries in the world with a low crime rate. Even in big cities, it goes without saying that people can safely use public transportation late at night or take a stroll around town after attending a theater performance. Annual unplanned non-availability of the Social peace electricity supply in minutes Working days lost per 1,000 employees 2010 Annual average 1999 - 2008 Germany 14.90 Austria 0.8 Denmark 16.95 Switzerland 3.0 Austria 31.77 Germany 4.3 Netherlands 33.70 Poland 4.9 Italy 47.77 Netherlands 9.0 Slovenia 51.00 Hungary 17.7 France 62.90 USA 21.9 UK 70.02 United Kingdom 25.3 Sweden 78.90 Finland 58.3 Hungary 102.38 Japan 73.6 Czech Rep. 106.24 Italy 75.3 Portugal 172.98 Denmark 100.1 Poland 316.10 France *) 103.4 Slovakia 465.40 Spain 127.6 Source: CEFR Benchmarking Report, April 2012 Source: Eurostat, IW-Köln, ILO 2011, *) 1999 - 20076
  • 7. Invest in AustriaAustria is a World-LeadingBusiness LocationConflicts among different interests are fought outat the bargaining table, not on the streetsDuring such turbulent times as we have now, it has become even moreimportant that business-friendly policies are being implemented. What doyou consider to be the advantages of Austria in international comparison?A pro-business climate, reliable conditions and legal certainty are key factorsunderlying the attractiveness of Austria as a business location. Moreover, the Christoph Leitlsocial partnership strengthens the position of the business community. This is a President of the Austrian Federalpriceless competitive advantage. In addition, our dual education system makes a Chamber of Commercemajor contribution to ensuring that Austria continues to have one of the highestemployment rates for young people in all of Europe. In the current tension eco-nomic situation, it is particular important to safeguard and continually enhancethe competitiveness and attractiveness of the Austrian business location.The availability of qualified skilled employees is absolutely essential. We haveachieved a milestone on the basis of transparent immigration criteria thanks tothe Red-White-Red Card.In what ways does the Austrian economy stand out?996 out of 1,000 Austrian companies are SMEs. Even if the industrial sector’sshare is very high, the Austrian economy is increasingly oriented to the servicesector. This can be demonstrated by the growing volume of service exports.Little Austria is ranked sixth in the world in per capita service exports. Everyeuro of service exported is accompanied by six euros of merchandise exports.When I talk about services, I have long stopped referring only to tourism, butalso promising future-oriented fields such as power engineering and environ-mental technology. Austrian companies rank among the global leaders in thesesectors. To sum up, one can say that Austria is naturally tops in high-technologyand medium-tech industries. However, with our well trained employees, we alsocontinue to be an outstanding production location.→ 7
  • 8. BUSINESS LOCATION AUSTRIA Innovative small and medium-sized enterprises Prosperity in the EU Corporate structure in Austria GDP per capita 2011 in purchasing power standards (PPS), EU-27 = 100 Employees % of companies Luxembourg 271 0-9 92.3 Netherlands 231 10 - 49 6.2 Austria 129 50 - 249 1.2 Irleland 129 250 or more 0.3 Sweden 127 Denmark 125 Gemany 121 UK 109 France 108 Italy 100 EU-27 100 Czech Republic 80 Hungary 66 Poland 64 Bulgaria 46 Source: Austrian Federal Economic Chamber, 2012 Source: Eurostat 12/20128
  • 9. Invest in AustriaPeople as a Success FactorAustrian employees: top qualified and top motivatedExemplary education. There is a close connection between the educationalsystem and economic success of a country. That is why Austria focuses onproviding sound education and training at all levels.Dual education. Similar to Germany, Austria offers young people a dual edu-cation system, which combines practical vocational training with vocationalschooling. In cooperation with companies, the schools make sure that trainingmatches the requirements of the business community. In additional to voca-tional schools, higher technical schools provide courses of study in all fields. Theeducation provided usually corresponds to a Bachelor’s Degree. A full two-thirdsof all 14-18 year olds attend vocationally-oriented schools. Upon graduation,students can either start their professional careers or continue their educationand study at one of the 21 universities of applies sciences, 22 public universitiesor 13 private universities. The universities of applied sciences, which offer 372different courses of study, are particularly tailored to the specific needs of com-panies. More than 47 percent of the study programs offered by the universitiesof applied sciences enable people to continue their education alongside work.Low youth unemployment – motivated employees. The sound educationalsystem has a positive effect. Austria has the second lowest youth unemploy-ment rate within the EU, at 8.5 percent. It particularly important to note thestrong identification of Austrian employees with the companies. In this regardAustria is ranked third worldwide.Youth unemployment (15-24 years) Job-oriented training in the educational systemin percent Share of pupils in the upper secondary level in percent Germany 8.1 Austria 76.7 Austria 8.5 Czech Republic 73.1 Denmark 13.7 Belgium 73.0 Great Britain 20.6 Netherlands 67.0 EU-27 23.4 Switzerland 66.2 France 25.6 Italy 60.0 Ireland 29.9 Sweden 56.1 Italy 36.5 Germany 51.5 Spain 55.9 Poland 48.2 Greece 57.0 OECD 46.0 France 44.3 UK 32.1 Hungary 25.8 Japan 23.5Source: Eurostat 2012 Source: OECD, Education at a Glance, 2012 9
  • 10. BUSINESS LOCATION AUSTRIA Ideal Conditions for R&D Innovative ideas and customized solutions from Austria Phoenix Tree HSC Investment Group acquired Steyr Motors in 2012. What do you consider Austria’s strengths to be as a technology location? I primarily see Austria’s strengths in the close networks and cooperation of the scientific and business communities. Upper Austria in particular is internation- ally leading in the field of engine development. This applies to all areas and not only to product development. For example, top performance is also evident in the production of more technology-intensive engine components or electronic control. A decisive factor is that as a company one has access to an excellentJonathan Chu, development network in the region. This is the only way one can sustainablyExecutive Vice maintain the product at the cutting edge of technology. For instance, thesePresident Europe conditions do not exist in China. We also evaluated other locations such as Ger- many or Italy, but ultimately decided in favor of Upper Austria. Steyr has a very long tradition in engine development. This is also the basis for highly qualified employees, not only in development work but also in terms of specialized staff. The higher technical schools train top professionals. This educational system is unique in the world. Will you develop your business on the European market from Austria? Yes, Austria is a key hub for us. In particular, the geographical proximity and historical ties to Central and Eastern Europe and the related cultural understand- ing characterize Austria as a business location. This know-how pool is an ideal starting point to develop our business in the CEE markets. This would not be possible to such an optimal extent from Asia, especially as a comparable level of cultural know-how does not exist. Steyr Motors is the specialist for the development and production of high- performance diesel motors for a broad range of applications, from light utility vehicles, SUVs and hybrid trolley buses to motor boats and work boats. Phoenix Tree HSC Investment (Wuhan) acquired STEYR MOTORS in 2012. Phoenix Tree HSC Investment will upgrade the Steyr facility to make it the global develop- ment and production center. → www.steyr-motors.com10
  • 11. Invest in Austria“Global players such as the BMW Group invest in those locations where all the basic conditions are just right. This includes the quick and unbureaucratic handling of administrative procedures involving public authorities. In this regard we have had very good experience in Austria.” 11
  • 12. BUSINESS LOCATION AUSTRIA New Medicine from Vienna Ottobock develops high-tech prostheses in Austria World-class. The German company Otto Bock HealthCare Products has always been a cutting-edge trend-setter in the field of arm and hand prosthe- ses. The latest brilliant breakthrough is the “Michelangelo ® Hand”. This new type of prosthetic hand comes closer than ever before to precisely resembling the human hand. The Michelangelo® Hand will enable the user to enjoy an enhanced quality of life that would have been previously unimaginable. The artificial hand was developed in Vienna. In the field of prosthetic leg systems, Ottobock’s microprocessor-driven prosthetic C-Leg and Genium, the next generation of intelligent leg prostheses, also allows for more natural maneuver- ability and a higher quality of life. According to Hans Dietl, Managing Director of Ottobock Austria, new innovations expected in the future include implants in the field of high-tech prosthetic systems, as well as artificial intelligence designed to coordinate prosthetic systems. The Vienna workshop. Ottobock has operated a subsidiary in the Austrian capi- tal since 1969, employing a work force of over 500 employees, a third of whom are involved in research and development. The leading specialist in the field of prosthetics has developed important milestones thanks to the research con- ducted in Austria. “Vienna offers us the required proximity to research facilities and clinics now as it did in the past“, says Hans Dietl, explaining the decision in favor of Austria. At the end of the 1960s, the Vienna subsidiary was the first step in the internationalization process of this medical pioneer. Customized labor market policies. According to Hans Dietl, ensuring optimal conditions in the working environment as the pre-requisite for ongoing top-notch performance in the field of research is extremely dear to his heart. “My top priority has always been the implementation of labor policies tailored to today’s business world. In order to conduct research, it is very important for research companies to be able to recruit a sufficient number of specialists and employ them at terms and conditions which will not endanger the international competi- tiveness of the company”. These pre-requisites exist in Austria. Further expansion of the Viennese facility. The company is upgrading its facility in Vienna. Ottobock is investing a total of EUR 25 million to build a new building. On balance, the expansion project will create 200 new jobs. Otto Bock headquarters Corporate headquarters are in Duderstadt (Germany). Ottobock has sales and service companies in 44 countries around the world, employing more than 4,800 people globally. → www.ottobock.at12
  • 13. Invest in Austria“Vienna is the driving force for innovations in our company, and one of the growth drivers.” 13
  • 14. BUSINESS LOCATION AUSTRIA East-West Interface EU foothold for CEE companies, CEE headquarters for Western companies Austria is internationally considered to be the top business location for building up business ties to South East and Eastern Europe. As a headquarters location, Austria boasts a total of 309 headquarters, far ahead of the competitive CEE locations of Poland, Slovakia, Czech Republic and Hungary. A study carried out by the law firm Wolf Theiss concluded that only 84 international companies have set up their headquarters in all the four above-mentioned locations combined. On balance, about 1,000 international companies such as Siemens, Beiersdorf, Hewlett-Packard, Eli Lilly, Henkel and FedEx coordinate their CEE business operations from Austria. Approximately 40 international institutions with a focus on the CEE region are based in Austria. Location advantages. Outstanding Central and Eastern European know-how on the part of Austrian service providers such as banks and law firms, an historically matured cultural understanding of Austrians for the CEE region, political stabil- ity and security as well as transparent laws make Austria the ideal East-West business interface. This is complemented by a high share of employees with Eastern European language competence, based on the fact that 19 percent of the population, after all, has a migration background. Austria is the investment champion. Eastern Europe ranks among the most popular targets of foreign direct investment. Tiny Austria is the largest single foreign investor in Slovenia, Bosnia, Croatia and Serbia, and ranks second in Romania, Bulgaria and Slovakia. In 2011, 21 percent of all Austrian merchandise exports were destined for Central and Eastern Europe. The growth rate for exports comprised an impressive twelve percent in 2011.14
  • 15. Invest in AustriaHeadquarters in Austria HeadquatersHead office of the parent company, in percent of international companies 2011 Germany 34.0 Austria 309* USA 18.4 Poland 25 Switzerland 7.1 Hungary 24 France 4.2 Czech Rep. 23 Italy 3.9 Slovakia 12 Japan 3.6 Sweden 3.6 UK 3.2 Canada 2.9 Netherlands 2.9Source: List of Headquarters in Austria, September 2012 Source: Wolf Theiss Rechtsanwälte GmbH, 2011, *2012 15
  • 16. BUSINESS LOCATION AUSTRIA Boom in start-ups from Eastern Europe. Prominent companies from Central and Eastern Europe such as Lukoil, VTB Bank and Agrotec have long decided in favor of Austria as an EU location. Austria is a reliable partner for EU expansion, with the required know-how and competent service providers. The number of firms established by Eastern European companies in Austria increased four-fold in the period 2001 to 2011, rising from 66 to 364. Austria’s bonus points at a glance: • A high level of interconnectedness • Well-educated and loyal employees with Eastern European language skills • Transparent legislation • Excellent infrastructure • Competent consultants, tax advisors, lawyers and financial service providers • High quality of life • High level of legal certainty and personal security CEE junior executives “Made in Austria“. Three-quarters of all migrants in Austria come from Central and Eastern Europe. These immigrants have above- average qualifications, and the proportion of college graduates is also above average. Austrian universities and educational institutions offer tailor-made training programs, often developed in cooperation with the business commu- nity. An increasing number of Austrian educational institutions also offer training programs in Eastern Europe. The Red-White-Red Card for highly qualified employees. The Red-White-Red Card has been available to highly qualified individuals, specialists and university graduates from non-EU member states since July 2011. This enables companies to employ, for example, technicians, chemists or managers as well as univer- sity graduates from non-EU countries educated in Austria without requiring any further permits. Austria: Investment champion CEE companies discover Austria in Central and Eastern Europe Start-ups 2001-2011 2001 total: 66; 2011 total: 364 Total in Investment EUR Austria’s share in ranking million percent 2001 2011 Slovenia 1 10.8 47.9 Russia 11 59 Croatia 1 26.2 28.9 Ukraine 2 10 Bosnia-Herzegovina 1 4.9 19.7 Rest of CIS 2 10 Serbia 1 12.8 18.5 Bulgaria 1 17 Romania 2 52.6 17.8 Poland 6 10 Slovakia 2 37.6 16.0 Romania 7 21 Bulgaria 2 36.2 15.4 Slovakia 10 51 Czech Republic 3 96.2 12.9 Slovenia 5 17 Hungary 3 67.9 12.8 Czech Republic 9 34 Albania 3 2.6 13.7 Hungary 13 135 Source: WIIW Database on FDI 2012: Short-lived Recovery Source: Compass Verlag, 201216
  • 17. Invest in AustriaPositive Economic Climateand Quality of LifeCorporate tax rate and group taxation are particularlyattractive to international companies.Henkel Central Eastern Europe based in Vienna is responsible for coordi-nating business operations in 32 countries of Central and Eastern Europeand in parts of Asia and a work force of about 9,000 employees. Why didHenkel Group select Austria as its CEE headquarters?Henkel has had a production plant in Vienna for 85years and produces detergentsand cleaners at the Vienna-Erdberg plant. Since 2005 we have also been operat-ing a central warehouse in Vienna-Meidling for Austria, Czech Republic, Slovakia, Günter ThumserSlovenia and Croatia and most recently also for Hungary. Moreover, there is also a President, Henkel Centralfactory located in Ebensee, Upper Austria, which mainly manufactures joint mortar Eastern Europeproducts. In 1987, even before the fall of the Iron Curtain, Henkel also began tosuccessively build up its business in the Eastern European region. In this regard,we take advantage of the cultural proximity to Austria’s neighboring countries aswell as existing long-term contacts. Then as now, the central geographical loca-tion, the positive economic climate and the quality of life are the most importantassets of Vienna and Austria.At present, companies are quite cautious in making investments. DoesAustria have a special status within the Henkel Group?No, not at all. Every company, and Henkel is no exception, has to define its priori-ties. In Austria we have an investment program totaling 8 to 10 million eurosannually. Most recently, 30 million euros were invested, primarily for our centralwarehouse in Vienna-Meidling, which was expanded in 2012 to serve the Hun-garian market as well. Investment promotion initiatives as well as the attractivecorporate tax rate and the group taxation system are particularly business-friendlymeasures in Austria for international groups of companies.Henkel Central Eastern EuropeHenkel CEE headquartered in Vienna is one of the most important growth driversfor the German Henkel Group. Henkel CEE with its approximately 9,000 employ-ees is responsible for 32 countries in Central and Eastern Europe, and operatesmore than 30 production facilities in the region. The Viennese location is beingcontinually upgraded. Henkel produces more than 230,000 tons of detergents andcleansers annually here, of which 75 percent is designed for export.→ www. 17
  • 18. BUSINESS LOCATION AUSTRIA Austria – A Country of Specialists Innovative small and medium-size companies as global market leaders Austria as an industrialized nation. Tiny Austria has surprises in store for everyone, serving as the location for numerous niche players in all sectors such as ENGEL, Rosenbauer and Doppelmayer, which produce cutting edge products and are world market leaders. GREENone Tec has supplied the collectors for the world’s solar power plant at the Riad University for Women in Saudi Arabia. The Salzburg-based high-tech company Skidata equipped four out of the eight stadi- ums at the 2012 UEFA European Football Championship with its access technol- ogy. Firms such as Red Bull, Swarovski and Manner have gained international fame, conquering global markets from their base in Austria. The Austrian business location is attractive. Measured in terms of purchasing power, Austria ranks among the most prosperous countries in the world and is rated third in the EU. Foreign investments have been rising continuously since 1993 in spite of cyclically-related fluctuations. In the year 2011 foreign direct investments in Austria reached a level of EUR 11 billion, the second highest in the country’s history. On balance, the value of passive direct investments is close to 36 percent of GDP, higher than the global average of 29 percent. Industrialized Country Industrial Production by Sector Production sectors as percentage of GDP, 2010 in 2011 in percent in percent Austria 29.2 Mechanical engineering 22.6 Germany 27.8 Chemicals 9.7 Japan 27.3 Electronics 9.2 Switzerland 27.2 Gas supply 8.9 EU-27 24.7 Automotive 8.2 Netherlands 23.7 Mineral oil 7.7 Great Britain 21.8 Food and beverage 6.4 USA 21.3 Mining 5.4 France 18.8 Wood processing 5.2 Construction 3.8 Source: OECD, Eurostat Source: Austrian Federal Economic Chamber18
  • 19. Invest in AustriaWorld Market Leaders from AustriaCompany Industry InternetAlpina Race track protection alpina.atAndritz Plants for paper and special industries andritz.comAnton Paar Measuring technology and analytical devices anton-paar.comAT&S Mobile phone circuit board ats.netAVL List Drive systems and engine development avl.comBachmann electronic Controls systems for wind turbines bachmann.infoBinder+Co Glass sorting machines binder-co.atDoppelmayr Cable cars doppelmayr.comEngel Injection moldling machinery engel.atFrequentis Communication systems for air traffic control frequentis.comGREENone TEC Solar collectors greenonetec.comKapsch TrafficCom Fully electronic toll systems kapsch.netKomptech Waste treatment and biomass processing komptech.comLenzing Cellulose fibers lenzing.comnxp Sound Solutions Mobile phone loudspeakers nxp.comPALFINGER Truck knuckle boom cranes palfinger.comPlansee High-performance powdered metal materials plansee-group.comPlasser & Theurer Track tamping machines plassertheurer.atRed Bull Energy drinks redbull.atRHI Refractory materials rhi-ag.comRiedel Glas Quality glass riedel.comRosenbauer Special fire-fighting vehicles rosenbauer.comSchoeller-Bleckmann High precision components for sbo.atOilfield (Sbo) the oilfield serviceSchiebel Helicopter drones, mine detectors schiebel.netSwarovski Crystal glass jewelry swarovski.comSwarco Traffic telematics swarco.comvoestalpine Track switch technology, specialty stainless steel voestalpine.comWienerberger Bricks and brick wall systems wienerberger.atZumtobel Electronic lighting technology zumtobel.comSource: GEWINN, June 2012 19
  • 20. BUSINESS LOCATION AUSTRIA Lower Taxes, Higher profits Tax incentives for research and education create a business-friendly tax system in Austria Since the corporate tax rate was reduced to 25 percent, Austria has been cata- pulted into the top ranks of the world’s most business-friendly nations. Among the EU-15, only Ireland offers more favorable tax provisions. But Austria also makes a strong showing in comparison with the new EU member states that are enticing investors with major tax reductions. Lower effective tax burden. A comparison of the effective tax burden com- piled by BAKBASEL and the Center for European Economic Research (ZEW) concludes that Austria continues to boast extremely business-friendly conditions within the EU despite massive tax competition from Eastern Europe. With a total tax burden of 22.1 percent, the taxes paid in Vienna are lower than in Lon- don, Madrid, Brussels, Milan or Luxembourg. No more inheritance tax since 2008. The abolition of the inheritance tax in Aus- tria and the related tax relief for family-owned businesses is another good reason for international investors to decide in favor of Austria as a business location. Companies operating in Austria are only subject to a unified corporate tax of 25 percent and nothing else. Taxes commonly levied in other countries, such as the trade tax or wealth tax, do not exist in Austria.20
  • 21. Invest in AustriaGroup taxation scheme a major competitive advantage for headquarters.Holdings represent an advantageous legal form of setting up Eastern Europeanheadquarters. The group taxation scheme is extremely attractive for multina-tional companies. If an Austrian company has a direct or indirect participatorystake in a foreign firm amounting to 50 percent plus one share, then the grouptaxation system may be applied by forming a tax group. In this case, the totaltaxable profits and losses of all the group members (including subsidiaries) areallocated to the group leader (parent company). In the case of acquisitions, thecapitalized goodwill of acquired companies can be written off over a period of15 years, an advantage not available in other countries. The existing far-reachingnetwork of double taxation treaties ensures minimal taxation at the source fordividends, interest and licensing fees.Research more, pay less. This principle applies to all companies operating in Aus-tria. Companies can take advantage of the ten percent “research premium” forR&D expenditures as well as contract research. These subsidies are paid in cash.Education pays off. For the education and training of employees, employerscan reclaim a tax-exempt educational allowance of up to 20 percent. Alternately,firms can claim a six percent education credit for education expenditures.BAK Taxation Index 2011 for companies Corporate income tax ratesEffective average tax burden Corporate taxes on undistributed profitsin percent in percent Ireland 14.1 Ireland 12.5Czech Republic 16.2 Slovenia 18.0 Poland 17.0 Poland 19.0 Hungary 18.9 Slovakia 19.0 Netherlands 21.8 Czech Republic 19.0 Denmark 22.1 Hungary 19.0 Austria 22.4 Great Britain 24.0 Sweden 22.6 Austria 25.0 Luxembourg 24.2 Netherlands 25.0 Belgium 24.7 Sweden 26.3 Great Britain 26.3 Germany 29.5 Italy 26.7 Italy 31.4 Germany 28.0 Belgium 34.0 Spain 31.2 France 34.4 France 31.9 Japan 38.0 USA 34.7 USA 40.0Source: BAK Basel Economics and the Centre for European Source: KPMG International 2012Economic Research, 2011 21
  • 22. BUSINESS LOCATION AUSTRIA Productivity as a Trademark Austria among the top three for labor productivity Leading in productivity. With respect to labor productivity per employee in manufacturing industry, Austria is ranked third among the EU-27. According to the EU study, Austria thus outperforms such industrial nations as Germany, France and Great Britain. The level of industrial productivity n Austria is traditionally high. The underlying reason is a future-oriented economic policy, which creates good conditions, especially the optimally trained and highly motivated employees in international comparison. Moderate unit labor costs. The relatively high labor costs are frequently used by critics as arguments against Austria in its role as a business location. However, these costs are more than offset by the enormous productivity gains which have been achieved. An EU-wide comparison by the European Commission shows that nominal unit labor costs in Austria only climbed by 2.7 percent annually on average in the period 1999 to 2009. Thus the cost increases are far below the EU average. Unit Labor Cost Development Labor Productivity 2011 in EU Comparison in Manufacturing Industry GDP per employee in PPS, EU-27=100 Annual change in percent, average 2006 - 2011 Poland -2.3 Luxembourg 1 169.8 United Kingdom -1.0 Ireland 2 142.0 Czech Republic -0.7 Belgium 3 127.4 Netherlands 0.1 Austria 4 116.3 Hungary 0.5 France 5 115.5 France 0.6 Sweden 6 115.2 Austria 0.7 Netherlands 7 111.5 Sweden 1.3 Italy 9 109.7 Slovenia 1.4 Euro area 108.5 EU trading partner 1.5 Germany 12 106.5 Belgium 1.6 UK 13 104.2 Slovakia 1.8 EU-27 100.0 Germany 2.5 Czech Republic 20 74.1 Italy 2.8 Hungary 21 70.8 Luxembourg 4.1 Poland 22 68.8 Bulgaria 27 43.5 Source: European Commission (Ameco database), Source: European Commission, Eurostat, Nov. 201222 Austrian Institute of Economic Research Sept. 2012
  • 23. Invest in Austria“In addition to the highly-qualified employees, the very high level of work motivation (few strikes) and productivity rank among the success factors in favor of Austria as a production location.“ 23
  • 24. BUSINESS LOCATION AUSTRIA “Vienna is absolutely a cosmopolitan city. It completely fascinated me. I was never in so many museums, exhibitions, musicals etc. before in such a short period of time. I enormously benefited from this as a person. “ Football trainer Christoph Daum24
  • 25. Invest in AustriaValue Creation withRecreational ValueUnsurpassed in the world: Austria’s quality of lifeManagers working across the globe confirm it again and again: Austriahas everything required by highly qualified individuals. A well-preserved envi-ronment, green meadows and mountain pastures, crystal-clear waters, goodair quality combined with one of the most diverse cultural offerings and theworld’s highest quality of life make Austria a country which is pleasant to livein. According to the most recent “Quality of Living Survey 2012” prepared byMercer Consulting Group, Vienna is the most livable city in the world.International educational opportunities, extensive recreational offering.Foreign investors do not have to dispense with having their children educated intheir mother tongue. All required facilities are available, from the Vienna Inter-national School and the Japanese School Association in Vienna to the SwedishSchool. Close to 5,000 tennis courts, around 80 golf courses, 22,000 kilometersof ski slopes, 50,000 kilometers of hiking paths 10,000 kilometers of bikingpaths and much more make Austria a leisure paradise.Personal security. Quality of life also encompasses the highest possible levelof personal security, based on a low crime rate. There is hardly any other coun-try in the world which matches Austria in respect to security of persons andproperty. In addition, forward-looking climate protection policies, a pronouncedenvironmental awareness and ecologically-compatible production technologiesmake Austria an environmental role model.The most livable capital city in the world Unmatched quality of lifeRanking by quality of life 10 = Quality of life is very highRang Stadt Land Switzerland 1 9.761 Vienna Austria Austria 2 9.652 Zurich Switzerland     Norway 3 9.453 Auckland New Zealand Denmark 4 9.4212 Amsterdam Netherlands    Germany 7 9.2816 Berlin Germany        Netherlands 10 9.0920 Stockholm Sweden France 17 8.1622 Brussels Belgium          USA 19 8.1329 Paris France Japan 21 7.7738 London UK Great Britain 24 7.4844 New York USA Czech Republic 25 7.3344 Tokyo  Japan Italy 27 7.1952 Rome Italy Poland 39 5.2669 Prague Czech Rep. Hungary 53 4.0574 Budapest Hungary84 Warsaw PolandSource: Mercer Quality of Living Survey 2012 Source: World Competitiveness Yearbook, 2012 25
  • 26. BUSINESS LOCATION AUSTRIA ABA-Invest in Austria offers you comprehensive service – from investment subsidies and market opportunities to tax laws. A team of 25 qualified employees put its know-how at your disposal to provide you with unbureaucratic support, but at no cost to you.26
  • 27. Invest in AustriaThe Best Contact Partnerfor Business Location IssuesAs a consulting company set up by the Republic of Austria,ABA-Invest in Austria (ABA) is the top choice ofinternational investors• Experienced investment consultants personally serve you and provide all the necessary contacts required in Austria. Contact us when you start to consider expanding so that we can provide you with optimal support.• ABA-Invest in Austria offers customized information on Austria as a busi- ness location – sectors, technologies and markets, political and economic conditions.• We are happy to advise you on important issues relating to site selection such as labor and tax regulations, incentives or real estate prices.• Employees of ABA-Invest in Austria assist and support you in handling formalities such as applying for public funding or operating licenses – also in cooperation with the regional investment promotion agencies in the federal provinces.• ABA-Invest in Austria also provides extensive services to support expansion investments after project completion.• Investors can also benefit from the international network of ABA-Invest in Austria’s offices in Vienna, New York and Tokyo as well as the foreign trade centers of the Austrian Federal Economic Chamber.• Specialized brochures. More detailed information on different topics and industries can be found in numerous specialized brochures such as: • Business Location Austria • Private Equity & Real Estate • Automotive Industry • Chemicals / Plastics • Research and Development • Machine Construction / • Environmental Technologies Mechatronics / Electronics & Renewable Energies • Logistics • Information Technology • Starting a Business in Austria • Life Sciences • Tax Aspects of Industrial • Tourism Investments in Austria 27
  • 28. Invest in Austria ABA – Invest in Austria Opernring 3 A-1010 Vienna Tel.: +43-1-588 58-0 Fax: +43-1-586 86 59 E-Mail: Internet: www.investinaustria.ruINVEST IN AUSTRIA