Austria: Investing in Austria
Austria has traditionally attracted a significant amount of FDI owing to its geographical location as an intersection of Eastern and Western Europe. According to UNCTAD's 2021 World Investment Report, FDI in Austria decreased to USD -17 billion in 2020, primarily due to negative reinvested earnings and the divestment of USD 4.7 billion from Mubadala Investment (United Arab Emirates). FDI stock reached USD 194 billion in the same year.
Germany, Russia, and Switzerland account for more than half of Austria's FDI stock. The U.S., Italy, the Netherlands and the UAE are other major investors. Investments are mainly oriented towards professional, technical and scientific activities, finance and insurance, trade, real estate, chemistry and pharmacy. According to the latest figures from OECD, in the first half of 2021 FDI inflows reached USD 3 billion, up from a negative inflow of USD 2 billion in the same period one year earlier.
Austria's strengths are its stable economy, its location at the centre of Europe and its skilled and highly productive workforce. In order to encourage foreign investment, Austria provides welcoming conditions for foreign companies that want to invest in capital-intensive industries and in research and development, for which considerable tax breaks are available. In 2020 the Austrian Parliament adopted a new FDI screening act (Investitionskontrollgesetz, "ICA"), following the EU Regulation (2019/452) setting a new framework for foreign investment screening. The law introduces a review of foreign investment in business activities including R&D of pharmaceuticals, vaccines, medical devices and personal protective equipment and critical infrastructure in the healthcare sector. The threshold at which government approval of the transaction is required has been lowered to 10% foreign ownership for sensitive sectors. Austria does fairly well in terms of business environment as it ranks 27th out of 190 countries in the latest World Bank's Doing Business ranking. The country stands at 19th place in the Foreign Direct Investment Confidence Index 2021.
Foreign Direct Investment | 2009 | 2010 | 2011 |
Performance Index*, Ranking on 181 Economies | 37 | 93 | 51 |
Potential Index**, Ranking on 177 Economies | n/a | n/a | 42 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Austria | OECD | United States | Germany |
Index of Transaction Transparency* | 5.0 | 6.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 5.0 | 5.3 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 7.0 | 7.3 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
Advantages for FDI in Austria:
Austria’s weak points for FDI are:
Find out more about Investment Service Providers in Austria on GlobalTrade.net, the Directory for International Trade Service Providers.
Any Comment About This Content? Report It to Us.
© Export Entreprises SA, All Rights Reserved.
Latest Update: June 2022