Austria – Investment Climate

Reasons to Invest in Austria - Perspectives

Peter Ch. Löschl, ABA – Invest in Austria

April 2016

Strong Economy in the

Heart of Europe

� Area: 83,872 km²

� People: 8.5 m.

� GDP growth: 0.5% (forecast 2015)

� GDP / capita: € 36,980

� R&D quota: 3.01% (forecast 2015)

Top Investor: Austrian FDI in CEE

Percentage of total investment in respective country and Austria‘s rank

as investor, 2013

27.3

21.6

17.9

16.2

13.9

13.2

11.8

11.4

10.5

8.1

7.8

3.2

Croatia 1

Slovenia 1

Bosnia-Herz. 1

Romania 2

Serbia 1

Slovakia 2

Bulgaria 2

Czech Rep. 3

Macedonia 2

Albania 3

Hungary 4

Ukraine 5

Source: WIIW (Vienna Institute for International Economic Studies)

Vienna International Airport –

The Leading Hub to CEE and SEE

Austrian Airlines:

23 countries

41 destinations

559 flights per week

Source: Vienna Airport

20% New Austrians

Germany

Serb, Mont, Kos

Turkey

Bosnia Herz.

Romania

Croatia

Poland

Hungary

Czech Rep.

Slovakia

Russia

Italy

Foreign citizens Already naturalized 226,882

185,592

132,661

74,639

Source: Statistik Austria 2015

208,947

69,859

63,197

45,589

44,209

30,017

28,510

27,916

You Know Austria Like

ThisG

G or Like ThatG

G or Like ThatG

G but Best Like That

You Are Investing in an Industrial Country

Production sector as percentage of GDP, 2014

30.7

28.4

25.7

25.6

24.4

21.4

20.3

19.9

19.5

Germany

Austria

Switzerland

Japan

EU-28

Netherlands

USA

UK

France

Source: OECD, Eurostat 2015

You Are investing in an Industrial Country

Production sector as percentage of GDP

Production 29%

Services 55%

Tourism & Leisure Ind. 15%

Agriculture 1%

Source: Statistik Austria 2015

Profit from Highly Productive Employees

263

132

130

128

124

124

108

107

107

100

Luxembourg

Ireland

Netherlands

Austria

Sweden

Germany

Great Britain

Euro area

France

EU-28

Source: European Commission, Eurostat (06/2015)

Labor productivity

GDP per person employed in PPS, EU-28 = 100

Highly Productive Employees

Labor Productivity, GDP per person employed in PPS, EU-28=100

168,4

144,1

128,9

115,7

113,4

112,8

112,2

107,5

107,3

106,4

102,4

100,0

76,7

73,3

71,7

42,9

Luxembourg

Ireland

Belgium

France

Austria

Netherlands

Denmark

Euro area

Italy

Germany

United Kingdom

EU-28

Czech Republic

Poland

Hungary

Bulgaria

Source: European Commission, 11/2015

No Strikes

Working days lost to strikes per 1,000 employees –

annual average 2005-2013

1

2

5

5

8

9

16

23

53

66

76

77

102

135

139

Switzerland

Austria

Poland

Sweden

Netherlands

USA

Germany

United Kingdom

Norway

Spain

Finland

Belgium

Canada

Denmark

France

Source: WSI - Hans Böckler Foundation 2015

Expert Staff for

Sustainable Corporate

Sucess in R&D

� Dual educational system

� Vocational schools (HAK, HTL

unique to Austria)

� 21 Academies of applied

sciences offering approx. 400 courses

� 22 public universities

�12 private universities

� Foreign language competencies

� More than 1,000 extra-university

research institutions

Austria‘s R&D Expenditures Grow

Above Average

As percentage of GDP

Source: Eurostat

1,5

1,7

1,9

2,1

2,3

2,5

2,7

2,9

1998 2000 2003 2004 2005 2006 2007 2008 2010 2012 2014

Austria

Gemany

EU-27/28

* Forecast 2015

3.01 *

Austrian Cluster

Landscape� Economic and technological

cooperation

� More than 50 clusters

Approx. 3,500 companies

Approx. 420,000 staff

COMET – All Centers in Austria

Innovation Hub Austria

OPEN

INNOVATION

Excellence

in professional

Research and

Development

StartUp Hub &

Industrial Clusters

Unique

educational system

and access to

Universities

Via Two Main Program Lines

Subsidies for R&D Projects are Available

„Special programs“

„Top Down“

Thematic calls

„Bottom-up“

Any topic

Any time

„Basic programme“

Austrian Expenditures in R&D

Total 2015: 10,104.44 m. €

Federal 3114

Regions 443.2

Companies 4764.9

Foreign 1529.3

Others 153

Source: Statistik Austria 2015

Investor-friendly Tax System

Corporate tax rate: 25%

Modern group taxation

Tax premium for R&D: 12%

No trade tax

No net worth tax

Double taxation treaties

Economic and Social

Stability

� Reliable legal system

� Efficient public

administration

� High personal security

� Very low strike rate

Unmatched Quality of LIfe

Maximum = 10

9,73

9,57

9,51

9,31

9,22

8,68

8,22

8,16

7,95

7,80

7,73

6,99

4,68

3,94

Switzerland 1

Norway 2

Austria 3

Germany 6

Netherlands 7

Belgium 15

USA 18

Japan 19

France 20

Czech Republic 22

United Kingdom 23

Italy 29

Poland 49

Hungary 56

Source: World Competitiveness Yearbook 2015

Attraktive for More than

300 Regional Headquarters

Vienna: HQ-Location for

International Organizations

and Top Conference City

� Only UN headquarters in the EU

� 30 HQs of international

organizations in Vienna

� More than 14,000 international

staff and diplomats (UN) are

living in Vienna

� Leading conference city

(according to ICCA study)

� Skilled HQ staff available

FFG Structural

Programs

� AplusBaccent

build!

CAST

INiTS

SPG – Science Park Graz

tech2b

ZAT – Zentrum für angewandte

Technologie

� COIN – Cooperation and

Innovation

� Research Studio

� IraSME

Company Incentives Stages

Pre-Seed Early Stage Later Stage

Basic

Research

Incubator Seed Start Up First

Stage

Second

Stage

Third

Stage

IPO

Com

pany F

oundin

g

Grant

Grant

Grant

Grant

Grant

Direct (soft) loans

Direct (soft) loans

Guarantees

Guarantees

Newly Established Companies

Source: Austrian Economic Chamber

14.161

21.706 21.954

26.035

28.322

31.00130.304

32.712

35.279

36.94637.054

Factors for the

Startup Hotspot Austria

� High educational level for

technical jobs

� Differentiated funding system

� Investment-friendly tax system

– 12% tax credit for R&D

expenditures

More Factors for the

Startup Hotspot Austria

� Self-organization in startup

clusters and coworking spaces

� Supporting network (early-

stage investors, business

angles, incubators)

� “Limited company” with 5,000

€

as minimum cash contribution

5 Reasons for Companies to Invest in Austria

�Competitive technologies & innovative business environment

�Qualified & flexible employees

�High stability & security

�Central European location

�Huge market potential

Who We Are

� Consulting company for

international investors

� Owned by the Ministry of

Economic Affairs

� 25 experienced employees

� International network with

offices in Shanghai and

Tokyo

� National network

Vigorous Support for

International Investors

Cost free consulting services :

� Company foundation

� Legal and tax aspects

� Location search

� Incentives

� Regulations

� Business contacts

G making your entry in Austria

easy

ABA – Invest in Austria

Your Contact in Vienna Peter Ch. Löschl

Tel: +43 1 588 58 52

office-cee@aba.gv.at

www.investinaustria.at

Economy 3.0

Source: Austrian Economic Chamber

Economy 1.0 Economy 2.0 Economy 3.0

Nature of need Physical survival Human prosperity Immaterial wealth

Driving force Development Actualization Recognition

Nature of work Manual labor Repetitive labor Intellectual or creative activity

Dominant sector Agriculture Industry Service industry

Most important form of

capital

Land and natural capital Machines and material

capital

People and intellectual capital

Stage of knowledge society Oral society Literate society Digital society

Geographical focus Local National Global

Key concept to satisfaction

of needs

Production Consumption Barter

Purpose of the system Production Distribution Interaction

Market as5 Food in return for work,

indentifying markets

Goods in return for money,

setting prices

Identities for / versus identities,

identifying communities

Inherent values Hard work, obedience Rationality Identity

Employer-employee

relationship

Indipendent, but possibly

subject to feudal rule

Employees and employers Fellow entrepreneur

Customer as5 Mass phenomena Recipient Co-producer

Property, definition and use

of profit

Entrepreneur Entrepreneurs and

shareholders

Customers, investors,

employees, the public

Dominant political

imperative

Democratization Liberalization Intellectualization