Interview With Mr Rene Siegl, Managing Director Of Austrian Business Agency For The Report Austria 2013
How does ABA-Invest in Austria support investors in locating their business in your country?
Promotional agencies from all countries support investors in a similar way. ABA provides comprehensive information on the business location and the legal framework in Austria. And we assist investors to establish their companies in our market and to reach their goals. In the end, however, it is the customer who decides which services he or she needs. We help investors to find suitable locations for their companies. If they finally decide to bring their families to Austria, we also give them a hand when it comes to choosing an apartment and an appropriate school for their children. Our services are free of charge.
Which investor countries are most important for your Agency?
The most important market for us is Germany. It is responsible for 40-45 percent of our investment projects, followed by Italy and third Russia. Â Eastern European countries, however, are also becoming more and more important. We have noticed a large increase of Slovenian companiesâ€™ interest in investing in Austria over the last two years. Recently Hungarian and Italian investors have started to seek new markets because their home markets are affected by the economic crisis and have become unstable. We are also present in the United States, Japan and China but the neighboring countries are most important for us.
What are the competitive advantages of Austria?
First of all, we are coping with the crisis more successfully than most other countries and doing better in terms of market growth. Not many European countries have managed to keep a positive GDP growth ratio these days.
The second reason is that Austria is a country of high stability and social as well as personal security. Our legal system is predictable.
Furthermore, we provide a convenient base for setting up companiesâ€™ headquarters â€“ especially those reaching out to Central and Eastern European markets. Austrian lawyers, banks and tax advisors dispose of necessary know-how allowing international investors to successfully enter these markets.
The competitive position of Austria results also from the quality and high motivation of the work force. I think, Austrian employees are really among the best worldwide.
Another factor is the structure of Austrian companies. Most of them are SMEs, not many have more than 1000 employees. These companies are flexible and operate on a relatively small market, which allows them to perform well, even in difficult times. A large part of them is not only focusing on the domestic market but also has good results in terms of addressing foreign ones. Thatâ€™s why the contribution of exports to Austrian GDP lies at about 60 %. We have only 8.4 million inhabitants, so it is a small market. That is why Austrian companies have to go out and conquer new markets if they want to grow and prosper.
Austria has a 25% corporate tax rate, which is relatively moderate, especially in combination with the modern group taxation system and 10% cash back for all investment into research and development. It is an attractive incentive for R&D.
Can you mention any other incentives?
There are also significant tax incentives related to hiring employees and starting new business.
Which sectors of Austrian economy seems to be most attractive for foreign investors?
The largest part of the investment these days comes from industrial related services – a sector in which we observe growth. We can also boast of a rapid development when it comes to the life sciences sector, which is also pretty strong in these times of turmoil. Another relatively stable branch is tourism â€“ for Austria, a particularly important one. In terms of Austrian domestic economy, the metal processing industry in general is our most important sector. â€œGreenâ€ technologies are also gaining importance. All in all, in comparison to other European countries, Austria is an attractive destination for investment.
Do you think that foreign capital can benefit from some privatization measures undertaken by the government in the coming years?
This is not the case in Austria. We have seen some privatization of state owned companies in the late 90s but this is finished. There is no political will for further privatization in the next years.
What about the fiscal condition of the Austrian state? What are the most important issues in this area?
For the time being, we need to observe budget constraints. Austrian debts have reached 78 % of GDP. This growth is a result of crisis, but we really need to focus on stabilizing our budget.