What is GmbH (Gesellschaft mit beschränkter Haftung)?

The GmbH is Austria's most common business structure for founders wanting limited liability. It is governed by the GmbHG (GmbH-Gesetz) and broadly equivalent to the UK private limited company or German GmbH.\n\n**Formation requirements**\nForming an Austrian GmbH requires: (1) a Gesellschaftsvertrag (articles of association) executed before an Austrian notary or notary substitute; (2) minimum share capital of €35,000, with at least half (€17,500) actually deposited in a blocked bank account before registration; (3) appointment of at least one Geschäftsführer (managing director), who does not need to be an Austrian resident; (4) filing by the notary with the Firmenbuch at the competent Landesgericht.\n\n**Gründungsprivileg**\nAustria's startup privilege (see separate entry) allows a GmbH to be formed with only €10,000 paid-up capital during the first 5 years, reducing the up-front cash requirement. This is heavily used by bootstrapped founders.\n\n**WKO membership**\nMost commercial GmbHs are legally required to be members of the Wirtschaftskammer Österreich (WKO), the Austrian Federal Economic Chamber. WKO membership fees depend on revenue and industry but typically range from a few hundred to a few thousand euros per year. WKO membership comes with access to insurance schemes, industry data, and subsidised training.\n\n**Tax treatment**\nA GmbH pays Körperschaftsteuer at 23% on taxable profits. There is no Austrian trade tax equivalent to Germany's Gewerbesteuer — the combined effective corporate rate is simply 23% KSt. Shareholders pay 27.5% Kapitalertragsteuer (KESt) on dividends received. This contrasts with the sole trader route, where business profits are subject to personal Einkommensteuer at up to 55%.\n\n**Director and shareholder social insurance**\nGmbH shareholders owning more than 25% of shares are subject to SVS (Sozialversicherung der Selbständigen) contributions on their income, not the employee ASVG system. This distinction has significant practical implications (see SVS entry).\n\n**Ongoing obligations**\nA GmbH must: prepare annual UGB accounts (Jahresabschluss); file accounts with the Firmenbuch within 9 months of year end; hold at least one general meeting annually; maintain a Firmenbuch register of shareholders; file KSt, USt, and Lohnsteueranmeldungen electronically via FinanzOnline.\n\n**Dissolution**\nA GmbH can be dissolved voluntarily (by shareholder resolution and liquidation) or involuntarily (by court order or insolvency). Liquidation requires settlement of all liabilities and distribution of remaining assets to shareholders, with final Firmenbuch deregistration.