What is Gründungsprivileg (Austrian Startup Capital Privilege)?
Austrian startup privilege allowing a GmbH to be formed with only €10,000 cash share capital (€5,000 paid up) during the first 5 years, instead of the normal €35,000. The reduced Mindestkörperschaftsteuer does not apply during the privilege period. Full €35,000 capital must be in place by year 10.
Current Rate (Steuerjahr 2025)
Minimum €10,000 share capital (€5,000 paid up) for first 5 years
Example
A solo founder in Vienna forms a GmbH in 2025 using Gründungsprivileg. She pays €5,000 into the company bank account before formation. After 5 years, she must have increased capital to €35,000 or convert the remaining €25,000 from retained profits or additional investment.
How Gründungsprivileg (Austrian Startup Capital Privilege) works in Austria
The Gründungsprivileg (§10b GmbHG) was introduced in Austria to reduce the upfront capital barrier for founders wanting the legal protection and credibility of a GmbH structure. Before its introduction, the full €35,000 minimum capital (€17,500 paid up) was a significant obstacle for bootstrapped founders.\n\n**How it works**\nDuring the Gründungsprivilegierung period (first 5 years from registration), the GmbH is treated as a normal GmbH in all respects except share capital. The Gesellschaftsvertrag (articles) must explicitly state that the company is using the Gründungsprivileg. The €10,000 share capital (€5,000 paid up) represents the actual nominal share capital during this period — it is not deferred or phantom capital.\n\n**The 10-year conversion deadline**\nWithin 10 years of registration, the GmbH must either: (a) increase its paid-up share capital to €35,000 through new shareholder cash investment; or (b) convert retained earnings to capital (Rücklagenumwandlung). If neither occurs, the company is in breach of GmbHG and exposed to dissolution proceedings.\n\n**Mindestkörperschaftsteuer during privilege period**\nDuring the Gründungsprivilegierung period, the minimum annual KSt is reduced from €500 to €250/year — a modest but useful saving for early-stage companies. Once the privilege period ends (after 5 years), normal minimum KSt of €500/year applies.\n\n**Creditor implications**\nCreditors and trading partners can see from the Firmenbuch that a company is using the Gründungsprivileg. Some suppliers and lenders view this as a signal of limited capitalisation and may require personal guarantees or advance payment. This reputational consideration is the main trade-off versus the reduced capital requirement.\n\n**Comparison with German UG**\nThe Austrian Gründungsprivileg is structurally different from the German UG (haftungsbeschränkt). Unlike the UG, which can be formed with just €1 and must retain 25% of profits until reaching €25,000, the Austrian GmbH with Gründungsprivileg is a full GmbH from day one, with no mandatory profit retention requirement. The obligation is simply to reach the full €35,000 within 10 years by any means.
Related terms
Austria's main private limited company structure. Requires €35,000 minimum share capital (€17,500 paid up at formation). Shareholders have limited liability. Must be formed by notarial deed and registered in the Firmenbuch (Austrian commercial register).
The Austrian commercial register, maintained by regional courts (Landesgerichte). All GmbHs and AGs must register and file annual accounts here. The Firmenbuchnummer is the company's official registration number, a legal prerequisite for business activity.
Austria's corporate income tax at a flat 23% rate (reduced from 25% in 2024) on the taxable profits of GmbHs and AGs. A minimum tax (Mindestkörperschaftsteuer) of €500/year applies to GmbHs regardless of profit.
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