Successfully investing in Austria

last updated on 6 October 2025 | reading time approx. 3 minutes

How do you assess the current economic situation in Austria? »
How would you describe the investment climate in Austria? Which sectors offer the largest potential? »
What challenges do German companies face during their business ventures into your country? »
Why should companies enter/remain in the Austrian market? »
How will Austria develop? »

How do you assess the current economic situation in Austria?

Austria is in its third year of recession and has therefore been the longest recession since 1945. With GDP falling by 1.2 percent in 2024, Austria recorded the sharpest decline in economic output of all EU countries. Industry and the trade, transport, accommodation and catering sectors were mainly responsible for this decline. In particular, the persistently weak industrial economy in the eurozone caused domestic industry to shrink. Austria´s industry is also burdened by high energy prices and high unit labour costs. After three years of decline, the construction industry is in a phase of stabilisation. The emerging armaments programmes and the expansive German fiscal policy on the horizon represent upward opportunities for the Austrian economy. However, the corresponding effects are not expected until next year. On an annual average, the Austrian economy will therefore continue to shrink in 2025. At the beginning of 2025, the inflation rate rose again to over 3 percent after fiscal policy equalisation measures in the energy sector expired. An inflation rate of between 2.6 percent and 2.9 percent is expected for 2025. Despite the current moderate economic development, the labour market remarkably stable. This is also due to an increase in employment in the public sector. Furthermore, Austria is facing an unexpectedly high budget deficit, which is forcing the new government to make austerity measures. These are likely to have a negative effect on domestic economic activity and employment.

How would you describe the investment climate in Austria? Which sectors offer the largest potential?

In 2024, the low momentum of the European economy, high energy prices, wage increases and high financing costs weighed on investment activity. However, the investment climate will improve from mid-2025 due to the ongoing easing of monetary policy and the downward trend in inflation. The new government has pledged to strengthen the construction sector. The focus will be on creating affordable housing. In order to strengthen the construction sector, the government has agreed on a package of measures that includes simplifying and speeding up the construction process. The Austrian industry also hopes to benefit from the rearmament triggered by the changed geopolitical situation.

What challenges do German companies face during their business ventures into your country?

German entrepreneurs are generally not confronted with any extraordinary challenges when they become involved in Austria. Of course, there are differences, but these are of secondary importance and usually play only a minor role. Due to the common language as well as the geographical proximity, many procedures are similar - also in tax law. Tax, company and commercial law are largely the same as in Germany, so that no major surprises are to be expected.

Secure and stable economic conditions in Austria makes the market entry for German companies manageable and plannable. Negative surprises, however, are always to be found in the area of trade law and plant licensing. On the whole, however, German entrepreneurs should be able to find their way around in Austria relatively quickly and should not encounter any significant problems. However, it is advisable to seek tax and legal advice when entering the market in order to avoid unnecessary stumbling blocks.

Why should companies enter/remain in the Austrian market?

Austria offers attractive conditions for foreign companies. As one of the richest countries in the EU, Austrian consumers have above-average purchasing power. The infrastructure is highly developed and the administration is modern and efficient. In addition, the quality of life in Austria is very high. Vienna is regularly ranked among the most livable cities in the world. The high level of personal safety certainly contributes to this. The security of supply with electrical energy has the highest priority in Austria, which is why Austria has a top position in this respect in comparison with other European countries. Furthermore, Austria is politically very stable and has a reliable legal system. Relations between employers and employees are traditionally very good, which results in a very low number of strike days. Austria has a large highly qualified workforce, which is reflected in high labor productivity. This is partly due to the dual education system practiced in Austria, which combines theory and practice and leads to an optimal link between business and education. Another advantage of Austria is its central location in Europe. Vienna is the leading hub for air traffic and logistics to Central and Eastern Europe. Therefore, Austria offers excellent access to the Central and Eastern European markets. Last but not least, Austria is also fiscally competitive due to attractive group taxation and a dense network of double taxation agreements.

How will Austria develop?

According to the forecasts of various economic research institutes, the domestic economy will pick up speed again in 2026 and grow by between 1.1 percent and 1.2 percent. Inflation should also be well below 3 percent again in 2026. The main uncertainty factors for further economic development are the international economy, the expansive measures announced in the military sector, further developments regarding the war in Ukraine and the effects of fiscal austerity.

The demographically driven labour shortage poses a challenge. It will therefore be crucial in the long term whether enough skilled labour can be trained or brought into the country to meet demand. Austria must develop a strategy to become even more attractive for qualified immigrants. It is expected that greater importance will be attached to productivity-enhancing topics such as education, digitalisation and research in the coming years. In addition, enabling the energy transition will present Austria with major challenges but also opportunities.