Pro-Business Austria Lures Bulgarian Companies to Expand

Business | March 7, 2012, Wednesday // 19:34
Bulgaria: Pro-Business Austria Lures Bulgarian Companies to Expand

A business-friendly climate, clear rules and excellent transport links make Austria an appealing location for Bulgarian companies keen to expand in Central and Western Europe.

This is the conclusion that business representatives from Austria and Bulgaria agreed upon at a Sofia forum, organized jointly by the Bulgarian Industrial Association (BIA), the Austrian Business Agency (ABA) and Austria's Embassy on Wednesday.

"If you want to start business in Austria, we, the Austrian Business Agency, can give you support in setting up a company, obtaining work permits and business licenses, consulting on incentives and site identification. And we will do so at no cost to you," Peter Loschl, consultant CEE at ABA, told the forum participants.

Attractive corporate tax rate and group taxation are particularly business-friendly measures benefiting international companies, according to Thomas Haneder from TPA Horwath Tax Consulting.

Companies operating in Austria are only subject to a unified corporate tax of 25% and nothing else. Taxes commonly levied in other countries, such as the trade tax or wealth tax, do not exist in Austria.

"I am aware it is difficult to impress Bulgarians, whose flat rate stands at 10%. Yet you should know Austria's taxation offers more possibilities for tax reductions," Haneder told the forum participants.

He stressed that companies in Austria can take advantage of the 10% "research premium" for R&D expenditures as well as contract research. The tax credit is given even in years of losses.

"Group taxation is another major advantage of Austria's taxation system, since taxable profits or losses of the group members are added to those of the parent company," the Austrian expert pointed out.

"Now is the right time to launch an IPO," Beatrix Schlaffer from the Vienna Stock Exchange said as she presented the potential for success of listed companies.

"The beginning of 2012 saw the first signs of improvement in market sentiment, but this must consolidate during the year. On this assumption careful optimism is justified," she added.

Schlaffer, key account manager IPO, stressed that the Vienna Stock Exchange is not too large and this contributes to the companies' success.

"Even medium-sized companies receive attention – from the media and analysts."

Bulgarian companies often find it difficult to set foot in Austria due to the strong presence of clusters, high taxes, limited access to crediting and labor market restrictions.

But when they manage to do so, it is really worth it. Ober?sterreichische Biodiesel GmbH, a biodiesel factory located in the Port of Enns (Austria), which has been operating for a year already under Bulgarian management, proves that.

In July 2010 the plant was purchased by the Bulgarian company Bulmarket DM, which owns and operates another biodiesel plant located in Bulgaria, near the town of Ruse, on the Danube.

"There are a number of advantages for a Bulgarian company to do business in Austria – very well organized, competence and cooperative administration, great location for expansion, perfect infrastructure and liberal legislation, to name a few," Hristo Tonchev, Ober?sterreichische Biodiesel General Manager, shared at the forum.

But he also had a word of caution for the Bulgarian businessmen getting ready to step on Austria's market.

"Be prepared for high labor costs, uncompromising clients and expensive consultancy fees. You will find these a far cry from what you have become used to here, in Bulgaria," warned he.

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Tags: Austria, Bulgaria, Austrian, Bulgarian

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