Construction—Austria—Q&A guide
Construction—Austria—Q&A guide

The following Construction practice note provides comprehensive and up to date legal information covering:

  • Construction—Austria—Q&A guide
  • 1. If a foreign designer or contractor wanted to set up an operation to pursue the local market, what are the key concerns they should consider before taking such a step?
  • 2. Must foreign designers and contractors be licensed locally to work and, if so, what are the consequences of working without a licence?
  • 3. Do local laws provide any advantage to domestic contractors in competition with foreign contractors?
  • 4. What legal protections exist to ensure fair and open competition to secure contracts with public entities, and to prevent bid rigging or other anticompetitive behaviour?
  • 5. If a contractor has illegally obtained the award of a contract, for example by bribery, will the contract be enforceable? Are bribe-givers and bribe-takers prosecuted and, if so, what are the penalties they face? Are facilitation payments allowable under local law?
  • 6. Under local law, must employees of the project team members report suspicion or knowledge of bribery of government employees and, if so, what are the penalties for failure to report?
  • 7. Is the making of political contributions part of doing business? If so, are there laws that restrict the ability of contractors or design professionals to work for public agencies because of their financial support for political candidates or parties?
  • 8. Is a construction manager or other construction professional acting as a public entity’s representative or agent on a project (and its employees) subject to the same anti-corruption and compliance as government employees?
  • 9. Are there any other important legal issues that may present obstacles to a foreign contractor attempting to do business in your jurisdiction?
  • More...

Construction—Austria—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to construction rights in Austria published as part of the Lexology Getting the Deal Through series by Law Business Research (published: August 2020).

Authors: WEBER & CO—Klaus Pfeiffer; Katharina Kitzberger; Daniela Witt-Dörring

1. If a foreign designer or contractor wanted to set up an operation to pursue the local market, what are the key concerns they should consider before taking such a step?

From a legal perspective, companies entering the Austrian market are usually concerned about which legal entity is most suitable – an Austrian branch of a foreign company or an Austrian subsidiary (joint-stock company, private limited liability company, or partnerships with or without limited liability). This decision is also driven by tax implications and the labour law regime. Currency concerns only play a minor role because of the single market. From a tax perspective, foreign designers or contractors who do not have their seat, place of management, residence or habitual abode in Austria are subject to limited tax liability for Austrian-source income. Austrian-source business income is subject to tax in Austria if the foreign designer or contractor has a permanent establishment (PE) or an agency PE in Austria, or if Austrian real property is concerned. However, income derived from commercial consulting, technical consulting or the provision of personnel in Austria is also taxable in Austria without

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