The “privilege for industry” in the Austrian Trade Regulation Act
For those companies coming from countries which do not regulate business people so strictly, for example Switzerland, the Austrian Trade Regulation Act (GewO) frequently comprises a major hurdle, especially when they are engaged in economic activities in one of the so-called regulated trades (82 at present). These regulated trades require proof of qualification (certificate of competence) and a managing director under trade law who possess such qualifications for the corresponding trade.
However, it is important to note the existence of a special feature or special statutory provisions in the GewO which make it unnecessary to provide such a proof of qualification and the appointment of a managing director under trade law. This involves the so-called “privilege for industry” (a legal standard set down in Section 7 GewO).
To put things simply, in line with this provision contained in the law, companies which exercise their particular trade in the form of an industrial company are considered to be privileged (with the exception of trades where the privilege does not apply i.e. master builders, the production of pharmaceuticals and poisons, the manufacturing and processing of medical products, master stonemasons including artificial stone manufacturers and terrazzo makers, the weapons trade and master carpenters).
According to the law, the main characteristics documenting the existence of an industrial company are:
- the extensive use of investment and operating capital;
- putting machinery and technical equipment to different use than traditional and qualified crafts or the deployment of a large number of machines and technical equipment for the same purpose;
- the deployment of machines and technical equipment primarily in spatially or organizationally interrelated industrial premises;
- series production, standardized tasks;
- extensive division of labor within the context of a pre-determined work flow;
- larger number of permanently employed workers and employees predominantly focusing on certain regularly recurring sub-tasks or an automated mode of operation;
- organizational separation in a technical and commercial management, in which case the work carried out by the trader is mainly limited to managerial tasks.
It is important to point out that these characteristics only have to exist if they are relevant for designing work procedures. All of them do not have to be present. However, they have to predominate compared to the characteristics typical of other types of companies.
For foreign companies (especially from the EEA region and Switzerland) organized as industrial companies and which fulfil the above-mentioned criteria, the privilege for industry thus ensures easier access to the Austrian market from a trade law perspective.
For more information see here.