Austria introduces a new company form for startups

Effective 1 January 2024, Austria has introduced the Flexible Company (“Flexible Kapitalgesellschaft" or FlexCo) as a new legal form of corporation specially oriented to the needs of startups. This measure is part of the Startup Package of the Austrian Federal Government designed to promote young companies.

FlexCo, the new legal entity established within the context of the Austrian Flexible Company Act (FlexKapGG) strengthens the international competitiveness of the business location and makes Aus-tria even more attractive for startup founders.

The new company form represents a hybrid form of the limited liability company (GmbH) and a bit of the stock corporation (AG). Most of the regulations relating to the Flexible Company are essentially based on the Austrian Limited Liability Companies Act, whose rules also apply via subsidiary applica-tion, and also include a few provisions from the Austrian Stock Corporation Act. In addition to simplify-ing and streamlining the relevant stipulations, the new law also focuses on enabling employees to par-ticipate in the success of the company. This is particularly important to young companies which aim to win the loyalty of highly sought-after skilled workers but are frequently unable to compete with the sal-aries offered by larger, existing companies. The FlexCo offers companies the possibility to incentivize employees by offering them equity interests (company value shares).

Compared to the GmbH, the capital requirements of the startup are significantly reduced in the initial phase. The stipulated minimum share capital consisting of the capital contributions of the shareholders equals € 10,000, of which only half must be paid in cash. After the founding of the company, the amount of paid-in share capital can be used for business purposes. The minimum corporate income tax to be paid when no profits are generated in the given fiscal year is € 500. This tax can be offset against taxes imposed on future profits.

The acquisition of own shares is permissible up to the maximum of one third of the share capital. This will allow the company to have shares ready for future investors. Furthermore, the new regulations al-low for flexible capital-raising measures such as the contingent capital increase for the purpose of granting subscription rights or share options to employees, as well as authorized capital for the issu-ance of new shares. Shareholders can also participate in the FlexCo with a capital contribution of € 1.

Further information on this topic can also be found in the blog post New Startup Package: Employee Participation Models and Startup package: FlexCo and new employee participation regime from 1.1.2024.

AI location Austria: Top research, talents and international events

Austria is a dynamic business location for AI. A strong research network, targeted funding programmes, an active community and a large talent pool promote the exchange between science, business and society. This makes the country an exciting hub for AI developments and international events such as TEDAI.

NXAI: Top researchers in Austria develop solutions for industrial companies

Research on alternative AI models conducted by Sepp Hochreiter and his team at the JKU in Linz is recognised worldwide. With their company NXAI, founded in 2024, they want to transform basic research into industrial companies and develop products from it. NXAI aims to raise 100 million euros by the beginning of 2025. Thanks to the excellent reputation of JKUI and the AI degree programmes, many talents come to Austria.

AI as a booster for life sciences innovations

Artificial intelligence (AI) is revolutionising the field of life sciences and strengthening Austria as a location for research and development. Research institutions such as the Research Centre for Molecular Medicine (CeMM) and the newly founded Research Institute for Biomedical Artificial Intelligence (AITHYRA) are making a significant contribution to this.

ABA webinar: Introducing the new FlexCo and its benefits, 1. Feb 2024

Do you want to know more about the new company form FlexCo? Then take the chance to register to our English webinar on February, 1^st where we will share the first experiences!