The two most common forms of companies in Austria are the company with limited liability (GmbH) and the stock corporation (AG).

As a legal entity, the GmbH comes into existence upon its registration in the commercial register. The application for registration must include the notarised signatures of all managing directors. The articles of association have to be established in form of a notarial deed (a written document executed by a notary public) and must state at least name and seat of the company, the business purpose, the amount of share capital and the capital contributions to be made by each shareholder.

The minimum share capital of a GmbH is € 35 000. In general, at least half of the share capital must be raised in cash, whereas the remaining part may be raised in other assets (contribution in kind). Under certain circumstances the capital may be raised solely in assets other than money. The articles of association may provide additional contributions to be paid by the shareholders.

The minimum share capital of an AG is € 70 000. The shareholders may agree on an additional contribution beyond the nominal value of the shares (share premium). The share premium will be booked in the balance sheet of the company as capital reserve.

The amounts contributed to the company (including share premium) are subject to 1 % company tax. Besides, a registration fee between € 450 and € 750 has to be paid upon formation. The entire formation costs (including taxes, attorney's and notarial fees) usually amount to approximately € 3.500 for a GmbH and € 5.000 or AG.

Shareholder contributions and shareholder loans can be used as a means of financing the company. Neither contributions nor loans are subject to formalities. Shareholder contributions are subject to a 1 % capital transfer tax. They are tax neutral concerning the taxable income.

Shareholder loans are subject to a stamp duty of 0.8 % of the loan.

A bank loan is a very common way of financing. The amount of the loan is the basis for a 0.8 % stamp duty. As security for such a loan, shareholders may issue guarantees, which will not trigger any taxes or stamp duties.