Vision 2025


Vision 2025

Austrian Angel Investors Association (aaia), AustrianStartups and Austrian Venture Capital and Private Equity Organisation (AVCO) have developed visions for a sustainable and digital future for Austria. The joint vision paper contains a series of recommendations to the government in order to ensure Austria develops into a "leading international location for capital markets and start-ups" by 2025. These recommendations are summarised below:

1. Promote entrepreneurial education at all levels

Steps should be taken to promote independent (economic) thinking and encourage people to act responsibly while they are still at school and during their university education. Entrepreneurial education and training should already be provided at school in the form of guest lectures, project work and the integration of entrepreneurship into the curriculum.

2. Strengthen the capital market

Several measures should be taken to make the capital market more attractive both for institutional investors and young entrepreneurs. The framework conditions for institutional investors should be adapted to international standards to strengthen the over-the-counter capital market. In addition, it has been suggested that a EUR 300 million fund should be established, which in turn would invest in target funds with a focus on ambitious SMEs. Furthermore, to catch up internationally, the Federal Government should provide a deficiency guarantee for initial investments.

3. Modernise the regulatory framework

To speed up the foundation process and reduce complexity and the costs incurred, it has been recommended that the whole process of setting up a business should be digitalized. To this end, a central body responsible for supervising the formation of companies should be established, and it should also provide information and its services in English.

Furthermore, a new legal form should be created that meets the requirements of start-ups. This new legal form should have a reduced share capital, facilitate the transfer of shares and be less formalistic. The introduction of an EU-wide harmonised company form (specifically: an EU limited company) is also being contemplated.

In addition, it is being recommended that the capital market should be made more attractive by introducing legislative reforms. In particular, this should be achieved by reforming the Investment Fund Act (InvFG) to make it more attractive for venture capital and private equity funds.

Finally, the intention is to introduce start-up privileges in the first one to two years, e.g. regarding the amount of social security contributions, business registration, and the amount of corporation tax payable.

4. Founder-friendly tax legislation

Due to a lack of incentives, partly owing to complex tax regulations, Austrian start-ups do not receive much investment. For this reason, it is recommended that a participation allowance be introduced, whereby part of the investment is credited against the respective income tax due. In addition, the taxation of investment funds should be made more transparent, e.g. by means of a legally secure tax treatment of venture capital fund managers and the reversal of the distribution sequence under Section 186 of the Investment Fund Act.

5. Sustainable international orientation

A number of recommendations were made to make Austria more international. The red-white-red card should be reformed, in particular by speeding up the processing of applications and reducing the requirements regarding minimum salary and the requirement for a university degree.

In addition, measures should be taken to make better use of the optimal geographical location of Austria as a place to do business and to make it more interesting for foreign entrepreneurs. Specifically, the start-up visa should be modernised, e.g. by having economic experts decide on whether to grant such visas instead of the immigration authorities.

Probably the most fundamental amendment proposal would be to establish English as the second official language. This would make it much easier for foreign investors to gain access and at the same time demonstrate Austria's openness to the world.

6. Start-up advisory board

Lastly, the interest group demands that an expert council be set up at the federal level as an independent body with a mandate to advise politicians and authorities and make recommendations. Its tasks should include, among other things, positioning Austria as a location in the international tech scene, creating a regulatory framework for successful start-up financing, and developing measures to promote more entrepreneurship in society.