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Marion Biber, Director Southern Europe

Ljubljana, November 13th 2012

ABA-Invest in Austria

Austria – the Unknown Neighbour?

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Surely you know Austria like this…

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…but did you also know…

Source: OECD, Eurostat

Production sectors as percentage of GDP, 2010

29,2

27,8

27,3

27,2

24,7

23,7

21,3

21,8

18,8

Austria

Germany

Japan

Switzerland

EU-27

Netherlands

USA

UK

France

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1,5

1,7

1,9

2,1

2,3

2,5

2,7

2,9

1998 2000 2003 2004 2005 2006 2007 2008 2009 2010 2011

Austria‘s R&D expenditures grow above average

Germany Austria

EU-25

Source: Eurostat

*Forecast 2012

2.8 *

As a percentage of GDP

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The Austrian market - small but profitable

8.4 million inhabitants

50 m. consumers within 400 km

GDP/capita: 32,110 €

#3 in the EU regarding purchasing

power

GDP growth 2012: 0.8% (forecast)

Inflation 2012: 2.4% (forecast)

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Profit from highly productive employees

Source: IW Köln 2012

73

76

84

86

87

90

98

100

102

107

113

115

Japan

USA

Czech Rep.

Netherlands

Austria

Sweden

Belgium

Germany

Denmark

Italy

France

UK

Unit labor costs 2010, Germany = 100

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Motivated staff secure your success

Source: World Competitiveness Yearbook 2012

10=Motivation of staff is high

8,05

7,76

7,73

7,39

7,35

7,17

6,55

6,07

5,87

5,78

5,2

5,08

5,03

4,78

Switzerland 1

Denmark 2

Austria 3

Germany 5

Japan 7

Netherlands 10

USA 20

Belgium 27

Czech Rep. 30

UK 31

Italy 41

Polamd 46

Hungary 47

France 50

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Labour law – basic information There is no general minium wage, minimum wages regulated

in sectoral agreements

Wages paid 14 times per year

Working hours: 38.5 or 40 hours / week (excluding lunch brake)

Usually 25 days vacation per year

New system for severance payments – no need for provisions

Employees may be dismissed without stating a cause

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Economic and social stability

Eurozone

Lowest strike rate

High level of personal security

Reliable legal system

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Investor-friendly Tax System

Corporate tax rate: 25%

Modern group taxation

Tax premium for R&D: 10%

Double taxation treaties

No „Black List“

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Taxation of physical persons

EUR %

- 11.000 0%

11.000-25.000 36,5%

25.000 – 60.000 43,2%

> 60.000 50%

AUSTRIA

Source: Leitner & Leitner, 02/2012

SLOVENIA

EUR %

- 7.529 16%

7.529 – 15.057 27%

>15.057 41%

EUR %

- 11.000 0%

11.000-25.000 36,5%

25.000 – 60.000 43,2%

> 60.000 50%

EUR %

- 7.529 16%

7.529 – 15.057 27%

>15.057 41%

Employer‘s cost: (gross salary*14) + appr. 30%

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Taxation of physical persons – examples

Source: Leitner & Leitner, 02/2012

Gross salary €

Net salary in Austria

Net salary in Slovenia

25.000 18.400 15.684

50.000 31.700 27.180

75.000 46.200 38.600

100.000 60.600 50.160

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Constitution of a limited company in Austria (GmbH)

Minimum share capital 35.000 €

Articles of Association signed by notary deed

Time for registration at company register appr. 2 weeks

Cost of constitution ca. 10% of share capital

Taxation 25%, minimum tax 1.750 €/year

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Trade license

Non-regulated (e.g. trade/commerce) or regulated trades (e.g. restaurant, construction)

Holder of the trade licence has to be appointed

Can also be employed (at least 20 hours/week)

General prerequisites: Over age of 18 Austrian or EU citizen No reasons for exclusion (e.g condemnation)

Special prerequisites depend on activity

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Incentives support your project

Examples:

Fiscal for R&D and training of staff

Grants/credits with low interest rates for investments in production up to 25%

Grants/credits with low interest rates for R&D projects up to 50%

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Metal industry in Austria (1)

Steel production

13 companies 13.238 employees Production value 7,5 bn € Main companies: Böhler, Breitenfeld,

Voestalpine, Schoeller Bleckmann

Source: Steel association

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Metal industry in Austria (2)

Mechanical and metal articles

1.400 companies with 158.000 employees

Production value 2011: 36,5 bn € R&D expenditures 2011: 483 m € Export quota: 65% (26,3 bin €) GDP share: 6,6% Niche products

Source: FMMI

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NACE Top Sectors - Production

Year 2011

in Mill.€

2511 Metal structures 3,057

2822 Lifting and handling equipment 2,949

2830 Agricultural and forestry machinery 1,771

3020 Railway locomotives and rolling stock 1,441

2892 Manufacture of machinery for mining, quarrying and construction 1,191

2550Forging, pressing, stamping and roll-forming of metal;

powder metallurgy 1,279

2420 Steel tubes, pipes and fittings 1,270

2573 Tools 1,133

2825 Non-domestic cooling and ventilation equipment 916

Total Production Value FMMI 2011 36,500

content

Biggest sectors

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R&D for the metal industry and machinery R&D expenditure

800 Mio. € (2009) 469 companies active in R&D

Excellence R&D Centres, e.g.• ACCM - Austrian Center of Competence of Mechatronics,

Upper Austria• K2-Mobility - K2-Mobility SVT sustainable vehicle

technologies, Styria• MPPE - Integrated Research in Materials, Processing

and Product Engineering (MCL), Styria• K1-MET - Competence Center for excellent Technologies

in Advanced Metallurgical and Environmental Process Development, Upper Austria

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Anger Machining

Anger Machining builds the machines for the production of the extremely precise valve control components and other aluminum parts of the Chrysler Kokomo Transmission Plant in Indiana, USA.

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Fill Metallbau

4.5 m € costs the sophisticated front of the new ZF Friedrichshafen AG in Passau.

Fill Metallbau built it for the automotive supplier in only 3 months.

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AVL

AVL is the world's largest privately owned company for development, simulation and testing technology of powertrains (hybrid, combustion engines, transmission, electric drive, batteries and software) for passenger cars, trucks and large engines. The hightech company AVL employs 5.250 people worldwide. Turnover in 2011 was 830 million Euro.

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Tubex

The German company produces special aluminium tubes for the pharmaceutical, food and chemicale industry, employing 140 employees in Austria.

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ABA-Invest in Austria

Consulting company owned by the Ministry of Economic Affairs

Consulting services and information for international investors - free of

charge

29 employees

International network

Cooperation with the regions

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What we can do for you … Consulting services – fast, non bureaucratic and free of charge

General information on Austria as a business location

Market data

Legal and tax issues – contact network

Labour laws, labour costs

Site identification

Information about incentives and public contributions

Organisation of “fact finding” missions

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ABA – at Your Service!

Marion BIBERDirector Southern Europe

E-Mail: m.biber@aba.gv.atTel: +43 1 58858 -32

www.investinaustria.at