questions & answers about Austria

Foreign investments: Austria as Italy's strategic gateway. Key sectors driving growth include energy, advanced manufacturing and digitalisation. Alexander Popp, Managing Partner at Schoenherr, explains the opportunities the country offers to Italian investors.

Austria is a strategic hub for Italy – but with a warning. "The most costly mistake is underestimating critical regulatory pathways – foreign direct investment (FDI) and antitrust notifications, sector-specific permits and notarial formalities – which can lead to delays, restrictive operational covenants or even gun-jumping risks." Alexander Popp, Managing Partner at Schoenherr, outlines for ItaliaOggi the opportunities available to Italian investors, including energy, manufacturing, digitalisation and more…

Which sectors are currently experiencing the strongest growth in Austria, and where do you see the most tangible opportunities for Italian investors in 2026?

Austria's growth is driven by the energy transition, advanced manufacturing and industrial digitalisation. The most attractive short-term opportunities for Italian investors lie in renewable energy generation and storage (onshore wind repowering, utility-scale and rooftop PV, modernisation of small hydro, battery projects), grid-related technologies and energy services – all areas where Italy's industrial know-how and EPC capabilities are highly competitive.

High-tech manufacturing continues to benefit from Europe's push for strategic autonomy. Austria's semiconductor ecosystem (notably in Carinthia/Styria), precision engineering and materials science offer opportunities for acquiring existing sites, capacity expansions and supply partnerships. Mobility and rail, e-mobility components and digitalised industrial services represent attractive niches supported by public procurement and export demand. Life sciences and medical technologies remain resilient in Vienna and Upper Austria.

Real estate is selective, but logistics, light industrial, student housing and energy-efficiency redevelopments are regaining investor interest as financing stabilises. Finally, green finance and sustainability-linked structures are now well-established in Austria's mid-market, creating openings to combine Italian capital with local platforms.

Austria as a bridge between Western and Eastern Europe: how has this position evolved and what new dynamics matter for Italian companies?

Austria retains strong ties with Eastern Europe through history, cross-border economic activity and migration flows from Southeast and Eastern Europe. Vienna's role as a managerial, financial and compliance hub for Central Eastern Europe (CEE) has evolved toward EU-anchored expansion with greater emphasis on risk management. The centre of gravity has shifted toward EU Member States and the Western Balkans, with supply-chain diversification, nearshoring and logistical resilience as dominant themes.

Italian operators should monitor three key dynamics:

• a more stringent environment on sanctions and export controls, requiring robust checks and documentation across regional supply chains;
• the Danube–Adriatic corridor and rail connections, which create practical synergies between Italian ports (e.g. Trieste) and Austrian distribution hubs, enabling just-in-time production and lower-carbon transport;
• competition for skilled labour across the CEE region, incentivising cross-border workforce planning, dual-site production models and selective automation, with Austria acting as the executive layer for governance, finance and technology.

Which legal and tax features are attractive and which areas require particular caution?

Austria offers a stable EU legal environment, strong rule of law and investor-friendly corporate structures.
Corporate income tax stands at 23 %, accompanied by participation exemptions for qualifying dividends and capital gains, a well-regarded group taxation regime and an extensive treaty network that reduces withholding taxes.

The GmbH remains the primary corporate form; recent reforms introduced the more flexible FlexCo, designed for equity participation and employee incentive schemes, simplifying governance for growth companies. Limited partnership structures (including GmbH & Co KG) offer fiscal transparency in certain setups, and private foundations can be effective for holding and succession planning. Corporate and notarial processes are increasingly digital.

Italian investors should assess:

• active FDI screening in critical sectors – early evaluation of notification requirements is essential;
• Austrian merger control, which includes a transaction-value test and may capture deals with modest revenues – coordination with EU and regional filings avoids timing surprises;
• a prescriptive labour and collective bargaining framework, especially on working time and works council rights – integration planning must take this into account;
• detailed permitting requirements for real estate and energy projects – early planning helps avoid delays;
• strict consumer-protection and data-protection rules, requiring careful compliance for consumer-facing and data-intensive business models.

Turning to cross-border financing, banking and structures involving Austrian entities – what should investors know?

Vienna remains a financing hub for groups active across the CEE region. On the debt side, sustainability-linked loans and bonds, Schuldschein placements and unitranche solutions from debt funds are common, often paired with Austrian-law security packages and parallel-debt or collateral-trustee structures. Debtor groups frequently use Austrian holding companies to benefit from participation exemptions and the treaty network, pushing secured leverage at the operating-jurisdiction level.

Equity and co-investment structures are increasingly flexible, with management participation programmes aligned with Austrian corporate law. For family-owned groups, private foundations and hybrid structures remain relevant, requiring careful handling of anti-abuse rules and substance requirements. Banks are cautious but active in core sectors; export credit agencies and multilateral institutions continue to support energy and infrastructure projects with high capital expenditure.

Which regulatory and economic developments should be monitored through 2026?

The EU's Corporate Sustainability Reporting Directive (CSRD), revised in 2025 with greater flexibility on scope and timing, extends detailed ESG reporting to larger unlisted companies and, over time, to non-EU groups with significant EU activity. Austria's implementation will generate substantial workstreams in data, audit and governance.

The EU AI Act begins phased application from 2025–26, affecting high-risk systems in industry, mobility and healthcare. Due diligence will need to incorporate AI governance and compliance strategies. In energy, continued auctions and support mechanisms for renewables, grid expansion and flexibility incentives are expected, while the modernisation of permitting remains a political priority.

In labour matters, whistleblowing compliance and the evolution of hybrid/remote work will shape HR policies. In transactions, heightened scrutiny under FDI regimes and the EU Foreign Subsidies Regulation increases the importance of early regulatory mapping and "clean" funding sources.

And what about investment protection and dispute resolution?

Investment protection in Austria relies on a strong domestic judiciary, EU law guarantees and established international instruments, including the New York Convention on the recognition and enforcement of arbitral awards. Vienna is a leading arbitration venue in Europe. The Vienna International Arbitral Centre (VIAC) administers commercial and investment disputes with an experienced legal community and arbitration-friendly courts. Sophisticated parties frequently include arbitration clauses with Vienna as the seat in cross-border contracts, sometimes combined with escalation clauses requiring negotiation or mediation first.
For purely domestic matters, Austrian courts are efficient and predictable; for multi-jurisdictional projects, arbitration offers neutrality, procedural flexibility and enforceability across the CEE region and beyond.

What is the current presence of Italian investors in Austria?

Italian companies have built significant positions in advanced manufacturing, energy and utilities, consumer goods and retail, mobility and rail, as well as real estate and hospitality.

The most successful cases follow three patterns:

• platform acquisitions in Austria used as a base for CEE expansion, with Vienna serving as the hub for governance and compliance;
• industrial partnerships bringing Italian engineering, design or EPC capabilities into Austrian energy and infrastructure projects, reducing execution risk in complex environments;
• consolidation in niche manufacturing sectors, where Italian entrepreneurs introduce commercial discipline and an export-oriented approach.

Key success factors include:

• early regulatory, merger-control and FDI analysis;
• building a reliable local management team;
• integration planning that considers industrial relations, quality systems and long-term capex rather than short-term cost cutting.

A final piece of advice for an Italian entrepreneur looking at Austria in 2026. What should be the first step, and which mistakes should be avoided?

Start by aligning strategy and structure: define the target business model, the regulatory perimeter (FDI, merger control, sector-specific permits) and the optimal holding and financing setup under Austrian tax rules. Then synchronise deal documentation and timelines with that framework.

The most expensive mistake is underestimating critical regulatory pathways – FDI and antitrust notifications, sectoral permits and notarial formalities – which may lead to delays, restrictive covenants or even gun-jumping risks. A second mistake is assuming that Austria is simply a copy of Italy or the wider CEE region: success stems from excellence in local execution combined with cross-border scale, not from assumptions of market homogeneity.

Alexander Popp | Managing Partner | Schoenherr Austria
T: +43 1 534 37 50478 | E: a.popp@schoenherr.eu

Daniele Iàcona | Head of Italian Hub | Senior Attorney at Law
T: +40 733 730 119 | E: d.iacona@schoenherr.eu