If you’re at least 18 years old and a citizen of the EU, an EEA country or Switzerland, you may be able to become a freelancer in Austria. Candidates must not have a criminal record or financial offense that would prevent them from trading in the country.
Individuals who want to know how to become a freelancer in Austria but don’t qualify for residency status based on their citizenship can consider getting a residence permit. There are a few types of residency permits, including the following.
You can get this residency permit as a self-employed individual if you’re a key worker. This means that your intended occupation involves a significant investment in the country’s economy, creates new jobs, secures existing jobs, introduces technological expertise or is significant to the Austrian economy in another way.
You’ll need to apply for a Red-White-Red Card before registering as a freelancer. To apply, go to the Austrian embassy or consulate in your country. If you’re already in Austria, apply at the applicable residence authority.
This type of residency permit is usually easier for expats to get. You’ll need to show that you’re bringing an innovative type of business to the country. In addition, you’ll have to show a business plan and proof of at least €50,000 in start-up capital. There is also a points-based test that you’ll have to complete.
If you don’t intend to settle in Austria permanently but want to stay for longer than six months, you may qualify for a self-employed residence permit. This requires you to have a valid contractual agreement that spells out your freelancing terms and length.
As of 2019, there were 382,810 one-person businesses in Austria. These are sole proprietors who are self-employed. But not all of these are freelancers.
Austria has the following two sub-categories for sole proprietors:
Although this system seems more complex than that of other countries, Austria is one of the easiest companies in which to do business. In fact, it ranked 27th out of 190 countries in the World Bank’s Ease of Doing Business Survey in 2019.
Most people who freelance in Austria are independent contractors or new self-employed individuals. These categories are not members of the WKO, or Austrian Economic Chambers. Therefore, they don’t have to pay a membership fee.
However, they’re not protected by Austrian employment laws. In other words, freelancers in Austria don’t have a right to paid time off, parental leave, regulations on working time or sick days.
If you’re a legal resident, registering to work as a freelancer in Austria is fairly simple. You can begin working as a freelancer before registering. Registration lets the appropriate authorities know that you have begun working freelance in Austria. You’ll need to register with the Austrian Tax Office and the Austrian Insurance Institution for Self-Employed.
It is your obligation to register within four weeks of initiating freelancing activities in the country. However, you probably shouldn’t wait until the last minute. The process involves multiple steps and can take some time.
You can start by visiting the WKO. The representatives there can answer questions about whether you need a license and steer you in the right direction.
If you are applying for a free business license, start by going to the Austrian Business License Information System, or GISA. You can skip this step if you’re an independent contractor or new self-employed person.
Next, go to the Tax Office website. This will be the first step for new self-employed individuals or independent contractors. It’s the second step for those with a free business license. Fill out the required information. You’ll receive a login, password and PIN number by mail within 10 business days.
At this time, you can return to the tax office website, known as FinanzOnline, and request a tax number. You’ll need to enter your estimated revenue for the year. Based on the information that you provide, the tax office will mail you a tax ID number within 5 to 10 business days. If you don’t hear from them within that period, contact your local tax office.
When you receive your login for FinanzOnline, you can request a mobile signature through the same website. This allows you to sign other official documents that you’ll need for your registration more easily. You can find out more about a mobile phone signature here.
Finally, you’ll need to register with Social Security for the Self-Employed, or SVS, within 30 days of beginning your business operations. You can do this online or at a district administrative office.
Most people who freelance in Austria only have to pay taxes if the annual income from their business is greater than €11,000. However, there are some exceptions. You can check the particulars for your business by logging into your FinanzOnline account. It will tell you whether you are required to submit a tax declaration. If a tax declaration is required, you must submit it by the end of June unless you’re working with a professional tax advisor.
When declaring your income, you can deduct business-related expenses, such as office supplies, rental of office space, liability insurance, SVS, travel costs, training fees and technology. You’ll have one month to pay the income tax after you receive the tax assessment. In most cases, the tax office sends out statements quarterly, and you’re required to pay estimated taxes based on those assessments.
Income tax is based on your total profits. Depending on your income from your freelance services, expect to pay between 25% and 50% in taxes.
Value-added tax, or VAT, is an additional tax expense, which is different from income tax. Not every freelancer has to pay VAT. Small businesses must only pay if their annual revenue is greater than €35,000.00. Certain sectors, such as health and banking services, don’t have to pay VAT. The standard VAT rate is 20% in Austria. This Xolo guide provides you with all of the information that you need to pay and register for VAT in Austria.
Keeping track of your contracts, expenses, taxes and VAT can be complicated if you don’t have a comprehensive invoicing solution. Xolo Go lets you customize your invoices while following the legal guidelines for the country in which you work. It calculates VAT automatically and allows you to work in multiple currencies.
You should create a separate business bank account to organize your freelance income. Xolo Go offers a business bank account so that you don’t have to open a separate one. You can quickly withdraw funds from this account and access them from your personal bank account.
Starting a business can be stressful. You don’t want to focus on the business setup; you want to concentrate on your passion. One of the easiest ways to open a EU fully-remote business as a freelancer in Austria is by using Xolo Leap. Xolo Leap allows you to establish an Estonian one-person business from anywhere in the world. We'll help you register your business, handle the tax returns and help you with managing your legal and admin side by providing you with the innovative tool stack as well as help from our legal & compliance professionals.
Here are some benefits of starting and running an e-resident company:
It’s not difficult to work as a freelancer in Austria, especially if you have support along the way. With Xolo Leap and Xolo Go, you have the support that you need. We free you up so that you can focus on getting clients, doing a great job and getting paid. Get started as a freelancer or open your dream EU business with us.