While in most countries to start your business and/or freelancing you mostly need to carry the necessary registrations with regard to the legal form you have chosen, in Austria, there is an additional step you have to take (shocking, I know!) – obtain a business license for the business activity you will be conducting. And since delivering a service or a product requires many different big and small actions, it may be, that not all of them fall within the scope of one business license, but more.
For example, web designers often include services usually performed by graphic designers to their clients. Graphic designers can advise on brand message and strategy, which when done as a main activity, requires a business license for marketing services (Werbeagentur).
Moreover, almost everything and anything requires a business license in Austria. Even helping someone’s well-being through reading their aura or consideration of planet constellations and lunar energy requires a business license. So does cemetery gardening. Yes, really.
So, if you are among these skilled professionals who offer a wide range of services, should you obtain a business license for each service you provide?
The legal professional in me is itching to answer the question with the clients’ favorite “It depends” but I will let the business consultant take this one and say instead “No, you don’t, unless…”. Sneaky, I know.
Before I tell you “Unless what??”, let me briefly explain when one needs a business license and which types of licenses exist (you didn’t really think there is only one type of business license in Austria, did you?).
Not everything you do commercially requires a license, but most things do. Each year, the list of business licenses is updated. If what you do is on the list, you must obtain the license.
“Can anyone get a business license?”, you might ask. Generally, yes. If you are at least 18 years of age, have a main residency either in Austria or in another EU-member state, and are a citizen of either EU-member state, Norway, Lichtenstein, or Switzerland. If you are a third-country citizen, residing in Austria, you have to have a residence permit that allows you free access to the labor market.
Here is the place to mention that meeting these requirements is enough to obtain only one of the types of business license – the free business license (Freie Gewerbe). Currently, there are over 300 on the list. Except for the above-mentioned ones, you can also find there the licenses for a professional photographer, IT, market researcher, data analyst, calligraphy, cleaning of sewers, stone crusher, language-related services (but not teaching a language and tutoring, for example), etc.
For a business license to be free, it means that anyone can obtain it, because no specific qualifications and education are required for exercising this commercial activity.
Contrary to that, the qualified business licenses (Reglamentierte Gewerbe) are strictly regulated, and obtaining one requires a very specific set of knowledge, acquired either by having a particular education and/or working experience that fit the Austrian legal framework for that profession. Typical examples are the licenses for business consulting, electricians, architects, gardeners, hair stylists, make-up stylists, travel agents, carpenters, etc.
Here comes the “unless what?” finally. By obtaining a business license (of either kind), you are allowed to perform subsidiary services. You do not need to obtain a license for these services if the revenue from them does not exceed 30% of your yearly turnover. Mind though, that the subsidiary services should be related to your main services, and that relationship should make economic sense. You can’t, for example, offer IT services and claim house painting as subsidiary services. If you are doing both, you have to obtain a business license for each of them.
If the subsidiary services fall within the scope of a qualified business license, the time you spend performing them or the revenue you get from them should not exceed 15% of the time/revenue for each individual contract. For example, if you are a marketer and helping a client create their marketing strategy, some of the work might fall under business consulting. And some, in this case, will mean no more than 15% of it.
You might be wondering when does it really matter if I am complying with the regulation or not?
Well, when the subsidiary services are part of a qualified business license for one. Especially, if you don’t meet the legal requirements for obtaining that particular license and you are overstepping.
Furthermore, if you run the type of business that is required to have a specific place of operation (for example, storage service) and you are doing the subsidiary service outside of your registered place of business.
But also, it will matter to the Chamber of commerce, whose member you mandatorily become as a business license owner. In fact, you owe an annual membership fee for each license you have. These fees vary from one industry to another.
To avoid any risk of registering the wrong business license, I always ask my clients to give me a detailed list of all the tasks performing the service they want to offer include. That way, I can identify potential overlapping of licenses and can inform my clients to watch for it. Besides, your business is never the thing you thought it would be before you started. Our services evolve with time, so make sure that once in a while you are checking in with your trusted consultant.
If you are wondering whether you have the right business license for you, I can help! Drop me a line at email@example.com and request a consultation with me.