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The decision for the company location

After starting my business in Switzerland, more and more reasons prompted me to move my seat to Austria. Since July 2017 I officially operate out of Vienna.

Shortly after I started to build my jeans business, I wondered about the location of the company. At the beginning of 2017, I had founded a sole proprietorship at my place of residence in Switzerland in order to settle my investments. But I worked closely with my designer in Vienna. So most of the development work was done in Vienna. That’s why I asked myself if Switzerland is the right company location for me.

When I analyzed the environment and the relevant business processes for me, it became increasingly clear to me that Vienna has many advantages: import and export within the EU, the general cost level and the subsidies offered by the Austrian state to small businesses. In addition, I was already familiar with the city, commuted there regularly and had a private room in a shared flat.

Sales across the borders

Austria or Switzerland are simply too small to sell nationally. That’s why it was clear to me early on that I had to design my sales across borders. I set myself the goal of opening up the German-speaking market first. This requires cross-border trade, which means that import and export are central business processes for me.

Although Switzerland is a member of the European Economic Area, there are still customs clearances. Although free trade agreements exist, the administrative burden of customs clearance is considerable. Within the EU, trade is duty-free and uncomplicated.

Cost differences of 50% and more

An even more important issue is the cost level. Since it does not matter to me where I run my office and warehouse, if I want to do cross-border trading, I can choose the business location based on the cost level. I noticed that most services in Austria are much cheaper than in Switzerland, such as transport, rents, salaries or the purchase of goods.

Preisniveaus Schweiz versus Österreich

Prices for consumer goods and services; consumer prices level 2016 according to Eurostat (EU = 100%)

For example, the shipping of goods for Austrian companies costs more than half less than for Swiss companies, and this with the same provider! For example, I had a contract with DHL in Switzerland and had goods delivered from abroad. A price comparison revealed that as a Swiss company, I pay more than 70% more than if I were an Austrian company. And this for identical services: DHL has the same expenses for a delivery from A to B, but charged Swiss companies 70% more – a joke!

Economic subsidies in Austria

One can be divided on the political systems in different countries. Each system has its advantages and disadvantages and depends on whether one values freedom or security more highly. I am a friend of liberal systems, which, in contrast to highly regulated systems, are usually more efficient and more business-friendly. The Austrian state is not necessarily one of the most business-friendly states, with a government ratio of over 50%. Bureaucracy, regulation and redistribution are financed through tax rates of 50% and more.

Corporate tax is also relatively high at 25%. But everything has an upside: In Austria there is a culture of support, which is second to none. This is very beneficial for young companies. In addition, in recent years great progress has been made in simplifying processes and reducing costs for business start-ups.

My love for Vienna

Despite critical points, there are many positives in Austria, for example the very high quality of life and the rather more open society compared to Switzerland. It is no surprise that Vienna is generally ranked first or second in the ranking of the most liveable cities. This depends on many factors, including a good infrastructure, good educational institutions and a diverse cultural offer, to name just a few examples. That’s why I found my love for Vienna in recent years.

Monocle Städte Ranking 2015

Ranking of 2015 for the most livable cities by the English magazine Monocle

For all the above reasons, I decided to relocate my company to Austria. That’s why I founded a company in Vienna in the summer of 2017 and began to transfer more and more activities. I got acquainted with the Austrian Federal Economic Chamber, which does a good job and offers many services for companies.

 

Cover picture: Wikipedia, View from St. Stephen’s Cathedral to the city of Vienna

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