Quizgecko2.docx

Who needs a trade licence? Opening a business in Austria Starting a business in Austria requires that all necessary permits are granted. For starting a trade (Gewerbe), including a craft, the most relevant legal instrument is the Trade Act 1994 (Gewerbeordnung 1994, GewO). This instrument applies to...

Who needs a trade licence? Opening a business in Austria Starting a business in Austria requires that all necessary permits are granted. For starting a trade (Gewerbe), including a craft, the most relevant legal instrument is the Trade Act 1994 (Gewerbeordnung 1994, GewO). This instrument applies to any economic activity that is • self-employed; • at least potentially conducted on a regular or continuous basis or at a larger scale; and • for profit. A range of economic activities that would, as such, satisfy the above criteria are nevertheless excluded from all or most of the requirements of the Trade Act 1994. Some of these economic activities are wholly or largely exempt because the legislator felt there was no need for regulation, e.g. agriculture and forestry, the arts, and household activities (such as self-employed cleaning or babysitting) or other very simple activities. Other economic activities are not governed by the Trade Act 1994 because they are subject to more specific (and usually stricter) requirements under other laws. This applies, e.g., for the regulated liberal professions (such as doctors, attorneys-at-law, notaries or tax advisors). Trade regulation law is part of special administrative law (Besonderes Verwaltungsrecht), together with a wide range of other areas, such as asylum law, planning and building law, energy law, waste management law and genetic engineering law, to name but a few. Since trade regulation law deals with economic activities it is specifically considered to be part of ‘economic administrative law’ (Wirtschaftsverwaltungsrecht). In contrast, general administrative law (Allgemeines Verwaltungsrecht) deals with cross-cutting issues, such as the structure and competence of administrative authorities, administrative procedure, or remedies against administrative decisions. Together, they form the body of administrative law, which is part of the wider area of public law (Öffentliches Recht). E-commerce businesses targeting Austria from EU and EEA countries Selma is wondering why she needs a trade licence in Austria while Matteo, who has been operating his online shop from Rome for some time and makes good money with Austrian professional customers, is only registered in Italy. Traders established in other EU Member States may, without any restrictions, sell goods or provide services into Austria from abroad. This is based on the very cornerstones of the European Single Market, the ‘Four Freedoms’, as laid down in the Treaties. The same rules apply for the Member States of the EEA and, due to bilateral agreements, for Switzerland (see p. 4). You will study administrative law in BA CM 13 (Public Law). Some aspects of economic administrative law will be dealt with in BA CM 11 (Business Law). 10 Starting an E-Commerce Business in Austria These Freedoms are • Free movement of goods • Free movement of capital • Freedom to establish and provide services • Free movement of persons The free movement of goods implies, inter alia, a prohibition between Member States of customs duties on imports and exports with regard to products originating in Member States and to products coming from third countries which are in free circulation in Member States, as well as of all charges and other measures having equivalent effect (Article 28 TFEU). The freedom of establishment includes the right to take up and pursue activities on a permanent basis as self-employed persons and to set up and manage undertakings in another Member State (Article 49 TFEU), whereas the freedom to provide services means the right to offer and provide services in other Member States on a temporary basis while remaining in one’s country of origin (Article 56 TFEU). With the emergence of e-commerce, the delineations between these freedoms have become somewhat blurred because, for being an online retailer ‘in Austria’ on a permanent basis (i.e. targeting Austrian customers in a similar way as a shop established in Austria) one does not have to be physically present in Austria any more. A number of EU legal instruments address in a cross-cutting manner the phenomenon of the ‘Digital Single Market’. E-commerce businesses targeting Austria from third countries Selma understands that Matteo from Italy may be a somewhat special case, but how can the parents of her friend Xu from China sell goods to Austria on a regular basis, through big online platforms, without having an Austrian trade licence? And what about John from the UK? Other third countries, such as China, may be associated with the EU and Austria through free trade agreements, notably the rules of the World Trade Organization (WTO), of which both Austria and China are member states. The three most important ‘pillars’ of WTO law are the General Agreement on Tariffs and Trade (GATT), the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The fundamental principles of the trading system include: • The Most Favoured Nation (MFN) rule, which requires a WTO member to grant the most favourable conditions under which it allows trade in a certain product type with one other WTO member to all other WTO members (in practice, this most importantly implies that customs duties must be levied on a non-discriminatory basis, but the establishment of specific free trade zones between particular WTO members, such as the EU, is still permissible). • The National Treatment rule, which means that foreign goods, once they have entered the WTO member’s market, should be treated no less favourably than domestically produced goods. A trader established in China is free to sell and deliver goods into Austria, but has to declare goods at customs and possibly pay customs duties (tariffs) and taxes (on which see p. 24) when the goods enter the EEA. Charging customs duties on import is considered to be compatible with the National Treatment rule. Starting a business – registration and permission requirements 11 The amount of customs duties due depend on the product type and can easily be identified with the help of the Access2Markets tool. Import of goods shipped in consignments with a value not exceeding EUR 150 (low value goods) is exempt from customs duties, but not from VAT (see p. 24). It is important to note that all goods imported from outside the EU/EEA must nevertheless comply with EU/EEA product safety standards. Strictly speaking, acting as a retailer is also a service, and the provision of services by traders established in other WTO members into Austria is governed by GATS and is much less liberal than the delivery of goods (e.g. a Chinese trader could not simply fly in from Beijing once a week, on the basis of their Chinese trade licence, and provide services in Austria). However, although e-commerce is not exactly a new phenomenon, the WTO is still struggling with how to deal with e-commerce. Already in 1998, there was a ‘Work programme on electronic commerce’, which included a moratorium in which WTO members agreed to continue the current practice of not imposing customs duties or other restrictions on electronic transmissions. This moratorium has been renewed several times so far. Since 2019, a ‘Joint StatementInitiative on E-Commerce’ is underway within the WTO, which a fair number of States have joined, but potential results are still not clear. When Selma asks her about this, Xu confirms that dealing with customs requirements has always been a major obstacle for her parents. Since recently, they have outsourced this to a provider of global parcel delivery services, which is working reasonably well. John, who has overheard the conversation, complains that Brexit has made things really complicated for him. Since the United Kingdom left the EU, relationships between the EU and UK are governed by WTO law and special international agreements, notably the Trade and Cooperation Agreement (TCA). As far as goods are concerned, the Title on trade in goods provides, inter alia, freedom of transit (i.e. traffic in transit to or from the territory of either EU or UK and any other third country) and prohibition of customs duties on all goods ‘originating in the other Party’, and in some other cases. It is, in particular, the requirement of ‘originating in’ that makes customs procedures necessary, and the rules on ‘origin’ are complicated. The Title on trade in services facilitates the cross-border provision of services, but provides for less liberal rules than the Title for goods. Other than current WTO law, the TCA provides for a separate Title on ‘Digital Trade’, which includes both trade in digital content or services (i.e. where the traded commodity is digital) and trade in traditional goods or services by digital means (i.e. e-commerce in the proper sense). However, the TCA has to use the WTO regime as a backbone, and this Title, while featuring a number of special provisions, largely qualifies digital trade as the supply of services. The relevant Title on services does not contain provisions that address e-commerce more specifically. 2.1.2. How to obtain a trade licence in Austria? Selma and Sebastian accept that they cannot just start selling stuff but have to get a trade licence first. They will have to file an application, accompanied by a range of documents, with the competent trade authority (Gewerbebehörde). Normally, this can also be done electronically using the Austrian Business Licence Information System (GISA). They just hope that this is not going to be too difficult. They are both of age, but Selma is from Bosnia and resident in Austria on the basis of her student visa, so she is worried whether there are any restrictions. 12 Starting an E-Commerce Business in Austria General requirements If an economic activity falls under the GewO, this may still mean very different things. The majority of trades is ‘free’ in the sense that no special certificate of qualification is required. The only requirement is the registration with the competent trade authority (Anmeldungsgewerbe). In order to register, a natural person has to fulfil the following requirements (cf. §§ 8 to 15 GewO): • Full legal age and capacity; • Citizenship of an EU Member State, or another Member State of the European Economic Area (EEA), or equivalent status under international law, or residence permit that includes selfemployed economic activities; and • No grounds for exclusion (on which see p. 13 further below). Full legal age and capacity is very rarely a problem. What is usually more problematic is whether the residence permit (Aufenthaltstitel) of a third-country national (i.e. a person who is not a citizen of an EU/EEA Member State) allows self-employed commercial activities. The most important provisions can be found in the Settlement and Residence Act (Niederlassungsund Aufenthaltsgesetz, NAG) and the Asylum Act 2005 (Asylgesetz 2005, AsylG), but there are also specific provisions for diplomats, employees of international organisations etc., and special visa for temporary activities under the Aliens Police Act (Fremdenpolizeigesetz, FPG). § 8 NAG lists 13 different types of residence permits, each of which has its own rules as to the permissibility of employment or self-employed activities. For employment, many types of residence permits require an additional employment permit (Beschäftigungsbewilligung) issued by the Public Employment Service Austria (Arbeitsmarktservice, AMS) under the Employment of Foreign Nationals Act (Ausländerbeschäftigungsgesetz, AuslBG). The most important categories of individuals addressed by the AsylG are: • Recognised refugees (Asylberechtigte, § 3 AsylG); • individuals with subsidiary protection status (subsidiär Schutzberechtigte, § 8 AsylG); • Asylum seekers (Asylwerber) enjoying de facto protection (§ 12 AsylG) and a temporary residence permit after the asylum procedure has been admitted (§ 13 AsylG); and • Individuals with a residence permit for exceptional circumstances (§§ 54 to 57 AsylG). Recognised refugees and individuals with subsidiary protection status may engage in the same economic activities as Austrian nationals. Asylum seekers whose asylum procedure is admitted and individuals with a residence permit for exceptional circumstances require an additional employment permit under the AuslBG for employed activities, but may pursue a self-employed economic activity. Selma holds a visa for third-country students (§ 64 NAG). If she were seeking employment, she would need a separate employment permit, which would normally be issued for employment not exceeding 20 hours/week because her work may not seriously impair her studies (no such permit would, by the way, be required if Selma sought employment in academic research and teaching, e.g. as a student assistant at Vienna University). There is no explicit restriction for self-employed traders but, of course, Selma must prove that she is actually and successfully pursuing her studies if she seeks an extension for her student visa. Specific requirements for regulated trades An enumerative list of trades (§ 94 GewO) are regulated trades (reglementierte Gewerbe), which require a specific qualification (§§ 16 et seq. GewO). Those among the regulated trades for which Asylum and migration law will be addressed in BA CM 6 (International Law) and CM 13 (Public Law) Starting a business – registration and permission requirements 13 the law requires particular ‘reliability’ are sometimes referred to as ‘reliability trades’ (Zuverlässigkeitsgewerbe, § 95 GewO). Regulated trades are a subset of the wider notion of ‘regulated professions’, which can, for EU/EEA Member States, be identified by way of a search in the EU Regulated Professions Database. Where a professional qualification has been obtained in another EU/EEA country (or Switzerland), there are, in general, three different types of recognition, depending on the type of profession concerned: • Recognition on the basis of coordination of minimum training conditions (e.g. for doctors) • Recognition of professional experience (e.g. for many crafts) • Recognition of an attestation of competence issued by the competent authorities of a Member State (for all other regulated professions) An attestation of competence does not preclude the host Member State from requiring the applicant to complete an adaptation period of up to three years or to take an aptitude test (Eignungsprüfung), e.g. if the training the applicant has received covers substantially different matters than those required in the host Member State. This applies, inter alia, for lawyers who have obtained their law degree in another Member State and wish to practice as attorneys in Austria. For professional qualifications obtained in third states there exist a wide range of bilateral and multilateral agreements on recognition. Practical guidance is provided by the Recognition Guide of the Austrian Integration Fund. Selma and Sebastian browse the list of regulated trades and note with a degree of relief that running an online shop and platform is not among them, but is a ‘free’ trade. They later learn that it is in fact an explicit requirement set out in the E-Commerce Act (E-Commerce-Gesetz, ECG) that no specific procedures are imposed. Nevertheless, they have to specify the type of trade in their application. They will primarily choose ‘Handelsgewerbe’. Depending on whether or not they plan to engage in further activities, such as working more extensively with customer data and providing digital services, including marketing services for third parties, they may also wish to add ‘Dienstleistungen in der automatischen Datenverarbeitung und Informationstechnik’ and/or ‘Ankündigungsunternehmen’. 2.1.3. Who is excluded from obtaining a trade licence? When filling in the relevant forms Selma and Sebastian have to tick a range of boxes concerning possible exclusion criteria, mentioning criminal convictions and something about insolvency. Suddenly, new worries emerge because of a criminal conviction for forgery of documents, which Sebastian committed as a 19-year-old high school student. Moreover, he became a partner in his father’s company when he was 18, and the company went insolvent during the Covid-19 crisis. There are exclusion criteria both for natural persons and for companies (§ 13 GewO). It is immaterial whether the facts giving rise to exclusion occurred in Austria or abroad. Where a natural person would be excluded, a company on whose operations that natural person has a significant influence is likewise excluded. In a similar vein, a natural person that had significant influence on the operations of a company that would be excluded is also excluded. Criminal convictions For natural persons, exclusion criteria are the final conviction by a court of an enumerative list of criminal offences (such as fraudulent withholding of employees’ social security contributions or organised undeclared work, for persons seeking a licence for the catering trade also drug crimes); or a final sentence for other criminal offences to more than three months imprisonment or to a fine of more than 180 daily rates, unless the crime has already been expunged. There is also a list of financial 14 Starting an E-Commerce Business in Austria offences that serve as exclusion criteria where the financial authority has imposed a fine of more than 726 EUR or imprisonment. Criminal law (Strafrecht) is an independent part of public law dealing with sanctions and other measures imposed by the State for qualified unlawful and culpable behaviour (including for cases where the offender is not criminally responsible due to insanity). Behaviour that is qualified as a crime must be clearly defined as such in the law. In Austria, criminal law can be divided into two main areas: judicial criminal law (Kriminalstrafrecht), and administrative criminal law (Verwaltungsstrafrecht). Criminal law normally addresses only natural persons, but companies can be prosecuted if a decision-maker or employee has committed a judicial crime that can be attributed to the company under the Corporate Criminal Liability Act (Verbandsverantwortlichkeitsgesetz, VbVG). Judicial criminal law is adjudicated exclusively by fully independent judges in the general (judicial) courts (ordentliche Gerichte), including by lay judges where so provided (e.g. murder, political offences). Jurisdiction in the first instance is either with the district courts (Bezirksgerichte, BG) or the regional courts (Landesgerichte, LG), depending on the severity of the offence. Regional courts also deal with appeals against decisions of district courts. Appeals against decisions of regional courts are dealt with partly by one of the four higher regional courts (Oberlandesgerichte, OLG) and partly by the Supreme Court (Oberster Gerichtshof, OGH), which is the highest instance of judicial courts in Austria. Crimes are mostly defined in the Criminal Code (Strafgesetzbuch, StGB), but may also be defined in other statutes. The main forms of punishment are fines (Geldstrafe) and imprisonment (Freiheitsstrafe), but there is also a range of further measures (e.g. confiscation, forfeiture) that can be imposed. Crimes are divided into felonies (Verbrechen) and misdemeanours (Vergehen), with felonies being defined as serious intentional crimes punishable by a maximum term of imprisonment of more than three years. Criminal convictions by courts, once they are final and can no longer be challenged by way of appeal, are entered into the criminal records (Strafregister). This concerns all convictions by Austrian courts and convictions by foreign courts where the convict is an Austrian citizen or has their domicile or habitual residence in Austria. After the lapse of a certain period of time, which is normally counted from the time when the sentence has been fully served or remitted, an entry in the criminal records is expunged. The length of that period (Tilgungsfrist) depends on the nature of the crime and the severity of the sentence imposed. Life-sentences and (at least in principle) sentences of over five years imposed for sexual crimes cannot be expunged from the criminal records. Administrative criminal law is applied by administrative authorities. Since 2014, appeals are, however, dealt with by administrative courts (Verwaltungsgerichte) and not by the administration itself. Administrative authorities in charge of the prosecution of administrative offences may also impose both fines and imprisonment (generally limited to a maximum period of six weeks), but the sentences are not entered into the criminal records. While administrative offences are listed in a broad range of different statutes, cross-cutting issues are addressed in the Administrative Offence Act (Verwaltungsstrafgesetz 1991, VStG). To a large extent, it is within the discretion of the Austrian legislator whether a particular offence is qualified as a crime under judicial criminal law or under administrative criminal law. Normally, the more serious offences with rather high maximum punishment will be classified as crimes under judicial criminal law. However, administrative offences, such as under cartel law or data protection law, can also trigger fines of several million Euros. Sebastian is relieved - forgery of documents is not among the crimes that would disqualify him from starting a business in Austria, and he was only sentenced to a fine of 15 daily rates. But what about that insolvency? Starting a business – registration and permission requirements 15 Insolvency law For companies, there is also the exclusion criterion of a denial of the opening of insolvency proceedings for want of sufficient assets, unless the period during which insolvencies are listed in the insolvency registry has lapsed. In Austria, there are several different types of insolvency proceedings, in particular different types of restructuring proceedings (Sanierungsverfahren, Restrukturierungsverfahren), which aim at the rescue of a company, as well as bankruptcy proceedings (Konkursverfahren), which head directly towards the winding up of the company and the sale of remaining assets or, in many cases, the sale of the business as a whole. There are also special proceedings for natural persons, so-called ‘private insolvency’ proceedings (Privatinsolvenz), which are available to both traders and consumers. Insolvency proceedings are opened where the debtor is in a state of being unable to pay the debts (Zahlungsunfähigkeit) or, in the case of certain companies, of over-indebtedness (Überschuldung). Since July 2021, also preventive restructuring proceedings in a situation where insolvency is likely are possible. A petition for insolvency proceedings can be filed by the debtor or any creditor, but the debtor is obliged to initiate proceedings within 60 days at the latest (failure to do so may amount to a crime or result in personal liability). The petition is entered into the insolvency register (Insolvenzdatei). When bankruptcy proceedings are opened, an insolvency practitioner (receiver) is appointed to take over the administration of the estate. In restructuring proceedings and ‘private insolvency’ proceedings, the debtor may perform the administration of the estate themselves under the supervision of the court and a special administrator. Creditors must file their claims, which are normally converted into monetary claims irrespective of their nature. Unsecured creditors, i.e. creditors that cannot rely on security interests such as a pledge or a mortgage, must be treated equally (with very few exceptions) and will receive an equal quota of their claims, whether after restructuring and partial discharge of residual debt or after sale of the debtor’s assets. However, proceedings are opened only where there are sufficient assets to cover the likely costs of the proceedings or where the applicant or the officers or shareholders of an insolvent company make an advance payment to cover these costs. If there are no sufficient assets left and the officers or shareholders are not able to pay the amount of up to EUR 4,000 required for opening proceedings, the court will refuse to open proceedings, which means that the debtor will lose their trade license and will not be granted a new license before the entry in the register has been expunged. The latter is normally the case after three years. While this applies to companies, there are some significant differences that apply to natural persons and private insolvency proceedings. Inter alia, proceedings are cheaper, and it is possible to obtain debt discharge after a certain period even against the will of the creditors. The opening of insolvency proceedings does not affect a trade licence, and it would even be possible to register a new trade during proceedings.