It covers payment methods and information on, banking systems, foreign exchange controls, and U.S. and correspondent banking.
Methods of Payment
It is common practice in Austria to require either payment in advance (at least partial), or certified and irrevocable letters of credit for initial transactions. Due diligence information is readily available for most companies, greatly reducing the risk of non-payment. Once the relationship with a customer is established, open account and extended terms will be expected. As Austria is an advanced industrialized nation, programs offered by the U.S. government and multinational institutions designed to reduce the risk of trading with developing countries do not apply here. A bilateral arbitration agreement exists and can be included in contracts. In Austria, the common business practice is to allow 30 to 60 days for payment. Early payments (within 14 days) are usually credited with a discount of 3 to 6%, depending on the industry. Supplier credits are common.
For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.
Austria is a member of the European Monetary Union and uses the euro as its only legal tender. The Austrian banking system is well developed, with worldwide correspondent relations, as well as offices and branches in the United States and other major financial centers. Austrian banks also have significant networks in Central, Eastern, and Southeastern Europe, as well as Russia and former Soviet Union countries. U.S. financial institutions operating in Austria include American Express, Citibank, and Western Union.
Austrian banks offer a wide range of credit and financial instruments. General financing to establish foreign operations in Austria is readily available. Foreign firms enjoy access to Austrian credit and capital markets without restriction. Austrian banks with global operations regularly work with larger U.S. corporations; however, smaller U.S. entities often have trouble conducting banking activities since many local banks are hesitant to serve clients from the United States due to strict reporting requirements, including those required under the U.S. government requirements including the Foreign Account Tax Compliance Act (FATCA).
Austria is part of the EU’s Single Supervisory Mechanism (SSM), Single Resolution Mechanism (SRM) and Deposit Guarantee Scheme (DGS). Currently, seven Austrian banks fall under the SSM and are therefore jointly managed by the ECB and national supervisory bodies. The SRM complements the SSM in cases of likely bank failure, ensuring an orderly resolution with minimal costs to taxpayers and the economy through setting up and executing resolution plans. The DGS guarantees that depositors will be reimbursed up to EUR 100,000 in case of bank failure and is aimed at ensuring financial stability by preventing panic withdrawals.
Foreign Exchange Controls: Austria has a fully liberalized foreign exchange regime.
U.S. Banks and Local Correspondent Banks
Branches/Subsidiaries of U.S. Banks in Austria
American Express Bank Ltd. TRS
Citibank Europe plc, Austria Branch
Western Union International Bank
Austrian banks with Branches/Subsidiaries in the U.S.
Raiffeisen Bank International
Bank Austria (UniCredit)
To access Austria’s ICS section on financing, visit the U.S. Department of State Investment Climate Statement website.