Austria's Flexible Company (Flexible Kapitalgesellschaft / FlexCo), live since 1 January 2024, sits between the GmbH and the stock corporation. Its defining feature is a new share class — Unternehmenswert-Anteile — designed to put equity in the hands of employees, paired with a start-up-friendly tax regime. This guide explains how both work, and when a FlexCo beats a GmbH.
A FlexCo keeps the familiar limited-liability shell and the €10,000 capital floor, but adds mechanics that a conventional GmbH lacks: a dedicated employee-share class without voting rights, easier share transfers, authorised and conditional capital, and the ability to hold its own shares. Choose it when equity incentives, investor rounds or option-style participation are central to the plan — not merely because the name sounds modern.
The Flexible Kapitalgesellschaft — marketed as the FlexCo (and abbreviated FlexKapG) — entered Austrian law through the Flexible Companies Act, which the National Council passed in December 2023 and which applies from 1 January 2024. It was created to answer a specific complaint: that the traditional GmbH is rigid for companies that need to raise venture capital in stages and reward employees with equity, while the stock corporation (AG) is too heavy and expensive for most early-stage businesses.
Legally, the FlexCo borrows the GmbH framework as its default and layers selected stock-corporation tools on top. Unless the Flexible Companies Act provides otherwise, GmbH law applies. The result is a limited-liability company whose shareholders are protected behind the entity, but with far more freedom in how shares are structured, issued, transferred and used as incentives.
GmbH for stability and recognition; AG for listing and large-scale capital markets; FlexCo for a growth company that wants venture funding and an employee equity pool without the AG's overhead.
The three forms share limited liability and a corporate-tax footing, but they diverge on capital, share mechanics and administration. The table below is an orientation, not a legal determination — the right form depends on funding plans, investor expectations and governance needs.
The two lines that matter most for founders are the employee-equity class and the lighter transfer formality: together they make it realistic to run an option-style pool and to admit investors without a full notarial act for every movement of shares.
A FlexCo is formed with statutory capital of €10,000, of which at least €5,000 is generally paid in cash before registration — identical to the modern GmbH. The flexibility is in the shares themselves. The minimum contribution attributable to a single share can be as low as €1, against €70 for a GmbH, which makes fine-grained cap tables and small employee allocations practical rather than awkward.
Share transfers and subscription commitments no longer always require the full Notariatsakt that a GmbH demands. A FlexCo can transfer shares through a deed drawn up by a notary or an attorney, a materially lighter and usually cheaper route. That single change removes a recurring friction point in financing rounds and secondary transfers, where a GmbH forces every shareholder movement through a notary.
"More flexible" does not mean "informal". A FlexCo keeps double-entry bookkeeping, annual financial statements, beneficial-owner reporting (WiEReG) and corporate-tax compliance. The flexibility is structural — in how equity is built and moved — not a reduction in ongoing obligations.
The FlexCo's signature instrument is the Unternehmenswert-Anteil (UWA), literally a "company-value share". It is a class of participation designed to give the holder an economic stake — a share in profits and in the proceeds of a sale or liquidation — while deliberately withholding the governance rights that come with ordinary shares. In practice it lets a founder build an employee equity pool that behaves like economic ownership without diluting voting control.
The 25% ceiling and the management-kept register are what make the UWA practical: founders can issue equity to a sizeable team without cluttering the commercial register or losing control of shareholder votes. For companies that previously improvised with phantom shares or opaque bonus promises, it is a cleaner, genuinely equity-based alternative.
Granting equity to employees has always carried a tax trap: the moment shares are received, their value can be treated as taxable salary, so the employee owes tax in cash on paper gains they cannot yet sell. The Start-Up Promotion Act, in force alongside the FlexCo from 2024, introduced a dedicated regime to fix this for qualifying companies.
Two features do the work. First, deferral: tax is generally postponed until the shares are actually realised — typically a sale — rather than charged on grant. Second, a favourable split on the benefit when the conditions are met: broadly, 75% of the assessment base is taxed as other remuneration at the flat 27.5% rate and is exempt from non-wage labour costs, while the remaining 25% is taxed at the employee's ordinary wage-tax rate and bears non-wage labour costs.
Because a FlexCo's company-value shares fit this design naturally, the two reforms are usually discussed together. There is also a practical bonus for FlexCo structures: where the participation is held as company-value shares, a further deferral of the tax charge can apply when the employment relationship ends, rather than triggering tax on departure. The employer, however, carries responsibilities here — it must notify the tax authority of a later sale or the lifting of the transfer restriction, and it is liable for the income tax in this mechanism.
The thresholds, holding periods and the 75/25 split are precise and have moved between draft and enacted law. Treat the figures here as orientation and model the actual outcome with an Austrian tax adviser before you design the pool or issue a single share.
The sequence below is a simplified, illustrative path — not a template for any specific company. It shows where the corporate and tax decisions meet.
The critical insight is that the corporate design (the share class, the register, the restrictions) and the tax design (deferral, the opt-in, the thresholds) must be built together. A pool created without the tax conditions in mind can lose the deferral entirely.
Beyond employee equity, the FlexCo imports several financing features that a GmbH simply does not have, which is why investors often prefer it for a company expecting multiple rounds.
These are not cosmetic. Authorised and conditional capital in particular are the mechanisms that make staged venture financing and option programmes administratively feasible inside a limited-liability company, without the cost and formality of running an AG.
Many groups use both: a GmbH holding company at the top for stability, and a FlexCo at the operating-startup level where the team and the investors sit. The decision should follow the equity and funding plan, not the novelty of the form.
The incorporation mechanics track the GmbH: a notarial formation, capital payment, Firmenbuch registration, tax and beneficial-owner registration. What is added is the deliberate design of the share structure up front — which is far cheaper to get right at formation than to retrofit later.
Most problems are not the company form — they are pools designed without the tax conditions, or equity promised before the articles support it.
Shares granted without the written election and the consent-based restriction can lose the deferral regime.
Growing past the employee or revenue limits, or joining a group, can remove eligibility for new grants.
Promising more company-value shares than the statutory ceiling allows forces an awkward redesign later.
Treating company-value shares as if they carried votes creates disputes at the first contested resolution.
A stable, closely held company with no equity plan usually gains nothing over a plain GmbH.
The company carries notification and income-tax responsibilities on realisation — not an afterthought.
Flexible equity and participation — formation and structuring of Austria's newer company form.
Explore the service Formation guideShareholders, capital, notary, Firmenbuch, tax and banking for the standard form.
Read the guide TaxHow company profit is taxed before any distribution or equity realisation.
Read the articleSend the founder cap table, the intended employee pool, your funding plan and the target headcount and revenue. We map whether a FlexCo or a GmbH fits, and the corporate and tax workstreams needed to make the equity plan hold together.