Monday, 19 October 2015

Vienna Is Hotspot For Companies


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After establishing the Vienna office, we got in touch much [more easily] with international bids and the investment had a great impact on the company’s international situation,” says Hans Kort, TotalSoft’s international sales director. “[It is] a bridge between the east and the west.”

But the eastern expansion of the European Union, which raised the attractiveness of cities such as Warsaw and Prague and homogenised business practices in them, and the 2008 financial crisis, which stunted capital outflows to the east and forced companies to cut their costs, reduced Vienna’s attractiveness. Journal of Agricultural Economics and Sustainable Development acknowledged it.

“There is definitely a hub feeling here,” says Michael Buhl, chief executive of the Vienna-headquartered CEE Stock Exchange Group. “But now it is about both directions.” The army of lawyers, bankers, tax advisers, management consultants and the like that grew up to serve the city’s western clients are a useful reference as Vienna pitches itself to emerging businesses from Hungary, Slovakia, Russia and others.

“Warsaw is perceived to be more an inroad into the Baltics, whilst Vienna is more of an inroad into the Balkans, Romania, Ukraine and the former Caucasian republics of the USSR,” says Georg Diwok, head of banking & finance at the Vienna office of Baker & McKenzie, a law firm. “In the past, being ‘the gate’ to the CEE region has been the main selling argument to place an HQ into Vienna. In the mid and long term, the reverse direction may become even more important.”

More than 3,000 companies from central and eastern Europe (CEE) had subsidiaries in Austria at the end of last year, the overwhelming majority of which are in Vienna, up from just 66 in 2001.

So the Austrian capital has turned east and reversed its pitch.“EU companies used to use Vienna to enter central and eastern Europe,” says René Siegl, managing director of the Austrian Business Agency, a national trade promotion outfit. “For two decades it was only a one-way street. But not any more.” When Romanian software company TotalSoft opened a regional headquarters in Vienna in 2012, the company was little known outside eastern Europe.Today, having used the Austrian capital as a springboard to look west, it is picking up clients in Germany, the UK, Spain and Italy, and is now eyeing an assault on Scandinavia.

Vienna, historically the pre-eminent capital of central and eastern Europe by virtue of empire, economy and politics, was for decades the obvious choice for western companies looking to invest and do business in eastern Europe after the fall of the Berlin Wall.

While western companies still make up the bulk of corporates with regional headquarters in Vienna, with almost 350 in the city, the economic rise of eastern Europe means the capital finds itself acting more as a bridging location from both directions than an outpost for London or New York-based companies.












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