Austria vs. Switzerland vs. Cyprus: Where Austrian Entrepreneurs Should Really Relocate To

Why Austrian Entrepreneurs Consider Emigrating

Before diving into the details for each country, let me clear up a common misconception:

It’s not just about taxes.

Of course, the tax burden in Austria is hefty. According to the Austrian Chamber of Commerce, entrepreneurs quickly pay between 42% and 50% of their profits to the state. That hurts—especially when you see what other countries offer.

The Austrian Tax Burden in Detail

Let’s take a look at the facts. As an Austrian entrepreneur, these are the tax rates you face:

• Corporate tax: 25% on profits
• Personal income tax: Up to 50% (from €90,000 annual income)
• Social security: Around 28% for the self-employed
• VAT: 20% standard, 10% reduced

That means: With a profit of €100,000, you’re often left with just €50,000 or less. And if you employ staff, high non-wage labor costs pile on top.

But There Are Other Reasons Too

What frustrates my clients most:

• Bureaucracy: Endless paperwork and complicated procedures
• Regulation: Strict requirements for many business models
• Mentality: That’s how we’ve always done it slows down innovation
• Costs: High wages and rents cut into margins

Still, Austria has its advantages: Excellent infrastructure, a functioning social system, and great quality of life. So, don’t be too hasty in considering leaving the country.

But if you’re already thinking about alternatives, let’s check out the top three options now.

Switzerland: The Obvious Classic Choice for Austrian Entrepreneurs

Switzerland is a classic destination for emigrants—culturally close, geographically convenient, economically strong. But is it really as attractive as everyone says?

Switzerland’s Tax Advantages

This is where it gets interesting. Switzerland has a federal tax system, meaning that taxes vary by canton. There are also special tax models for foreigners.

In other words: In Zug, you’ll pay significantly less than in Austria. But be aware—living costs are higher.

The Reality of Daily Life in Switzerland

Let me be honest: Switzerland is expensive. Very expensive. A simple lunch sets you back 25–30 Swiss francs. A three-room apartment in Zug? At least 2,500 francs per month.

Here’s what you get in return:

• Political stability: Switzerland stands firm in turbulent times
• Infrastructure: Everything works flawlessly
• Legal certainty: Contracts are honored
• International networks: Home to many global companies

Residence and Work Permits

As an EU citizen, you have some advantages, but immigration is far from trivial. You need:

1. Proof of financial means: At least 100,000 francs
2. Business plan: Detailed outline of your activities
3. Local address: No permit without a residence
4. Language skills: Depending on canton: German, French, or Italian

And: The Swiss are polite but reserved. Integration generally takes longer than elsewhere.

Who Switzerland Is Right For

Switzerland is a perfect fit if you:

• Generate high profits (minimum €500,000 annual turnover)
• Value stability and security
• Enjoy the mountains
• Operate international businesses
• Are prepared to accept higher living expenses

But a word of warning: If your calculation is tight, Switzerland can be more expensive than Austria. Do the math carefully beforehand.

Cyprus: The EU Insider Tip with a Mediterranean Flair

Cyprus surprises many. The Mediterranean island is more than just a holiday paradise—it’s a serious business location, and with EU advantages to boot.

Cypriot Tax Benefits at a Glance

This is where it gets really interesting. Cyprus offers one of the lowest corporate taxes in the EU:

In other words: As a Cypriot entrepreneur, you pay a maximum of 12.5% corporate tax. Dividends are tax-free. That’s a big difference from Austria.

The Non-Dom Program for Entrepreneurs

Cyprus offers a special program for foreign entrepreneurs: Non-Domiciled Status. For 17 years, this exempts you from tax on capital gains and foreign dividends.

The requirements are manageable:

• Spend at least 60 days a year in Cyprus
• No other tax residence

Cyprus is also an EU member. Meaning: No trouble with double tax treaties or EU rules.

Living and Working in Cyprus

Forget the cliches of a pure beach destination. Cyprus has evolved into a modern business hub. Especially Nicosia and Limassol offer:

• Modern infrastructure: Fast internet, good transportation links
• International community: Many other European entrepreneurs
• English as the business language: A legacy of colonial history
• Year-round warm climate: Over 300 sunny days each year

Living costs are much lower than in Switzerland or Austria. You’ll find a nice 3-room apartment starting from €800–1,200 per month.

The Downside of Cyprus

But to be frank, not everything is perfect. The challenges:

• Limited infrastructure: No trains, few direct flights
• Smaller economy: Fewer local business opportunities
• Political division: Only the south is in the EU
• Summer heat: July/August can be unbearable
• Isolation: You’re far away from everything

Cyprus Is Ideal for Digital Entrepreneurs

Cyprus works especially well if you:

• Run an online-based business
• Serve international clients
• Love warm climates
• Want EU legal certainty
• Prioritize low taxes

It’s less suited for traditional manufacturing, but for consulting, software, e-commerce or online marketing? Perfect.

Austria Optimized: Modern Alternatives at Home

Before packing up, let’s talk honestly about the possibilities at home. Sometimes optimizing in Austria is the better move.

Austrian Tax Optimization for Entrepreneurs

Austria allows more leeway than most people think. The key tools:

• Private foundation: For large assets starting at €1 million
• Holding structures: Optimize group taxation
• Research credit: 14% of R&D costs reimbursed
• Group taxation: Balance profits and losses between companies
• Start-up benefits: Lower tax rates in early years

There are also regional grants. Carinthia, Salzburg, and Tyrol have dedicated programs for business start-ups.

New Possibilities Through Digitalization

Covid-19 changed a lot. Remote work is now standard—this opens up new opportunities:

• Residence in affordable regions: Burgenland instead of Vienna
• International clients: No physical presence required
• Digital bookkeeping: Less hassle, more transparency
• Cloud-based systems: Work from anywhere

Bottom line: You can enjoy Austria’s benefits without its drawbacks.

Why Staying in Austria Still Makes Sense

Don’t underestimate local advantages:

Modern Tax Planning Without Emigrating

Many of my clients optimize successfully without leaving the country. The strategy:

1. Analyze the business model: Where are the real profits generated?
2. Optimize structures: Holding, business expenses, provisions
3. Improve timing: Allocate profits and losses smartly
4. Use subsidies: Leverage every available program
5. International component: Outsource certain parts abroad

The result: You often save 20–30% in taxes, without moving.

Direct Comparison: Taxes, Costs, and Quality of Life

Let’s get specific. I’m comparing all three options by key criteria—so you get a clear overview of what’s possible where.

Tax Burden Comparison

Let’s take an Austrian entrepreneur with €200,000 annual profit. Here’s the tax breakdown:

The takeaway: Cyprus offers the biggest after-tax savings. Caution though—these are just taxes; total costs are another story.

Cost of Living in Detail

What does daily life really cost? Here are the monthly expenses for an upscale standard of living:

Also, remember to factor in travel costs. A flight from Cyprus to Vienna costs €200–400. That adds up quickly.

Business Environment and Networking

The business environment is key for entrepreneurs. Here’s the reality:

• Austria: Established networks, but conservative mentality
• Switzerland: International focus, but high entry barriers
• Cyprus: Growing expat community, but limited local markets

My tip: Start with a hybrid solution. Test the new country out before burning your bridges.

Legal and Practical Considerations

A lot of people overlook the practical hurdles of moving.

In short: Cyprus is practically easier; Switzerland is more complex legally.

Which Country Suits Which Entrepreneur Type?

After 15+ years of consulting, I see patterns. Not every solution fits every entrepreneur. Here’s my assessment—based on real experience.

The Family Business Owner

Profile: Married, children, local roots matter

Best option: Austria optimized

Why? Family and social environment are more important than maximum tax savings. Plus, Austria’s schools are great, and you won’t have to fly every few months.

The strategy:

• Set up a holding company
• Optimize business expenses
• Maximize subsidies
• Maybe relocate some parts abroad

Outcome: 20–30% tax savings without moving.

The Digital Nomad

Profile: Online business, flexible, few local ties

Best option: Cyprus

Perfect blend of low taxes, EU legal certainty, and great weather. The non-dom program is custom-made for digital entrepreneurs.

The advantages:

• 12.5% corporate tax
• No capital gains tax
• English as business language
• Low living costs
• Good internet infrastructure

The Major Investor

Profile: Wealth over €2 million, international operations

Best option: Switzerland

With larger sums, high living costs are offset by maximum stability and discretion.

Especially interesting:

• Lump-sum taxation possible
• Political stability
• Excellent private banks
• International networks
• High legal certainty

The Traditional SME Owner

Profile: Manufacturing, local clients, staff on-site

Best option: Austria with international component

A full relocation doesnt make sense. But parts (IP holding, sales) can be optimized.

The hybrid strategy:

• Production stays in Austria
• Intellectual property in Cyprus
• Sales via Swiss subsidiary
• Holding company coordinates it all

The Start-up Founder

Profile: Innovation, growth, international expansion plans

Best option: Flexible model

Start-ups need agility. Start in Austria, tap into grants, and restructure later on.

The step plan:

1. Phase 1: Begin in Austria leveraging maximum subsidies
2. Phase 2: Reconsider structure at €500,000 turnover
3. Phase 3: Go international from €2 million upwards

My Personal Tip

Whatever type you are: Don’t start with tax optimization. Start with your vision for your life.

Ask yourself:

• Where do I want to live in 10 years?
• What really matters to me?
• How much complexity can I handle?
• What risks am I willing to take?

Only then should we talk about taxes.

Practical Steps: How to Approach Emigration Strategically

Theory is great. But how do you put it into practice? Here’s your step-by-step plan for each of the three options.

The Switzerland Route: Step by Step

Phase 1: Preparation (3–6 months)

1. Select a canton: Compare Zug, Schwyz, or Zurich
2. Provide proof of funds: Show at least 100,000 CHF
3. Create a business plan: Detailed outline of your activities
4. Seek legal advice: Swiss corporate lawyer
5. Find accommodation: No permit without an address

Phase 2: Registration (1–3 months)

1. Apply for residence permit: B permit for EU citizens
2. Set up a company: GmbH or AG, as needed
3. Open a bank account: Swiss bank for business activities
4. Register for taxation: With cantonal tax office
5. Social insurance: Compulsory AHV registration

Phase 3: Optimization (ongoing)

• Tax planning with a local advisor
• Build your network
• Consider lump-sum taxation
• Set up international structures

The Cyprus Route: Practical Implementation

Phase 1: Setup (1–2 months)

1. Establish a company: Limited company possible online
2. Open a bank account: Straightforward with company certificate
3. Apply for non-dom status: At tax office in Nicosia
4. Rent an apartment: Preferably in Limassol or Nicosia
5. Find a tax advisor: German-speaking advisors available

Phase 2: Establish residency (3–6 months)

1. Fulfill 60-day rule: Document minimum stay
2. Surrender Austrian tax residence: Deregister at tax office
3. Start business activity: Establish substance in Cyprus
4. Local infrastructure: Office, internet, services
5. Optimize banking: International banking connections

Phase 3: Long-term planning

• Check IP holding structures
• Plan EU-wide expansion
• Prepare for non-dom extension
• Define exit strategies

The Austria Optimization Route

Immediate actions (1 month)

1. Switch tax advisors: Find a proactive consultant
2. Review expenditures: Exploit every possibility
3. Apply for grants: AWS, FFG, regional programs
4. Optimize bookkeeping: Implement digital solutions

Mid-term structure (3–6 months)

1. Assess holding structure: Implement if sensible
2. Add an international component: Outsource part of business
3. Bring forward investments: Utilize depreciation potential
4. Optimize pension planning: Take advantage of tax benefits

Avoiding Common Pitfalls

After 15 years’ experience, these mistakes waste time and money:

• Deciding too quickly: Allow at least 6 months for the process
• Focusing only on taxes: Total costs are what matter
• Neglecting substance: Without real business activity, you’re at risk
• Ignoring family: Partners and children must be included
• No exit strategy: What happens if the law changes?
• Underestimating legal risks: Observe CRS and EU rules

My Timing Tip

When is the best time for the move?

• Switzerland: Year-end (tax year = calendar year)
• Cyprus: Beginning of the year (easier planning)
• Austria optimization: Immediately (no waiting period needed)

But more important than timing is proper preparation. Better to plan for six months longer than pay for expensive mistakes later.

Frequently Asked Questions About Business Emigration

Can I, as an Austrian entrepreneur, just move to Cyprus?

As an EU citizen, you generally have the right to take up residence in Cyprus. To acquire non-dom status, however, you must prove you spend at least 60 days per year in Cyprus and have no other tax residence.

How high are the real living costs in Switzerland?

Living expenses in Switzerland are about 40–60% higher than in Austria. A three-room apartment in Zug costs at least 2,500 CHF/month, a simple lunch 25–30 CHF. Expect monthly costs of 6,000–8,000 CHF for an upscale lifestyle—much more than tax savings at lower incomes.

How much substance is required abroad?

Substance means genuine business activity on site: an office (can be rented), local employees or personal presence, business decisions being made there, and documented stays. Mailbox companies without substance have been outlawed under the EU Anti-Tax-Avoidance Directive—they can lead to back taxes.

What happens to my Austrian social security?

If you move to Switzerland: You must register with the Swiss social system (AHV). In Cyprus: As an EU citizen, your entitlements are portable, so you can choose between systems. In both cases, carefully review what it means for your pension before moving.

How does the Austrian tax office react to emigration?

The tax office examines closely whether the emigration is genuine or just cosmetic. Key: Proper deregistration, proof of new tax residence, and real substance in your destination country. Exit taxation can apply for large shareholdings. Seek professional advice before moving to avoid later complications.

Can I optimize from Austria without emigrating?

Yes—absolutely. Many of my clients save 20–30% taxes through holding structures, optimized business expenses, use of grants, and smart profit distribution. Combined with international components (IP holding in Cyprus, sales via Switzerland), significant optimizations are possible—no move required.

What are the risks of international tax structures?

Biggest risks are: legal changes in target countries, stricter substance requirements, CRS reporting between jurisdictions and potential back taxes in case of errors. EU rules can also change. Always plan an exit strategy and have your structure checked regularly.

How long does an emigration take to implement?

Switzerland: 6–12 months for full completion—authorities check thoroughly. Cyprus: 2–4 months—much simpler process. Austria optimization: 1–3 months depending on complexity. Always plan buffer time and never start under time pressure.

What does professional advice cost?

Switzerland setup: €15,000–25,000 for consultancy and company formation. Cyprus setup: €8,000–15,000 including company formation and non-dom application. Austria optimization: €3,000–8,000 depending on complexity. Invest in good advice—the cost usually pays for itself within a year from tax savings.

Can I change my structure later on?

Yes, but with effort and costs. So plan for flexibility from day one. Holding structures are easier to adapt than operating companies. In case of emigration, always define an exit strategy—for changes in your life or legal situation.

How do I find the right tax advisor abroad?

Look for advisors with experience in international structures and German-speaking clients. References are important. In Cyprus, there are many German-speaking advisors; in Switzerland, rely on local experts. Avoid advisors offering the same solution for everyone—good advice is always individualized.