Innovation Funding Incentives: Austria

Austria has cultivated a robust and comprehensive system of innovation funding incentives, designed to support businesses at every stage of their growth, from nascent startups to established enterprises engaged in cutting-edge research and development (R&D). These initiatives, primarily driven by the Austrian federal government and its promotional agencies, aim to foster technological advancement, enhance competitiveness, and create a thriving ecosystem for innovative companies. This report will detail the key funding mechanisms available, their objectives, and their collective impact on Austria’s innovation landscape.

Key Funding Incentives

1 | Research Premium (Forschungsprämie)

The Research Premium stands out as Austria’s most significant tax incentive for R&D. It is a highly competitive advantage that applies broadly to all companies regardless of size, sector, or corporate structure.

Mechanism: Companies can claim a research premium of 14% of their eligible R&D expenditures. This premium is a refundable tax credit, meaning it can be paid out in cash even if the company does not report a profit. There is no maximum financial limit on the total investment volume for the premium, although a maximum credit of €140,000 applies to subcontracted R&D . Eligible costs include personnel, materials, R&D investments, finance costs, and overheads for both in-house and contract research .

Impact: This incentive significantly lowers the effective cost of R&D, encouraging continuous investment in innovation and contributing to Austria’s high R&D/GDP ratio, which is among the highest in the EU.

2 | Austria Wirtschaftsservice (aws) Programmes

Austria Wirtschaftsservice (aws) is the federal promotional bank, offering a wide array of financial and non-financial support tailored to different stages of business development, with a strong focus on technology and innovation, particularly deep tech startups.

aws Preseed Deep Tech: This programme supports entrepreneurial pre-start-up and start-up projects based on applied R&D (typically at Technology Readiness Level 3). It provides a maximum funding of €267,000 per project, covering 80% of eligible costs for developing initial proof-of-concepts or prototypes. Target areas include digitalisation, ICT, physical science, green tech, quantum technology, and life science.

aws Seedfinancing Deep Tech: Designed for SMEs in their development phase (up to five years after establishment, around TRL 6), this programme helps ideas mature into market-ready products. It offers up to €889,000 per project, also at an 80% funding rate. Repayments are only required if there’s a positive earnings before tax (EBT) or sale of assets/shares, with no interest or collateral required.

Other aws Grants: These include “aws Creative Impact” (up to €200,000 for innovative products/services, covering 50-70% of costs), “aws Growth Investment” (€300,000 to €400,000 non-repayable grants for strengthening market position), and various loan guarantees and equity investments.

3 | Austrian Research Promotion Agency (FFG) Programmes

The FFG is the central contact point for application-focused research, development, and innovation projects in Austria, with over half of its project funding directed towards industrial research.

General Programme (Basisprogramm): This programme funds R&D projects regardless of the area (technology, materials, production, energy, environment, etc.), open to businesses of all sizes. It offers cash grants, interest-free loans, or government guarantees, with maximum grants up to €3 million.

FFG Impact Innovation: Specifically for SMEs, startups, and non-profits, this grant provides up to €75,000 (50% of project costs) to support the creation of new products, services, or processes over a maximum 12-month period.

FFG Start-up Funding (Startup-Förderung): Offers up to 70% of total project costs as a soft loan, with repayment commencing five years after project completion.

Thematic Programmes: FFG also manages thematic programmes aligned with national priorities, such as “Mobility of the Future” and “Production of the Future,” focusing on areas like autonomous driving and sustainable production processes.

4 | Regional and Other Initiatives

Beyond national programmes, various regional agencies, particularly the Vienna Business Agency, offer targeted funding and support.

Vienna Business Agency: Provides funding for companies and founders in Vienna, including “Startup Grants” (up to €8,000 per person for initial support), “Innovation Funding” (up to €300,000 for innovative products/technologies), and grants for digitalisation, sustainable solutions, and cultural/creative industries.

Austrian Science Fund (FWF): Primarily promotes basic research at universities and non-university institutions.

Venture Capital (VC) Landscape: While historically below the EU average, Austria’s VC landscape is growing, with a significant surge in investment activity and a notable increase in Series A funding in 2025. Organisations like aws Gründerfonds, Speedinvest, and 3VC are prominent players in the Austrian VC ecosystem.

Impact and Future Outlook

Austria’s comprehensive innovation funding landscape has fostered a vibrant startup ecosystem, particularly strong in deep tech, green tech, and life sciences. The combination of direct grants, preferential loans, and attractive tax incentives significantly reduces the financial risks associated with R&D, making Austria an appealing location for both domestic and international innovative companies.

The strong public sector support, evidenced by FFG funding for startups surpassing €100 million in 2023, is a key driver of this growth. Reforms like the introduction of the “Flexible Company” (FlexCo) legal form further ease company establishment. Continued emphasis on ethical and sustainable objectives, alongside strong academic-industry collaboration, positions Austria to further strengthen its position as a leading innovation hub in Europe.