Graz is located on the Mur River in the southeast of Austria, 200 kilometers southwest of Vienna. Covering an area of 127.57 km2 (49.26 sq mi), Graz has an estimated population of 294,630 with a density of 2,300/km2 (6,000/sq mi), making it the second-largest city in Austria after Vienna.
Graz is the capital of the federal state of Styria, the second-largest federal state in Austria bordering Slovenia and Hungary.
Graz is considered southeast Austria’s scientific, economic, and cultural center. The city has a long tradition as a university town with six universities and a student population of over 55,000. Graz is also renowned for its exceptionally well-preserved city center, designated a UNESCO World Heritage Site in 1999.
In 2023 the city will be named the European Capital of Culture and was home to numerous art galleries, museums, and theatres. Graz had the same function 20 years before, in 2003.
The Austrian Constitution gives each municipality the right to self-government and a right to levy taxes. Graz administration is governed by the City Council, a locally elected body comprising 56 members, who in turn elect the Mayor and nine members of the city government. The local authorities have wide-ranging responsibilities, including city planning and infrastructure provision.
Graz is the principal economic and industrial center of Styria and the third-largest in Austria. Statistics Austria reported the regional GDP in 2018 at €49.604 billion, fourth big contributor at the total of the Austrian GDP.
In the city of Graz, there are more than 14,500 businesses, predominantly small to medium-sized, and a strong trading and services sector.
Traditionally an industrial region, Styria has slowly shifted its economic focus towards technology-intensive industries. The region’s primary industries include paper, steel, electronics, motor vehicles, leather products, and wood. The city also has a flourishing food beverage industry producing meats, alcohol, bread, confectionery, and coffee roasting.
Graz’s industrial sector is the main economic driver and capital for the Austrian automotive industry. The city is home to several leading vehicle manufacturers and mass produces mechanical parts and entire vehicles.
Graz exports around 60% of its goods primarily to the European Union, United States, and China.
Graz also leads the way for environmental technology and renewable energy industry sectors, with over half of critical businesses based in the city. The regional revenue of this industry sector is estimated to be €3.8 billion, around 7.6% of the regional GDP.
Graz also has a dynamic creative industry generating an estimated gross value of 1.5 billion euros to the local economy. Many state-of-the-art enterprises have earned an international reputation, particularly in electronics, plastics, and environmental engineering.
As a critical junction between the middle and south Eastern Europe, Graz benefits from an excellent transport system. Neighboring large European cities can be reached by road in approximately five hours, and there are numerous road and train links connecting Graz with the rest of Austria.
The road network of Graz has a length of 1227 kilometers, and to reduce congestion and emissions, 802 kilometers thereof have a speed limit of 30km/per hr. The city focuses its attention on promoting walking, cycling, and the use of its extensive bus and tram network.
The tram system operates seven lines that serve the railway station and city center. The network stretches some 33 kilometers and forms the foundation of public transport, carrying over 53.56 million passengers per year.
More than 30 urban bus routes run throughout the city, connecting areas not reached by the tram network.
Graz is the hub for many national and international train connections. The central railway station in Graz is known as the Graz Hauptbahnhof and links passengers to most areas of Styria. Direct trains also run frequently to other major European cities, including Vienna, Salzburg, Innsbruck, Maribor, and Prague.
Graz’s largest airport is Flughafen Graz- Thalerhof, located 9.3 kilometers south of the city center. The airport handles domestic flights in and around Austria and international flights to a wide range of European destinations. Thalerhof moved over 199,510 (est. 2020) passengers and 6,833 tons of cargo (est. 2020).
According to the European Commission, Graz, as the regional economic center, is responsible for around 40% of jobs in Styria. Graz enjoys a large and highly skilled workforce primarily employed in the services sector. Other significant industries include manufacturing, automobile production, energy, and engineering.
The workforce is mainly homogenous, with the majority being Austrian citizens, 90% of whom speak German as their primary language.
Graz has become one of Austria’s principal research and learning centers, ensuring that employers in the city have access to an educated workforce. Internationally recognized as a university city, people from more than 140 nationalities have taken up residence in Graz to study. The city is home to four federal universities and 55,000 students, of whom around half attend the University of Graz.
The University of Graz was founded in 1585 and is Austria’s second-largest and oldest higher education institution. Internationally acclaimed, the university has welcomed many outstanding scientists, including six Nobel Prize winners. There is estimated a number of around 32.500 enrolled students.
Business Costs in Graz
Austria’s individual income tax rates work on a progressive scale of 0%-55%, with 7 tax brackets:
- Up to €11,000 0%
- €11,000 – €18,000 25%
- €18,000 – €31,000 35%
- €31,000 – €60,000 42%
- €60,000 – €90,000 48%
- €90,000 – €1,000,000 50%
- Over €1,000,000 55%
The Austrian corporate tax rate is 25%, making it an attractive place for companies and investors. Capital gains of companies were set at 25%, and corporations are also expected to pay municipal tax (non-profit related) and property tax.
The standard VAT rate in Austria is 20%, while some reduced VATs of 0%, 10%, 13%, and %20 can be applied to the tourism, food, and agriculture sectors.
Austria does not have an official minimum wage. Majority of the wage-earners in Austria are regulated by collective agreements which are negotiated by the social partnership. As per the current agreement, wage earners will earn at least 1500 € per month.