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Dear reader, in this article, we will discuss the best practices and necessary steps if you are wondering “is it possible?” or have firmly decided to buy, for example, a shopping center, supermarket, income property, or gas station in Austria or Germany. If you are looking for a successful investment in commercial real estate in a reliable EU country, planning to buy a hotel in the Austrian mountains, an income property, or an office center in Vienna, Frankfurt am Main, or other major cities of prestigious jurisdictions such as Austria or Germany, we are here to help.

Buying commercial real estate or a business, whether large, medium, or small, in Germany or Austria by citizens from CIS countries, such as Russia, Ukraine, Kazakhstan, Belarus, Moldova, Armenia, Uzbekistan, etc., requires a careful approach. Typically, buyers need high-quality specialists – brokers – who can help find a good investment property and provide high-level support for the transaction, including arranging financing from a bank for purchasing commercial real estate.

We will offer and find ready-made businesses in Vienna, other cities in Austria and Germany, such as Frankfurt am Main, Düsseldorf, Munich, which you can view, inspect, and buy with our assistance.

If you are planning to sell or firmly decided to “sell a business” or buy a ready-made business in Austria or Germany, we can also help you with this. Vienna, as well as Frankfurt and other major cities in Germany, are very attractive for those looking to buy an existing business. However, don’t overlook smaller cities as they often offer good investment opportunities as well. Small cities often have lower business prices and good profitability – an important factor if you are considering buying a business in smaller or medium-sized cities.

What to Consider When Buying Commercial Real Estate or How to Buy a Ready-Made Business (EU: Austria, Germany)

1. The buyer should have resolved the issue of money, specifically its legal presence in the EU countries. The longer and more substantial the funds have been in the EU, the more favorable banks will be regarding opening accounts and providing financing. The more and longer a client’s money is in EU banks, the higher the percentage of credit funds the client will receive as financing for a particular property.

   If you have questions like “what should a foreigner know about running a business abroad?”, “what kind of business to engage in?”, “how to start a business?”, “how to create a business plan for small, medium, or large business?”, “or maybe just do business with Germany from your own country?”, consider the following. Rental businesses in Germany for foreigners are almost the same as if owned by residents of that country, which is not the case in Austria, where authorities and banks are more cautious with non-residents and their money than with locals. Be prepared for thorough checks on the origin of your funds if it concerns Austria.

2. Before purchasing, for example, a hotel in Austria or Germany, it is advisable to open a company in the country where the desired property is located, as this will take some time. Opening such a company account usually takes the most time. This company will later be used to acquire the property you purchase in Austria or Germany. It is better to follow the formula: one real estate object equals one company. Why? Contact us – we will explain, but don’t overlook this fact.
3. It is important not to delude yourself with illusions of extraordinary profits and understand that highly developed European countries are primarily about stability and reliability. Therefore, the annual yield percentages for investment properties will not be as attractive as in developing countries that have not yet entered the EU. In major cities in Austria and Germany, the yield percentage for commercial real estate as of 2019 is around 4%-5%, and in Berlin, for example, it is good if it reaches 3%! In smaller cities, the percentage is higher – 7%-9% per year.
4. Pay attention to the number of lease agreements and their terms, options for extension, and early termination possibilities. If the property is good but the leases are ending, it’s important to understand whether tenants will want to extend or renegotiate the leases, and if so, for what terms? Can the seller arrange such extensions/renegotiations before selling the property or not?
5. Consider the number and quality of tenants! For example, a higher yield percentage may be achieved with a large number of small tenants. However, does this suit you, given that managing such a property will be more costly than if you had one major tenant – a large retail chain, renting 80%-90% of the space and paying rent on time? One or two lease agreements rather than 50-100, for example.
6. Consider alternative investment sources, such as biogas plants, which can offer higher yields than any other real estate. The latest biogas plant in Denmark, as of November 2019, yields around 23.80%, and the plant is managed by the consortium itself, with this rate fixed for 20 years. Guarantees: one of the largest consortia producing such plants, investing around 2.5 million euros of its own capital, and the Danish government, which commits to purchasing what the plant produces for 20 years at the specified rate, at a minimum.

All these processes, factors, and nuances are constantly monitored by our company’s specialists and partners, offering various options to our clients. We always check every detail before suggesting anything to a client. We do not sell or offer properties with issues. If a business requires additional financing, we indicate this in the description to avoid misleading our clients.

The purchase of enterprises (operating businesses) in Austria or Germany always precedes a stage of negotiations, inspections, and property evaluation. If necessary, at the buyer’s request and expense, by any individuals with the appropriate permissions.

Please understand that sometimes we ask to confirm the financial capacity of our client. This happens in several cases:

• At the client’s request, who does not want to waste time negotiating with unreliable intermediaries and prefers to work with and show the property to real clients;
• At our initiative, as we want to ensure that we are dealing with a genuine buyer and not with an unreliable intermediary who is hiding this and presenting themselves in a misleading light, aiming to approach the seller directly using a licensed broker as a “bank with properties,” which are easy to find.

When Choosing and Buying a Business in Germany or Austria, Don’t Overlook Such Properties as:

• factories, plants, metalworking enterprises, alternative energy objects,
• auto stores, dry cleaners (service industry business), car washes, gas stations,
• pizzerias, bakeries, cafes (small but profitable business), restaurants, hotels with restaurants – each of which can also be purchased.

Investments in Austria, Germany

(investment objects, land, business sales: Austria, Germany)

Special attention should be given to investments in Germany and Austria, specifically in objects such as: shopping centers, schools, kindergartens, nursing homes, and more. These objects can be built, put into operation, and managed or rented out, or even sold.

We have such ready-made investment objects, often with the necessary technical and regulatory documentation, as well as land available for construction. These objects are located in Vienna, other cities in Austria and Germany: in Salzburg and Berlin, as an option.

What Not to Do Before and During the Purchase of Real Estate/Business in Germany or Austria

1. Do not keep “money in a bag” (though it sounds funny, it happens often); it should be in accounts, preferably in the EU rather than in CIS countries. European banks are very cautious and distrustful of money from CIS countries. Recently, Austria has tightened controls and increased scrutiny on the origin of funds. While you are sorting out where your money should be, a good property may be sold, as sellers are not always willing to wait and cannot be sure of your success as a financier. Take care of this issue in advance. If necessary, we can help you do it correctly and legally.
2. Make sure to check everything yourself if possible, including reviewing the financial statements of the enterprise you are buying for the past three years, at the very least.
3. Check the validity of supply and sales contracts if it’s a manufacturing enterprise, and rental contracts if that’s the primary business, etc.
4. Ask, consult, and recheck with your trusted contacts and friends, but trust only facts and verified evidence that can always be checked and rechecked.
5. Before consulting friends and other trusted individuals, consider their experience and whether they have it at all in the area you are asking about. Are they specialists, and if so, how deep is their expertise? This is very important. We had a case where a buyer refused to invest in a biogas project based on the opinion of a partner living in Austria. However, biogas investments were good about ten years ago in that country, but now they are relevant in Germany, or better yet, in Denmark. We sell these objects more frequently now because they offer a very high yield percentage that is fixed for many years and guaranteed by a European government and one of the largest global manufacturers of such installations, which then manages them.

Bank Financing in Austria and Germany for Real Estate or How to Get a Loan in Austria or Germany?

How to obtain favorable financing terms? Is it worth hiring a separate specialist for this issue? How long can the bank’s decision-making process take? What percentage of the property price can you receive?

These questions should be addressed at least six months before the planned property purchase, or even earlier, as the decision-making process mainly depends on:

• your activity, your broker’s or representative’s (lawyer, attorney, etc.) activity,
• the seller’s activity,
• the location of your funds and the legality of their acquisition.

Answers to Questions

1. How to get good financing terms? – Keep your money in EU banks.
2. Is it worth hiring a separate specialist for this issue? – Good brokers provide this service; if you do not have such a broker, then definitely yes, but it is better to find a good broker, for example, us. Yes, this article contains elements of advertising, but besides that, it has useful and informative content.
3. How long can the bank’s decision-making process take? – In our experience, up to four months.
4. What percentage of the property’s price can you receive? – For our clients, we have secured 75% financing, but this does not guarantee that we can get the same for you. If it involves millions of euros, and they are in EU banks, then yes, usually, you can get 70%-75%, especially in Austria.

Austria, Germany: Business Immigration, Obtaining Residence Permits (Temporary and Permanent Residence) Through Property or Business Purchase

Generally speaking and not quoting legal norms, a residence permit in Germany or Austria can be obtained by an entrepreneur whose business is profitable, pays taxes, and can support themselves and their family. In Germany, investments in real estate or business that allow obtaining a residence permit start from two hundred thousand euros. The processing time can vary from two to six months. After living in the country on the basis of a residence permit without breaking the law for two years, you can start the process of obtaining permanent residence (PR).

We handle business immigration to Austria or Germany as an ancillary service when purchasing a business or commercial real estate. We will professionally guide you through the entire process of obtaining a residence permit and help you purchase any object.

In Conclusion

All that is written in this article can be done and supported at a high level by our company and its partners. We have all the objects listed here and even more available for sale. This text is based on the experience and practices of both our company’s staff and its partners.

We value working with existing clients and acquiring new ones, striving to provide the best service throughout their business development, as effectively and individually as possible. Why do we do this? Probably, it is clear on its own – we seek those who seek us, aiming to build mutually beneficial and harmonious relationships and work within a “circle of like-minded people.” Many of our clients purchase one object and then return for a second, third, or fourth. All transactions we accompany at the highest level.

Do not build illusions to avoid redoing everything later; either go through the entire process yourself and gain experience or turn to professionals – acquire partners, pay for their services, and save your nerves and time.

INVESTMAKLER

expertise quality reliability
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