Illegal business in Vienna: the shadow economy is booming, the police strike!

Illegal business in Vienna: the shadow economy is booming, the police strike!

The shadow economy is currently flourishing in Vienna - especially in areas that one might not always suspect at first glance. According to reports from butterfly Illegal businesses, particularly in the beauty industry, are on the rise. Whether it's unlicensed beauty clinics or illegal butcher shops, the market for such services is expanding rapidly, which poses major challenges for the authorities.

Economist Friedrich Schneider predicts that the shadow economy's share of gross domestic product (GDP) in Austria will rise from 7.8% in the previous year to 8.1%. In the last two years, the Emergency Measures Group in Vienna has uncovered a whopping 386 illegal businesses, including five beauty clinics. Various illegal butcher shops and a car repair shop also came to light in 2025.

Insight into the shadow economy

The shadow economy includes economic activities that are not included in the national product and are therefore not taxed. In Austria in particular, a system has developed in which many services are deliberately concealed in order to circumvent state regulation. This type of economic activity includes both the illegal part and the subsistence economy, such as voluntary work or home care, which are not covered.

Schneider and other experts report that well-organized structures in the shadow economy make police investigations more difficult. The most common crimes in this area include drug trafficking and undeclared work. Statista reports that a similar picture can be seen in Germany: Here the shadow economy is estimated to account for 5 to 10% of GDP, with typical areas such as construction and illegal trade.

Vienna in focus

In Vienna, the shadow economy is particularly evident in illegal tobacco factories, as demonstrated by the recent discovery of an illegal factory in Floridsdorf, where over 200 kg of tobacco and shisha accessories were confiscated. Such activities are not only a nuisance for the legal market, but also harm the entire economy, as they cause a high number of unreported damages, often amounting to billions.

The abnormalities in Vienna's shadow economy are part of a larger phenomenon that can be seen in numerous countries. Overall, the financial damage caused by the shadow economy and undeclared work should not be underestimated. In Germany, for example, the economic damage in 2022 amounted to a good 686 million euros - even though many of these benefits are often viewed as trivial offenses Wikipedia determines.

Vienna remains an exciting playing field for investigators, while the shadow economy becomes more and more influential. It remains to be seen whether and how the authorities will respond to these developments in order to put an end to illegal activities and clean up their own statistics.