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How Did I Get My Red-White-Red Card (Austrian Residence) As a Startup Founder

By John H. Shen

“Ok, that was faster than expected.”

I turned to my co-founder, as we just received a congratulations email from my lawyer about my rot-weiss-rot kart getting approved. The time frame from when I applied to when I got the formal approval took just 3 months, which was much faster than the average we have heard before. 

Gotta Love That Bureaucracy

Having lived and worked in both New Zealand and China prior, I had to say that Austria is much more difficult and process-heavy compared to NZ, especially for those who were not EU residence. We were very fortunate as we were getting a lot of help from the local agencies such as ABA, VBA and FFG. If you are a startup founder and new to Austria, I recommend look them up!

Then, why Austria? So many people asked us this question, mostly Austrians. I always start the answers by throwing bouquets at the cultural vibrance and my love for the local classical music. It always bring smiles to their faces. I mean it though. Vienna is such an exquisite city, always ranked high in the top 10 liveable cities in the world, many times No. 1.

But for our establishment, a FinTech startup founded in Shanghai China, Austria is our gateway to the limelight of the European market. Furthermore, in comparison to other European countries, the support in the innovation sector in Austria is phenomenal. From the public funding to the supports from the agencies, to the innovative and professional ecosystem. It literally took us much less time to find our first 10 beta B2B customers than to open a company bank account. 

Bureaucracy is annoying, but the ecosystem? Awesome!

A Little Bit About Me

I was born in Beijing, China. I went to New Zealand to study as a teenager. Graduated from University of Auckland with BSc - Computer Science in 2006. I worked as software developer, business analyst, then project/product manger. I decided to quit my job in the year 2015, to go full-time in entrepreneurship.

The first few ideas did’t work so well, no surprise there though. Then I met my co-founders in China in 2016. In that very year, I went back to Shanghai, China, to work with the team on the new business, Xencio. 16 years after living in New Zealand.

Xencio China offers corporate treasury automation via AI powered financial intelligence. We sell to many global corporates such as Unilever, Merck, GE, Herbalife, Didi, PingAn China etc. We now have 30 full-time hired hands in China alone. 

We felt it is appropriate in 2018 to explore reconnoiter an opportunity to expand to the global market, and that’s when we finally picked Austria as our hub to the EU market.

To Start a Company, You Need Residency 

Well, as long as you are not an EU citizen, you cannot really work here, let alone start a company. You can actually cofound a company, but you have to be a shareholder owing less than 50%.

But no worries, there’re 3 ways you could use inorder to obtain the red-white-red card which gives authorization to you to be the managing director, work in your business full time and get medical covers and kids to school just like the locals. 

1. Red-White-Red Card Start-up Founder Category

2. Red-White-Red Card Self-employed Key Workers Category

3. Other Key Workers Category

You can find more details from here about the red-white-red card yourself: https://www.migration.gv.at/en/types-of-immigration/permanent-immigration/

The rule of thumb is, for startup founders, 1 is better than 2, which is also better than 3. but 1 is much harder. So if 1 fails, you try 2, and so on. In this post, i will talk about the Startup Founder Category mostly, because that’s the one I did. 

Score Yourself Now!

https://www.migration.gv.at/en/types-of-immigration/permanent-immigration/start-up-founders/

Quite self explanatory, if you are young, tertiary level educated with good english and fair amount of accuaintance with work, you should be eliible with a >50 score. 

In my case, I got total 60 

20 - A university degree (not from Austria) 

10 - Work Experience more than 5 years

20 - English C2

10 - Additional Investment of €50,000, and

10 - Selected to a business incubator in Vienna

I just turned 35 when i applied, too bad I couldn’t get the additional 10 point for age (yeah that age up to 35 means it does not include 35, grrr!!). 

A Lil Hurdle to Get You Started - Frist Chicken and Egg 

Ok, so far so good right? Here comes the fun part:

If you want your application likely to succeed (which you definitely want, right?), you had better have a company already registered. Wait a minute, didn’t I mention earlier you need residency to be the managing director of a GmbH? Exactly! So here you go:

Company <--Dependency--> Director having citizenship or residency

There’re only two possible ways of tackling this: 

1. To apply for red-white-red without having a company (and risking getting rejected), or 

2. To form a company without having residence (the company formation will come to a halt at some stage, but regardless). We chose the second one. 

(actually there is a whole lot to talk about with company formation for non-EU citizens, I will write another blog about it.)

Document Preparation 

While the company formation is underway for me,  I started to prepare my list of documents. 

Let’s start with the easy and pettifogging ones: 

1. Passport and photocopies of passport

2. EU Sized Passport Photos

3. TOFEL Certificates to show sufficient language level (if your citizenship is not from a native German or English speaking countries)

4. Proof of Business Incubator - If you already in one, this is money for old rope. But if you are looking at a foreign friendly incubators to get into, here are some quick recommendations, google them: Global Incubator Network, Vienna Startup Package, Elevate by TheVentury, INiTS, weXelerate, ElevatorLab

5. Proof of Fund - for my case, i need to show a bank statement of more than 25.000 EUR. I also had to show that the new company bank account (Xencio GmbH) has over 50.000 EUR.

Then the slightly more complicated ones:

6. Work Certificates - to show your pertinent work experiences. I literally emailed or LinkedIn messaged all my ex-managers or HR department of my former companies, they were very corporative. Because mine is all from NZ, thus did not need translation into English. Yes English is ample enough for it.

7. New Company Related Files - As company formation was not fully completed, I just submitted all the documents or evidence as could provide. This shows the authority that you are resolute with starting a company, not just saying you would.

8. Business Plan - I will going to a bit more details later about it. you can message me directly to get a business plan for Xencio GmbH which we have submitted for my application.

Comparatively more challenging, these documents need apostille:

(I have documents from NZ and China both needing apostille, I found the one from China to be much harder. Simply because NZ has an E-apostille system, if your home country has it, you’re in luck! For my Chinese files, they need to be translated, notarised and diplomatically apostilled)

9. Marriage Certificate 

10. Criminal / Police Record

11. Birth Certificate

12. University Degrees and Transcripts - After being apostilled, your degrees need to be verified with ENIC NARIC Austria, this copy needs to be in your document too.

Ok this last one is ridiculous:

13. The proof of residential address in Austria 

Yes! You heard right! You Need A Residential Address  - The Second Chicken and Egg

You see, the fact you had to show proof of address as part of your residency application is simply absurd, says the former Minister of Digital and Economical Affairs (https://investaustria.at/en/news/2019/03/red-white-red-card.php). 

What if your application got rejected? What if (and it definitely will be) things gets impeded even after you got approved? Anyway, the only way to maneuver around it is to sign with explicit short to medium term accomodation mainstay or get some local friends who has properties to assist you with. I don’t really want to do any advertisement here, just message me if you want to know the list of these accomodations providers. 

Business Plan, Do's and Don't's

You are an entrepreneur, you know what a good business plan should include. You know, the basics such as:

- Executive Summary - The Problem - Solution - Benefits - Product / Service Description - Market Analysis - Business Development Plan - Competitor Analysis - Financial Planning

As mentioned earlier, please message me to get a copy of our submitted business plan as reference. 

Additional to a good startup business plan, there’re a few more things the authority are looking for: 

1. Micro-economical Benefit - Local employment - so you need to show how your company is going to hire more people in the next 2-3 years. As a startup you need to consider this and make plans for it.

2. Micro-economical Benefit - Concerning Disruption - this one is a little bit counterintuitive. For the authority, If your business is to provide more job opportunities or bring more money to Austria, well that’s just awesome! But if it’s a type of disruption that it simply moves customer from the competitor to you, then it is not considered economically beneficial. This is a fine line though, ideas like uber or airbnb can in theory considered having no micro-economical significance, in subject to how you frame it in your plan. This could be quite tasking

3. Technological innovation - similar to the governmental grants, there is a huge emphasis on technological innovation. The goal is to land more IPs in Austria. In your business plan, the touch on business development and marketing is important, but it cannot be all it is to your business. 

Ready Now? Let’s Submit It!

If you are lucky enough to be from one of the >90 days visa-free countries. You can actually submit your application in Austria. 

For me, applying via a Chinese Passport, even I was in Vienna on a business purpose visa, I had to submit it in China. This makes a huge difference and added additional 1-2 months of diplomatic courier transfer (YES, THAT LONG). 

What Happens After Submission?

The MA35 will do an initial mild check of your documents for sufficiency. Then it will be forwarded to the labour department - AMS. Your case would then be presented and discussed over a jury meeting (this is why the do’s and don’t’s are very important). The jury meeting is the ultimate determination of whether your case is successful or not. It takes up to 8 weeks for a decision to be made by the labour department. 

A notice from the MA35 will be issued that your application is approved, then there will just be more waiting for MA35 to check in detail of all the documents provided.  

Hooray, It’s Approved, Then What?

Again, if you are lucky enough to have a passport that grants you Schengen 90 days visa-free, your red white red card should be ready for collection. For me, unfortunately, I needed to fly back to China again (even though I was in Vienna with a business purpose visa at the time of approval), to apply for a Visa-D so that I could come back to Vienna to collect my red-white-red. 

Ok ok, no more complaining, with all that being done, I finally made it back to Vienna. Picked up the card and business is good to go, hooray!!

Business just started, More challenges Awaits

As I often say to may others, bureaucracy is challenging, doing business is much harder! In my next few blogs, I would like to share more about our journey with hiring, tax, social security, getting the grants, as well as living here as an English speaker (getting the drivers license, kids to kindergarten / school, and renting / buying a house). This is just my first blog. 

Feel free to contact me directly (linkedin.com/in/johntheshen). If you got any more questions. See you in my next blog!

Disclaimer: Information provided in this article does not serve as legal advice of any kind. If you have a particular question regarding the red-white-red card, please consult an immigration lawyer. For the most up-to-date information, please refer to https://www.migration.gv.at/en