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VISAS

COMPARED: Germany’s Chancenkarte vs. Austria’s Red-White-Red card for skilled non-EU workers

In their race to recruit expert workers, Germany and Austria have recently announced overhauls to the visas skilled non-EU citizens can get. Germany’s Chancenkarte or 'opportunity card' and Austria’s 'Red-White-Red' card both aim to make it easier for skilled non-EU workers to take up jobs in the two countries. But how do they compare?

Is it possible to get a working holiday visa in Switzerland? Photo by ConvertKit on Unsplash
One reader recommends mapping out which visa to apply for and when, before you ever arrive. Photo by ConvertKit on Unsplash

The skills shortages in Germany and Austria have become recent and urgent priorities for both governments. At least 124,000 jobs need filling in Austria and the government estimates the actual need could be double that number. Germany’s Labour Ministry estimates it currently needs to recruit around 400,000 foreign workers a year – just to keep up.

As two German-speaking countries, Germany and Austria are competing for a lot of the same skilled talent. So aside from the other aspects of living in either country – which one is offering a better visa regime?

Here, it depends a lot on your situation and priorities. As an example, each country’s EU Blue Card scheme works a little bit differently. Germany’s generally requires a higher minimum salary than Austria’s. But Germany’s also makes getting permanent residence later a little bit easier – so potential applicants have to consider some trade-offs.

READ ALSO: Germany or Austria: Where is it easier to get an EU Blue Card?

The new German Chancenkarte, or ‘opportunity card’ – how it’s set to make looking for work in Germany easier

For those who aren’t necessarily eligible for an EU Blue Card in Germany or Austria, other types of work or jobseeker visas exist.

Foreign specialists looking for a job in Germany typically need a job offer related to their professional qualification, and the German employment agency must approve the job offer. Applicants older than 45 must also have an annual salary of at least €46,530 (2023 values) – if they are coming to Germany for the first time. Even this minimum salary is lower than the threshold needed for an EU Blue Card in Germany.

But what if you don’t have a formal job offer?

The current traffic light government of the Social Democrats (SPD), Greens, and liberal Free Democrats (FDP) wants skilled people to also be able to come to Germany to look for work. The Chancenkarte – set to pass the Bundestag in the next few months – is designed to help non-EU nationals do this on a points basis.

German Bundestag

The German Bundestag is set to pass the new “opportunity card” or Chancenkarte – in the next few months, allowing some skilled workers to come to Germany to look for work even without a job offer. Photo: Felix Mittermeier/Pixabay

To be eligible for it, applicants have to broadly fulfill three out of these four conditions – meaning that applicants could still be considered for the Chancenkarte if they don’t have a formal job offer and are still missing one of these:

  • A university degree or professional qualification
  • Professional experience of at least three years
  • German language skills or previous residence in Germany (higher language skills give more points)
  • Under 35 years-old

The Chancenkarte thus differs from the current jobseeker visa, which lets people come to Germany to look for work if they have:

  • a qualification recognised in Germany and a practice permit for a regulated profession
  • proof a German language skills (typically to B1 level)
  • proof of ability to pay living costs

Designed to be more flexible, in the right circumstances, a future Chancenkarte holder could end up including a young person who has no university degree but both language skills and work experience. The German employer may be able to then hire this person, if they can work out a plan that allows the employee to upgrade their qualifications accordingly for the German job market.

Other future Chancenkarte holders might also include someone who doesn’t yet speak German but who is young with both a university degree and job experience, or a recent graduate with no experience but has appropriate language skills.

The government is looking to give Chancenkarte holders the ability to look for a job in Germany for one year. That’s longer than the current jobseeker visa’s six-month term. Holders are also allowed to engage in part-time or trial employment, allowing the employer to get to know the potential employee before hiring them on full-time.

READ ALSO: How to apply for Germany’s new ‘opportunity card’ and other visas for job seekers

Austria’s “Red-White-Red” card – the advantages for certain professions

Because Germany’s Chancenkarte is still in the draft law phase – even if expected to be approved soon – we know a lot more about the specifics of Austria’s Red-White-Red card.

Firstly, Germany’s Chancenkarte is designed for flexibility and is intended to allow potential skilled workers to come to the country even if they don’t have a job offer. By contrast, most applicants for an Austrian Red-White-Red card must have a job offer. Austria’s Red-White-Red card is also more specifically targeted, maintaining different points schemes for different types of skilled workers. 

Furthermore, Austria’s point system for the Red-White-Red card gives additional advantages to graduates in STEM subjects like math, engineering, natural sciences or technology – if they are applying under the “Very Highly Qualified Workers” scheme of the Red-White-Red card.

At the same time, a Red-White-Red applicant in a “shortage occupation,” may find it slightly easier than other applicants to get enough points to qualify for a Red-White-Red card. Shortage occupations include many types of experts who will have had a high level of academic advanced education – like engineers or physicians. But many shortage occupations in Austria also include skilled workers with vocational training, such as roofers, masseuses, bakers, and carpenters. Some shortage occupations are Austria-wide, while others are region-specific. You can find the full list at the available links.

Most non-EU applicants for Austria’s points-based Red-White-Red card will need to secure a job offer before getting the card, unlike with Germany’s planned Chancenkarte. Photo by Tima Miroshnichenko from Pexels

Certain “Other Key Workers” may also be able to apply for a Red-White-Red card, provided they have enough points, no equally qualified registered jobseeker at the Public Employment Service can be placed, and they are paid a minimum monthly salary of €2,925. Certain seasonal workers can also apply if they’ve worked for at least seven months of the last two years in that occupation and have at least A2 level German. These people also need job offers.

The only potential Red-White-Red applicants who don’t need job offers are self-employed key workers and start-up founders. Both of these applicants though, need to prove a minimum level of capital, amongst other requirements.

Successful applicants for a Red-White-Red card may then work in Austria for up to two years, at which point they may apply to extend their work permission through a Red-White-Red Plus card, which gives the holder unlimited access to the Austrian labour market that isn’t bound to any specific employer.

READ ALSO: How Austria is making it easier for non-EU workers to get residence permits

German – and English – language skills: How the Chancenkarte and Red-White-Red value languages

The other big difference between the German Chancenkarte and the Austrian Red-White-Red revolves around the points awarded for German or English skills.

In general, Austria’s Red-White-Red tends to require a lower level of German language skills in order to achieve points in an applicant’s favour. For example, applicants in shortage occupations will get five points for the most basic level of German – A1. That increases to 10 points for A2 and 15 points for B1 – to a maximum possible 15 points from German language skills.

By contrast, the current draft plans for the German Chancenkarte would require an applicant to have C1 German – the second-highest possible level – to get maximum points under language skills. Even B2 German – an upper intermediate level where speakers can begin to make advanced arguments – only yields a Chancenkarte hopeful partial points.

A German for Dummies language book sits atop a desk next to a pen and a cup of coffee. Photo by Jan Antonin Kolar on Unsplash

Getting points for language skills is generally easier under Austria’s Red-White-Red card system than Germany’s proposed Chancenkarte. Photo by Jan Antonin Kolar on Unsplash

Furthermore, Austria places English language skills on a mostly equal footing with German language skills – with basic A1 English being enough to get some workers partial points under the Austrian Red-White-Red scheme. A skilled worker looking to apply under Red-White-Red who can speak both English and German at a B1 level would already achieve the maximum number of points an applicant can get from languages under the Austrian Red-White-Red system.

By comparison, the German government has not announced plans to give out points under the Chancenkarte system specifically for English language skills, even if some applicants will be able to get enough points to get one even without speaking German at a high level. We should stress though, that the German Chancenkarte legislation is still in the draft phase and could change in some ways before it’s passed.

Flexibility and language trade-offs

The German Chancenkarte may ultimately end up being a more flexible option for skilled workers who want to come to Germany first before they commit to any one particular employer. It may also end up being more favourable for people who don’t come from the shortage professions that Austria is specifically targeting, for example. By contrast, getting a Red-White-Red card in Austria almost always requires a specific job offer.

Yet some applicants who snag a job offer may find it easier to qualify for Austria’s Red-White-Red card if they have a lower level of German language skills – particularly if they can speak English – which Austria’s points system values in a way that Germany isn’t considering.

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For members

WORKING IN GERMANY

Reader Question: Can I have a freelance side gig as an employee in Germany?

Going freelance in Germany - or even starting a side hustle - can be a rewarding and exciting challenge. But it can come with its own bureaucratic challenges. What are the rules around having a freelance gig if you already have a job?

Reader Question: Can I have a freelance side gig as an employee in Germany?

Whether it’s to try out freelancing or simply to earn a bit of extra money, many people in Germany may have thought about trying out a side gig – or a nebenberufliche Tätigkeit – while they still have a job. It might be an especially attractive option for part-time workers looking to try out a new project as well.

Germany generally allows this, provided that your employment contract doesn’t prohibit it explicitly.

That’s why the first thing you should do if you’re thinking about starting a side hustle is to read your employment contract.

At first, you’re looking to see if side gigs are explicitly prohibited. If there’s no explicit mention of it being prohibited, the next thing to look for is whether you need to seek the company’s permission – possibly through their HR department – to take up your side gig. If you do, this will be explicitly spelled out in your contract.

Once you do that, you need to check and see whether your side gig falls under the Trade Act (Gewerbeordnung). If it does, you will have to apply for the corresponding business license. If it doesn’t, you can be classed as a Freiberufler – or freelancer – and won’t need a special licence to start your business.

You’ll need to do some homework on what kind of business you are – and you’ll need to register with the tax office. Photo: picture alliance/dpa/dpa-tmn | Benjamin Nolte

However in both cases, you will still have to register with your local tax office (Finanzamt). 

In Germany, some professions will require you to have a Befähigungsnachweis – “certificate of competence” – proving you have expertise in your area and are appropriately accredited. These include regulated trades like working as a financial advisor or real estate agent.

Other trades, like marketing services and hospitality, won’t need such a certificate, but you might still be classed as a Gewerbe – which brings some different rules with it. Those who belong to the so-called “new self-employed”, such as artists, writers and journalists, are Freiberufler and don’t need a trade licence.

READ ALSO: Everything you need to know about becoming a freelancer in Germany

Do I need extra insurance?

For your job as an employee, you already will have the necessary health, care and pension insurance – with your contributions from your income there getting taken off your payslip.

If you have a side gig, you remain insured through your main job and don’t need to take out additional insurance. Your contributions – based on the income from your main job – will remain the same.

This changes if your side hustle becomes your main hustle – measured by your working hours. As long as the number of working hours you spend on your side hustle amount to less than your main job, you don’t need extra insurance.

In most cases, having a side hustle in Germany won’t impact your health insurance eligibility or contributions. Photo: thirdman /Pexels

The exception to this is if you take on an employee who works more hours than a mini-jobber. Hiring a mini-jobber is still fine.

If your side hustle does become your main hustle and you’re publicly insured, you need to advise your Krankenkasse.

KSK: How creative freelancers can pay less for German health insurance

What income tax do I have to pay?

First up, Germany has a tax class basically designed for second jobs. It’s called Tax Class 6 and it exists alongside your other tax class. That means that the income from your main job will be taxed according to the rules of one of five different tax classes. Which one you belong to in this case depends on family variables like your marital status or whether you’re a single parent.

Tax class 6, however, doesn’t take any of these variables into account and exists only for your side income. As such, your main employment income will never be taxed according to tax class 6 and your side income won’t receive the breaks and credits that your main income will if you normally belong to a tax class that gives you any advantages.

Tax class 6 will apply to any income you earn on your side hustle above €538 a month. Anything you earn up to this amount though is exempt from additional tax.

It’s important to note that if you do earn more than the monthly €538 minimum on your side hustle and thus have income subject to Tax class 6, you’ll need to file a tax return.

EXPLAINED: What German tax class are you in?

Do I have to charge VAT?

If your side hustle is earning you €22,000 a year or less, you can class yourself as a “small firm” or Kleinunternehmer – and you don’t need to charge VAT on your invoices. This is also the case if you earn above this amount but your income is earned abroad or from foreign clients. 

If you earn above that amount and work with German clients, then you will need to charge VAT and submit VAT returns to the Finanzamt. There can be advantages in doing this though, as it’s through these returns that you can get VAT back that you spend on legitimate business expenses.

EXPLAINED: What are the best bank accounts in Germany for freelancers?

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