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Migration Economy: Who are the migrants starting businesses in Austria?

Self-employed migrants - or those building businesses in Austria - contribute hugely to the local economy, a new study has found.

Migration Economy: Who are the migrants starting businesses in Austria?
Crowds walk past a clothing store at Vienna's famous shopping street, Mariahilferstrasse, in Vienna, Austria. (Photo by JOE KLAMAR / AFP)

People born outside of Austria rely, in large part, on self-employment or opening up businesses (and then employing other migrants) as a path to working in the country, a study conducted by the Institute of Advanced Studies (IHS) on behalf of the Integration Fund (OeIF) found.

The study, Migration Economy in Vienna (Migrantische Ökonomien in Wien), also found that some nationalities tend to stick to specific industries – which could be partially explained by how migrants rely on informal networks of people of the same origin to start a business.

READ ALSO: Being self-employed in Austria: What you need to know

For example, people from the former Yugoslavia, Eastern Europe and Turkey often work independently in the construction sector. People from China are strongly concentrated in gastronomy, along with people of Turkish, Syrian, Thai and Maghreb origin.

Migrants originally from Asia and Africa, and especially India, Egypt and Afghanistan, are concentrated mainly in postal and courier services, including bicycle messenger services. Finally, the study found that people from Turkey and former Yugoslavia also appear more often than average registered as taxi drivers.

How much money do they bring in?

Figures from Austria’s Chamber of Commerce (Wirtschaftskammer) showed that business owners in Vienna with a migration background generate € 8.3 billion in revenue and create around 45,500 jobs. 

Plus, these companies pay around € 3.7 billion every year in taxes and duties.

Walter Ruck, President of the Vienna Chamber of Commerce, said: “Companies with a migrant background not only enrich the diversity of the corporate landscape in Vienna, but they are also an economic factor.”

READ MORE: Diversity and jobs: How migrants contribute to Vienna’s economy

Who are these migrants?

Part of the survey involved a qualitative research with migrant entrepreneurs in Vienna, but also a comprehensive quantitative data analysis of registered businesses.

Many of the entrepreneurs interviewed were first generation (meaning they were not born in Austria), and most were between 26 and 35 years old and male. In total, the small businesses surveyed employed two to a maximum of four employees, most of whom were related to the owner.

READ ALSO: EXPLAINED: The main Austrian ‘tax traps’ foreigners should be aware of

The entrepreneurs with a migrant background who were interviewed generally either did not have higher school-leaving qualifications (known in Austria as the Matura) or have not yet had their foreign certificates recognised in Austria and therefore do not work in their sector of study. 

First-generation migrants, in particular, tend to have lower educational qualifications, which has a negative impact on their chances in the labour market, the study said. Because of that, the respondents named a lack of occupational alternatives as one of the decisive factors for starting a business.

Additionally, many of the respondents said they relied on a network of people from their own nationality for help setting up a business. Many of them weren’t aware of the support offered by official bodies, including the Chamber of Commerce. 

READ ALSO: What is the new cost of living ‘credit’ for self-employed people in Austria?

The study concluded that language barriers and some cultural aspects played a role, but since most entrepreneurs were interested in getting more detailed information on starting and running businesses, there was potential for better communication and targeting by the public offices.

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WORKING IN AUSTRIA

How Austria plans to raise the retirement age for women

The retirement age for women in Austria will be gradually raised by five years under government plans. Here's what you need to know.

How Austria plans to raise the retirement age for women

The statutory retirement age in Austria is currently 65 years for men and 60 for women – but this will change in the coming years. 

Between 2024 and 2033, the state pension age for women will gradually rise to 65, in line with the retirement age already set for men.

This move is in alignment with other European countries like France, Germany and Italy where the state pension age is the same for both men and women. 

The Austrian government this week revealed more details on how this change will happen. 

When will the pension age rise to match men’s?

As with everything regarding retirement and pensions, it’s a complex process. 

When someone retires, and how much they receive, depends on several factors such as their occupation and how many years they’ve paid into the system. 

READ ALSO: Five things you need to know about the Austrian pension system

But here’s a look at how the government will raise the statutory retirement age for women. 

As of next year, the standard retirement age for women will be gradually increased – and by 2033 it will hit 65 years.

The exact timetable is set to be fixed as part of the social security amendment, and passed by the National Council next week, according toDer Standard report.

Women born between January 1st and June 30th 1964 will generally only be able to access their pension at the age of 60.5. For those born in the second half of 1964, the standard retirement age will be 61.

This pattern will continue in further half-year steps up to the 1968 birth cohort. Women born after June 30th 1968 will – like their male colleagues – only be able to retire when they reach the age of 65, said Austrian People’s Party (ÖVP) delegate Michael Hammer.

This does not affect the provisions on early retirement (the so-called Korridorpension). In this case, the gradual increase of the age limit already started in 2019. There is a transitional provision for partial retirement arrangements: agreements that are already effective or approved by the Austrian Public Employment Service (AMS) can be continued in the originally agreed form – irrespective of a possible earlier statutory retirement age. For new agreements in 2023, the granting of partial retirement is possible for up to six months after the standard retirement age has been reached.

READ ALSO: EXPLAINED: Everything you need to know about retiring in Austria

The cut-off dates adopted by the Social Affairs Committee from the coalition government made up of the ÖVP, the Greens and the Social Democrats (SPÖ) on Wednesday will mean that some women will be able to start their retirement a little earlier than planned. In view of different possible interpretations, “clarifications in conformity with the constitution” had been made, said Minister Johannes Rauch (Greens).

What else has been decided?

An initiative motion (from the SPÖ) was unanimously sent to the plenary session with the aim of closing gaps in what’s known as the Heimopferrente – or home victims’ pension – identified by the Ombudsman Board. This pension is for people who were subjected to abuse in a care situation, such as a youth home, church or within a foster family.

In future, people who are permanently unable to work and who cannot receive social assistance because their partner’s income is too high will also receive this pension – and on application also retroactively.

Until now, these people had to wait until the standard retirement age. Furthermore, the ruling of the Supreme Court (OGH) is to be taken into account, according to which an individually agreed or judicially awarded individual compensation payment does not prevent the receipt of a home victim’s pension. 

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