After the Nazis annexed Austria in 1938, Kallir faced imminent persecution, not only because he was Jewish, but also because he had actively supported the Schuschnigg government. Compelled to emigrate, he sold the Neue Galerie to his secretary Vita Künstler, who was not Jewish. This was a rare example of a "friendly Aryanization." Künstler preserved the gallery as best she could and voluntarily returned it to Kallir after World War II. Because the modern artists represented by the Neue Galerie were not subject to Austria's export laws in 1938, and most were in any case considered "degenerate" by the Nazis, Kallir was able to bring a significant inventory with him into exile. He, his wife and their two children initially settled in Lucerne, Switzerland. But the Swiss would not give him a work permit, and so he traveled on to Paris. Here he founded the Galerie St. Etienne, named after Vienna's central landmark, the Cathedral of St. Stephen. The French refused to admit the rest of the Kallir family, however, and so they had to find a country that would take them all. In 1939, they emigrated to the United States, bringing a significant portion of his inventory.