Should SA follow the lead of other countries and adopt an entrepreneur visa to attract foreign start-ups? And could doing so create some of the millions of jobs the country needs?
Watters says some applicants have in the past abused the business visa, for example by bringing in relatives to work in their businesses or recycling the minimum investment requirement from one applicant to the next. This may be why the department is cautious about the idea of an entrepreneur visa.
Home Affairs spokesman Mayihlome Tshwete says there is no plan at present to develop a specific entrepreneur visa, and points out that in practice such a visa might be abused. He adds that the department remains open to new ideas that could benefit the economy.
He also dismisses concern among immigration attorneys over business visas, saying the complaints have “always been there”. He says DTI is processing letters of recommendation “within a month” and that 1728 business visas were issued from June 1 2013 to May 31 2014, compared to 1454 from June 1 last year to November 9 this year. This latter figure does not include visas issued at SA missions abroad, as under new immigration rules applicants must apply for any visa outside SA.
A high number of migrants start businesses, but the effectiveness of entrepreneurial visas has not been proven, argues Migreat in its report released in May. It says no evaluation has been undertaken of the effect entrepreneur visas have had on investment and jobs, but most programmes in Europe have approved fewer than 100 applications annually.
Canada, which launched a start-up visa in April 2013, offering immediate permanent residence to entrepreneurs, approved just 16 such visas for eight companies by June, against the 2750 set aside each year for applicants and their families.
The exception, Migreat says, has been the UK, but it adds that there is strong anecdotal evidence to indicate abuse and failure of the entrepreneurs under the first iteration of the visa.
It says start-up visas are also likely to miss the majority of would-be migrant entrepreneurs – those who haven’t yet started a business and those who come up with a viable business idea only once they have migrated and acquired local knowledge, contacts and experience.
The report quotes Philippe Legrain, author of Immigrants: Your Country Needs Them, who says though start-up visas are better than nothing, their benefits are “massively oversold”.
Perhaps immediate jobs and investment are not the only possible benefits that entrepreneur visas can produce.
In Start-Up Chile, launched in 2010, the Chilean government offers $35000 and a one-year visa for entrepreneurs who base their businesses in Chile for at least six months. Over 2000 entrepreneurs have passed through the programme, most of them foreigners, raising over $100-million in private capital.
Critics say few direct jobs have been created, mainly as only a few applicants stay on in the country after a year. But the programme has helped fuel an interest by locals in entrepreneurship and has put the country in the spotlight as a potential entrepreneurial hub.
A study last year by Stanford University found that by interacting with foreign entrepreneurs, Chileans were able to improve their confidence in pursuing higher-value business opportunities, which they previously perceived to be out of reach.
The Chilean programme is an ambitious one, but SA too may need to test bold ideas. Attracting foreign entrepreneurs might be one of these. — Financial Mail
Start-up visas, what gives?
Watters says some applicants have in the past abused the business visa, for example by bringing in relatives to work in their businesses or recycling the minimum investment requirement from one applicant to the next. This may be why the department is cautious about the idea of an entrepreneur visa.
Home Affairs spokesman Mayihlome Tshwete says there is no plan at present to develop a specific entrepreneur visa, and points out that in practice such a visa might be abused. He adds that the department remains open to new ideas that could benefit the economy.
He also dismisses concern among immigration attorneys over business visas, saying the complaints have “always been there”. He says DTI is processing letters of recommendation “within a month” and that 1728 business visas were issued from June 1 2013 to May 31 2014, compared to 1454 from June 1 last year to November 9 this year. This latter figure does not include visas issued at SA missions abroad, as under new immigration rules applicants must apply for any visa outside SA.
A high number of migrants start businesses, but the effectiveness of entrepreneurial visas has not been proven, argues Migreat in its report released in May. It says no evaluation has been undertaken of the effect entrepreneur visas have had on investment and jobs, but most programmes in Europe have approved fewer than 100 applications annually.
Canada, which launched a start-up visa in April 2013, offering immediate permanent residence to entrepreneurs, approved just 16 such visas for eight companies by June, against the 2750 set aside each year for applicants and their families.
The exception, Migreat says, has been the UK, but it adds that there is strong anecdotal evidence to indicate abuse and failure of the entrepreneurs under the first iteration of the visa.
It says start-up visas are also likely to miss the majority of would-be migrant entrepreneurs – those who haven’t yet started a business and those who come up with a viable business idea only once they have migrated and acquired local knowledge, contacts and experience.
The report quotes Philippe Legrain, author of Immigrants: Your Country Needs Them, who says though start-up visas are better than nothing, their benefits are “massively oversold”.
Perhaps immediate jobs and investment are not the only possible benefits that entrepreneur visas can produce.
In Start-Up Chile, launched in 2010, the Chilean government offers $35000 and a one-year visa for entrepreneurs who base their businesses in Chile for at least six months. Over 2000 entrepreneurs have passed through the programme, most of them foreigners, raising over $100-million in private capital.
Critics say few direct jobs have been created, mainly as only a few applicants stay on in the country after a year. But the programme has helped fuel an interest by locals in entrepreneurship and has put the country in the spotlight as a potential entrepreneurial hub.
A study last year by Stanford University found that by interacting with foreign entrepreneurs, Chileans were able to improve their confidence in pursuing higher-value business opportunities, which they previously perceived to be out of reach.
The Chilean programme is an ambitious one, but SA too may need to test bold ideas. Attracting foreign entrepreneurs might be one of these. — Financial Mail
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