A growing number of countries determined to attract entrepreneurs to their soil are handing "start-up visas" to the best and brightest of them.
A start-up visa enables entrepreneurs to live and start businesses in countries where they are not citizens or permanent residents, for a defined period of time.
According to global entrepreneur network Startup Nations, at least a dozen countries now have start-up visa programmes. These include Australia, New Zealand, Singapore, the UK, Ireland, France, Spain, Italy, the Netherlands, Denmark, Canada and Chile. Startup Nations’ network continues to grow, and is expected to add the likes of Argentina, Poland, Norway, the Dominican Republic and Estonia, which plans to implement a start-up visa programme in January.
SA does not have a visa programme for entrepreneurs, but the local start-up community hopes to change this.
"We are engaging with government to improve visa restrictions for foreign high-impact investors and entrepreneurs, and change the perception that allowing them to start their businesses in SA will take jobs away from locals rather than create jobs," says Matsi Modise, MD of Simodisa.
Simodisa is an organisation that aims to catalyse entrepreneurship in SA by nurturing a start-up ecosystem. Its engagement with government, which includes the departments of trade & industry and science & technology, is linked to a broader engagement with the SA Reserve Bank regarding intellectual property exchange controls, says Modise.
Any intellectual property created in SA needs to go through exchange controls before it becomes the property of its creator, explains Alex Fraser, vice-chair of nonprofit tech entrepreneurship organisation, the Silicon Cape Initiative.
"This adds cost, time and another regulatory hurdle to jump over, making the country less attractive to foreign entrepreneurs," Fraser says.
Though she would love to see a start-up visa programme implemented in SA, Fraser believes these sorts of legislative changes need to be made first. She is positive about engagements with government to bring about these reforms.
Alongside engagements with government, Simodisa has set up a "talent & visa" task team to find practical ways to entice global early stage, high-potential entrepreneurial talent to start businesses in SA and advance skills transfer initiatives, says Modise.
Migreat, an immigration consultancy that has compared start-up visa policies around the world, finds that there are broadly three types of start-up visa available: an entrepreneur visa; a fast-tracked general work visa specifically for entrepreneurs; and temporary visas given to individuals involved in incubation programmes.
The eligibility requirements for these programmes vary significantly. In the Netherlands, for example, entrepreneurs must be mentored by a local incubator and be able to cover their own living expenses. Their business plan does not have to be approved before the visa is granted, as in Denmark, where business plans must pass the scrutiny of an official panel of experts selected by the Danish Business Authority.
Holders of a Danish start-up visa must demonstrate they can support themselves during the first year of their stay in the country, but are given access to welfare benefits such as health care and education, which also applies to accompanying spouses and children.
In Canada, would-be entrepreneurs must obtain backing from one of the country’s designated venture capital funds, angel investors or business incubators.
Start-up Chile, launched in 2010 and one of the few established start-up visa programmes in a developing economy, provides seed capital to entrepreneurs ranging from US$15,000-$90,000, depending on the stage of the start-up. Migreat says the programme has attracted more than 2,000 entrepreneurs since inception.
These businesses have raised more than $100m in private capital, positioning Chile as an innovation hub in Latin America.
Following the success of start-up visa programmes in Europe, plans are now afoot at EU level to develop a start-up visa scheme that would target non-European start-up founders and provide access to the single market.
Professional services firm EY, meanwhile, has recommended creating a G20 start-up visa that would enable entrepreneurs in G20 countries to move freely between these economies.
"Multilateral visas, or regional visa programmes, are crucial to improve labour mobility, conduct business internationally, and transfer a positive entrepreneurial culture throughout the G20," says Rohan Malik, emerging markets leader for global government & the public sector at EY.
SA policy makers can look forward to the Startup Nations Atlas of Policies, a compendium of public sector policies and programmes to support start-ups that Startup Nations is in the process of compiling.