volume ii: admission of migrant entrepreneurs...countries, including primary data collection will...

Volume II: Admission of migrant entrepreneurs 29 July 2016

Study for an Evaluation and an Impact Assessment on a proposal for a revision of the Council Directive 2009/50/EC (‘EU Blue Card Directive’)

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Contents

1 Introduction 6

2 Overview of the admission schemes and policy context 8 2.1 Brief overview of categories of TCNs covered ......................................................................... 9 2.2 Policy context and perceived need(s) the schemes aim to address ...................................... 13 2.3 Entrepreneurial culture and prerequisites for entrepreneurship ............................................ 15

3 Admission criteria for migrant entrepreneurs under the examined schemes 27 3.1 Characteristics of the examined schemes and entry conditions for ‘innovative

entrepreneurs’ ........................................................................................................................ 27 3.2 Requirements for having a facilitator, sponsor or endorser ................................................... 43 3.3 Support schemes ................................................................................................................... 44 3.4 General self-employment permits .......................................................................................... 46

4 Application process 48 4.1 Procedure length .................................................................................................................... 48 4.2 Authorities responsible for processing the application ........................................................... 50 4.3 Procedure for submitting the application................................................................................ 56 4.4 Duration of the residence permit and renewal conditions ...................................................... 65 4.5 Status changes ...................................................................................................................... 69

5 Rights granted under the scheme 71 5.1 Labour market access rights .................................................................................................. 71 5.2 Family reunification rights ...................................................................................................... 71 5.3 Facilitation/’fast-track’ to permanent residence/citizenship .................................................... 72

6 Statistical overview 74 6.1 Comparative analysis of statistical data for start-up visas/entrepreneurship residence

permits under the examined EU schemes ............................................................................. 74 6.2 Comparative analysis of statistical data among international start-up schemes ................... 78

7 Comparative success of the schemes 80 7.1 Number of applications and permits granted ......................................................................... 80 7.2 Success of the scheme in terms of investment and jobs created .......................................... 82 7.3 Attractiveness and branding of the schemes ......................................................................... 82 7.4 Further considerations related to the success of the schemes.............................................. 83

8 Analysis of a potential EU-wide scheme 86 8.1 Scope of a potential EU-wide scheme ................................................................................... 87 8.2 Admission criteria for a potential EU-wide scheme ............................................................... 89 8.3 Application process for a potential EU-wide scheme ............................................................. 94 8.4 Rights for a potential EU-wide scheme .................................................................................. 95 8.5 Summary: considerations in adopting a possible EU-wide scheme for innovative

entrepreneurs ......................................................................................................................... 97

Annex 1 Country Fiche: Denmark ......................................................................... 101

Annex 2 Country Fiche: France ............................................................................. 111

Annex 3 Country Fiche: Ireland ............................................................................ 124

Annex 4 Country Fiche: Italy ................................................................................ 136

Annex 5 Country Fiche: The Netherlands .............................................................. 151

Annex 6 Country Fiche: Spain ............................................................................... 165


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Annex 7 Country Fiche: United Kingdom .............................................................. 180

Annex 8 Country Fiche: Australia ......................................................................... 195

Annex 9 Country Fiche: Canada ............................................................................ 207

Annex 10 Country Fiche: Chile ............................................................................... 219

Annex 11 Country Fiche: New Zealand ................................................................... 230

Annex 12 Country Fiche: Singapore ........................................................................ 241

Annex 13 Country Fiche: United States .................................................................. 250


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Key messages

■ A variety of schemes exist across the analysed countries covering different categories of migrants.

This is reflective of the different policy context and needs of each country.

■ With regard to the seven EU Member States examined, the special visas/residence permits for

innovative entrepreneurs and start-ups introduced form part of wider national strategies aiming to

boost economic competitiveness, growth and the knowledge economy.

■ The definition of innovative entrepreneurship varies extensively across the countries analysed,

strongly depending on the specific admission criteria. Definitions range from restrictive definitions

in terms of the target groups and specific industries – e.g. in Denmark the scheme aims to attract

businesses that are “scalable and, ideally tech-driven start-ups” mainly in the fields of life science,

ICT, design and clean-tech and sustainable energy – to more flexible definitions such as the one in

Ireland “introducing a new or innovative product or service to international markets”. The exception

is the UK where innovation is not a criteria for admission.

■ Supportive business environment and environmental capabilities are the two main prerequisites for

developing entrepreneurial culture aimed to flourish and attract entrepreneurs.

■ The highest entrepreneurship culture is represented by the following countries: Canada, Denmark,

the Netherlands, United Kingdom, New Zealand, Singapore and US. These countries tolerate risk

of failure, encourage the self-employment and have a strong innovation and research culture.

Australia, France and Ireland demonstrated a moderate performance of entrepreneurship culture,

whereas Chile, Italy and Spain showed a low performance.

■ The following elements characterise the examined schemes for migrant entrepreneurs: quotas

(FR, UK, Canada, Chile, US), point-base system (DK, UK, Australia, New Zealand); minimum

capital required (FR, IE, IT, UK, Australia, Canada, New Zealand, Singapore, US); funding

provided (FR and Chile); innovation requirement (all countries, except for the UK); facilitator driven

(NL and Canada); schemes targeted at business ideas/early stage businesses (DK, FR, NL, ES);

sectoral approach (DK and IE).

■ Submission of a business plan with the application is required in the seven examined EU Member

States - DK (Start-Up Denmark), FR (Paris Tech Ticket), IE, IT, NL, ES and the UK. Presenting a

business plan is also required in Chile, New Zealand and Singapore.

■ One of the most common requirements is capital required/funds available for setting up the

business. This is the case in four of the seven examined EU Member States – FR (Talent

passport), IE, IT, UK and in five of the six examined international schemes: Australia, Canada,

New Zealand, Singapore, US (EB-5 visa).

■ The procedure length in the analysed schemes vary between the Member States (e.g. 1 month in

Denmark or Spain to up to 4 months in France). These differences can be explained through

various factors, including the number of applications achieved, whether a cap was put on the

actual number of permits to be issued, or how many government and private bodies are involved

in the process itself.

■ The involvement of third parties in the selection process is generally seen as advantageous, as

these often bring the expertise necessary to evaluate a project or a business plan.

■ The highest number of residence permits/visas for entrepreneurs issued in the examined EU

countries is recorded by far in the UK – a total number of 15,888 permits granted in the period

2010-2015. The rest of the EU schemes register lower numbers (with the exception of the French

Tech Ticket which has a cap of 50 permits) with only tens of start-up visas issued annually.

■ Two of the schemes – namely those two with support schemes in place (France and Chile) have

been identified as having powerful brands. The brands are not only strengthened through the

funding these schemes provide, but also through other support elements – e.g. fast-track

application processes.

■ In terms of jobs created and investment generated, only limited data exists. Where data is


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available it indicates that the highest number of jobs and investment has been in the UK. Further

considerations when measuring success refers to transparency of the schemes, failure rates of

start-ups and displacement effects of national and EU citizens.

■ The admission criteria as well as the rights granted under the schemes (such as family

reunification) are only part of the overall ‘package’ contributing to a scheme’s attractiveness for

entrepreneurs. Overall, business support such as available ecosystems and possibilities for

funding weighs more compared to easing entry criteria.

■ In light of existing and emerging initiatives at Member State’s level, the introduction of a possible

EU-wide scheme could bring added value, such as strengthening the EU’s role as an ‘innovation

region’ and giving more exposure to innovation hubs that might not be on the radar of

entrepreneurs as of now. The exact components of such a scheme need to be defined through

further analysis.


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1 Introduction

The aim of this document is to provide a mapping and a comparative assessment of the

current situation regarding entrepreneurs from third countries in those Member States who

have introduced special schemes for admission of entrepreneurs (DK, ES, FR, IE, IT, NL,

UK) and selected third countries who have adopted similar schemes (Australia, Canada,

Chile, New Zealand, Singapore, United States). The mapping includes, inter alia, aspects

related to (i) entry and stay requirements; (ii) programmes of support measures to attract

entrepreneurs and (iii) advantages and disadvantages of the existing programmes, with a

view to identifying elements suitable for a potential EU-level scheme.

Table 1.1 Selected countries for the mapping

Countries

Member States Denmark, France, Ireland, Italy, the Netherlands, Spain, United Kingdom

Third countries Australia, Canada, Chile, New Zealand, Singapore, United States

The mapping has been carried out following the Terms of Reference (ToR) of the Study for

the an Impact Assessment on a proposal for a revision of the Council Directive 2009/50/EC

(‘EU Blue Card Directive’) undertaken by ICF International and commissioned by DG Home

Affairs, European Commission. The information presented in this document is based on 13

Country Fiches drafted by ICF researchers and reviewed by commissioned experts as well

as on the findings of the expert workshop organised on the 7th March in Brussels; the Expert

Seminar on the Attraction of Entrepreneurial Talent to the EU held by the EC and the Dutch

Presidency on 23 June 20161.

The Country Fiches and the mapping have been undertaken on the basis of secondary data

collection (literature review and review of available official online sources) as well as an

expert workshop with inputs from experts. Primary data collection (i.e. interviews with

relevant stakeholders) has not been carried out as part of this assignment.

It should also be noted that the examined EU countries are those that have established

special ‘start-up’/entrepreneurship visas. However, other EU countries (especially those that

have entrepreneurial hubs) that do not have special scheme in place may be attracting

entrepreneurs via other entry pathways. EU economies, such as Germany and the

Scandinavian region (except Denmark) have not been examined. The US example (where

no special visa exists, however attraction is high) shows that entrepreneurial culture and

opportunities in the country may play a more important role than the visa/residence permit

itself. A further, more systematic analysis of the admission of entrepreneurs from third-

countries, including primary data collection will benefit the understanding the pre-conditions

of attracting entrepreneurs in the EU.

Due to varying terminology across the examined countries, the terms ‘visas’ and ‘residence

permits’ have been used interchangeably to mean allowing entry and stay for a certain

period of time for setting up a business/start-up. The term ‘scheme’ has also been used

in a broader context with regard to the admission under a particular visa/residence permit

and any additional benefits it may provide. In some countries (e.g. Denmark, Italy) the term

‘Start-up visa’ has been adopted where in other countries (e.g. Netherlands, Ireland), the

term residence permit has been used with no difference of the types of instrument used –

visa or residence permit – both meant for admitting TCNs for a certain period of time to set

up start-ups.

1 Please note that only newly used sources have been referenced in this document. For other sources, please refer to the accompanying Country Fiches.


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Visa (definition EMN Version 3.0 Glossary): The authorisation or decision of a Member State

required for transit or entry for an intended stay in that Member State or in several Member

States.2

Residence permit (definition EMN Version 3.0 Glossary): Any authorisation issued by the

authorities of an EU Member State allowing a non-EU national to stay legally in its territory.

Finally, the concept of ‘entrepreneurship’ is not a strictly defined one. A common

understanding is that entrepreneur is a person who sets up a business and is not

employed with an employer. In general, definitions of ‘entrepreneurship’ in the academic

literature vary widely. The common definition is someone who sets up a new firm /

organisation3. However, definitions also include e.g. “individuals who display the readiness

to take risks with new or innovative ideas to generate new products and services”4. The

complexity derives from the concept's linkage, on the one hand, with other concepts such as

innovation, the knowledge economy, the digital society, and on the other hand with similar

but nuanced notions - self-employment, new business formation and SMEs.

Entrepreneurship is typically considered identical with business start-ups or the creation of

new organisations despite the fact that these concepts are not synonymous. In terms of the

structure and types of activities, there is a broad range of entrepreneurial ventures from one-

person companies to co-operatives, from high-tech new start-ups to traditional workshops.

Thus, entrepreneurship is a multifaceted economic and social phenomenon cutting across a

broad range of disciplines such as psychology, management studies, economics and public

policy.

Another complexity is added by the question whether the entrepreneur is seen to create a

radically innovative product/service or also includes businesses which are not very

innovative and replicate existing ones. ‘Innovation’ can be defined in this context as new

expertise that an entrepreneur brings to the market, “whether through introducing a new or

improved product, a new method of production, a new market, a new source of supply or the

reorganisation of management”5.

2 EMN Glossary of Migration Terms Version 3.0, available at: http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/glossary/index_v_en.htm 3 Merriam Webster Dictionary http://www.merriam-webster.com/dictionary/entrepreneur 4 Ahmad et al., 2008, quoted in MAC 2015 5 Migration Advisory Committee (September 2015) ‘Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes, p. 16 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf (Accessed on 1 April 2016)

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf



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2 Overview of the admission schemes and policy context

This section provides a narrative comparative overview of the admission schemes for

migrant entrepreneurs including (i) introducing the residence permits, definitions and the

categories of persons covered, including when the schemes were adopted (ii) the policy

context of the adoption of the schemes (i.e. why it was adopted and what were the perceived

needs for it) and (iii) overview of the entrepreneurial culture and prerequisites for

entrepreneurship in the countries (e.g. whether they had already developed ecosystems,

ease of access to capital, and other particular prerequisites in the countries).

The blue box below presents the overall findings of Section 2.

Key Findings:

■ In all of the examined countries, with the exception of the United States, special visas

for start-ups and entrepreneurs have been introduced. These schemes widely vary in

terms of their characteristics and admission criteria. Furthermore, there are no

common definition of ‘start-up’ and ‘entrepreneur’ but rather these are shaped by the

specific entry conditions.

■ With regard to policy aims and policy context, the special visas/residence permits for

innovative entrepreneurs and start-ups introduced form part of wider national

strategies aiming to boost economic competitiveness, growth and the knowledge

economy.

■ Six (DK, FR, IE, IT, NL, ES) out of seven special schemes for ‘innovative’ start-ups

and entrepreneurs in the EU have been adopted very recently: 3 in 2015/2016 (DK,

FR, NL); 2 in 2014 (IT, ES) and 1 in 2013 (IE). The recent adoption does not provide

sufficient time to establish how the admission criteria have worked in practice – i.e.

whether they have been set too high/low and whether the desired audiences have

been targeted.

■ The experience of the UK scheme and international schemes with longer-standing

comparable schemes shows that the admission criteria of these schemes are

frequently adjusted to achieve the desired and reduce unintended effects. For

example, the UK scheme was subject to abuse which required the introduction of a

‘genuine entrepreneurship’ test. It should be noted that also one of the recently

introduced schemes (Ireland) was evaluated in 2014 one year after its introduction.

Several changes, including a reduced minimum investment for entrepreneurs were

introduced in order to make the scheme more attractive for entrepreneurs. It was

again evaluated in 2015, however the results are not publicly available as of this date.

■ As for the international schemes, in Canada, the previous programme ‘Federal

Immigrant Investor and Entrepreneur Programmes’ was abolished two years after its

introduction as it was considered to have limited economic impact. In Singapore, the

scheme first introduced in 2004, was revised and became more restrictive in 2013.

Lessons from international schemes shows that admission conditions of special

schemes for start-ups and entrepreneurs have been adjusted over time to enhance

their success and to come closer to achieve the desired results.

■ Generally, a yearly review of schemes seems to be helpful in identifying shortcomings

and adapting the schemes to changing needs.

■ Four types of schemes can be distinguished: (i) special visas/residence permits for

‘innovative entrepreneurs’; (ii) general self-employment activities; (iii) special start-up

schemes for graduates and (iv) umbrella residence permits which are targeted to a

wider group of TCNs


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2.1 Brief overview of categories of TCNs covered

This section provides a brief overview of the schemes, including the categories of migrants

covered, while their particular admission criteria will be reviewed in Section 3. The categories

of TCNs covered under different residence schemes vary significantly across EU Member

States and also the examined international schemes.

The categories of the TCNs covered under the particular residence permits/visas are

outlined in the last column in table 2.1 below. These can be summarised in the following

categories:

■ Special visas/residence permits for ‘innovative entrepreneurs and start-ups’: In all

of the examined EU Member States, special visas/residence permits for ‘innovative

entrepreneurs and start-ups’ exist. There are no encompassing definitions of ‘innovative

entrepreneur’ and ‘start-ups’ but these are defined by different admission criteria and

thresholds (which are examined in detail in Section 3). The threshold for ‘innovativeness’

(examined in detail in Section 3.1.5) is differently defined and set in EU Member States.

In two Member States, there are sectoral limitations - life science, ICT, design and clean-

tech and sustainable energy (DK) and ICT (IE).

With the exception of the United States (US), there are special visas for entrepreneurs in

place in all of the examined international schemes. Special international schemes for

entrepreneurs were adopted much earlier than those of EU Member States. Since 1976,

Australia has envisaged the category of foreign entrepreneur into the national legislation

and since 1999 in New Zealand and 2003 in Singapore, while in the EU the first scheme

was adopted in 2008 in the UK, followed by Ireland in 2012 and Spain in 2013.

■ Residence permits for general self-employment activities: In three EU Member

States (IT, NL, ES), residence permits for general self-employment activities (meaning

not limited to specific sectors or industries or requiring ‘innovation’) are in place in Italy,

the Netherlands and Spain. A self-employment permit existed in Denmark which was

abolished with the introduction of ‘Start-up Denmark’ scheme in 2015. The general

permits for self-employment are defined broadly to comprise a wide range of self-

employed activities, for example “TCNs who practice a profession or operate a business

on a self-employed basis” (definition NL) or “exercising industrial, professional, artisan or

commercial activity; or setting up corporations or partnerships” (definition IT). Under

Dutch legislation, the allowed legal forms are sole traders, general partnerships and

private limited liability companies. General self-employment visa/residence permits do

not exist in Ireland and the UK.

In the non-EU countries, only Canada has a self-employment permit (‘Self-employment

persons programme’) which is limited to farmers, cultural activity individuals and athletic

activity individuals.

■ Special start-up schemes for graduates: Special entrepreneurship schemes for

graduates have been introduced in Denmark (‘Establishment Card’ introduced in

January 2015), Ireland (12 month immigration permission also for foreign STEM

graduates introduced in 2014) and UK (‘Graduate entrepreneur’ established in 2008).

The Danish ‘Establishment Card’ is granted to TCNs who have a Danish master’s or a

PhD degree and want to establish a business with no sectoral limitations.

■ ‘Umbrella’ residence permits which are targeted to a wider group of TCNs:

‘Umbrella’ residence permits which comprise a wider group of TCNs are in place in two

EU Member States (FR and ES). In France, the ‘Residence Permit for Skills and Talents’

(to be replaced by the ‘Talent passport’ in November 2016) includes a wider range of 9

categories covered with entrepreneurs being one of them. Similarly, in Spain, the

national scheme introduced under the Law 14/2013 covers four categories of third


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country nationals, for whom the legislation facilitates entry and/or stay in Spanish

territory on grounds of economic interest: entrepreneurs, investors, highly qualified

workers and researchers.

■ Other types of permits: In the US, there is no special visa for start-ups or self-

employed apart from EB-5 visa which requires significant investment and thus more

suited to investors than entrepreneurs. It is also possible to enter on an HB-1 visa (for

highly qualified employees) if the person is the owner of a company, however, the

conditions are very restrictive. In the UK, it is possible under the Tier 1 Exceptional

talent visa to practice a self-employed activity. To be eligible the TCNs has to be

endorsed, and recognised, by the Home Office as a leader or an emerging leader in a

particular field. Applicants cannot work as a doctor, dentist in training or a professional

sportsperson or sports coach.


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Table 2.1 Brief overview and categories of migrant entrepreneurs covered under the schemes

Country Name of the scheme(s) Start date Brief overview and categories of migrants covered

Denmark

■ Start-up Denmark6

■ Establishment card

■ 1st January 2015


■ entrepreneurs with an innovative business idea with sectoral limitations

■ TCNs who have a Danish master’s or PhD degree who want to establish a

business, with no sector limitations

France

■ Paris French Tech Ticket

■ Residence permit for talent and competences

(until Sept 2016)/talent passport (from Nov

2016)

■ January 2016

■ November 2016

■ entrepreneurs from third countries who have innovative entrepreneurial

projects with international potential

■ ‘talented’ TCNs, including highly skilled

Ireland ■ Start-up Entrepreneur Programme (STEP)

■ STEP second track (12 months visa)


■ 2014

■ TCNs who have a business idea for a high potential start-up

■ start-ups that attend incubators or innovation boot camps

Italy

■ Start-up Visa for innovative start-up

entrepreneurs

■ A permit for autonomous work

■ 24th June 2014

■ 1988

■ foreign start-up entrepreneurs

■ TCNs intending to “exercising industrial, professional, artisan or commercial

activity; or setting up corporations or partnerships

The

Netherlands

■ Residence permit for 'start-up' entrepreneurs

■ Self-employment scheme


■ 2010

■ Entrepreneurs who (wish to) launch an innovative business

■ TCNs who practice a profession or operate a business in the Netherlands on

a self-employed basis

Spain

■ Residence permit under Law 14/2013 on

support for entrepreneurs and their

internationalisation

■ General self-employment permit

■ 27th September

2013

■ 2011

■ Entrepreneurial activity with innovative nature and specific economic interest

that the entrepreneurial activity must offer to Spain

■ self-employment activities

United

Kingdom

■ Tier 1 Entrepreneur

■ Tier 1 Graduate Entrepreneur

■ Tier 1 Exceptional Talent

■ 2008

■ 2008

■ 2008

■ applicants who are wanting to invest in the UK by setting up or taking over,

and being actively involved in the running of, one or more businesses in the

UK

■ graduates with strong business skills and/or ideas, and who are endorsed by

a UK Higher Education Institution (HEI) or UK Trade and Investment (UKTI)

■ a leader or an emerging leader in a particular field with exceptional talent

endorsed by the Home Office

Australia

■ Business and Innovation visa

■ Business talent visa (permanent)

■ 2003 (revised in

2012)

■ Established businesses with a minimum turnover (temporary and permanent

residence permits)

■ Established business owners with successful businesses applying from

6 Start-up Denmark scheme replaces the previous ‘Residence and work permit for the purpose of self-employment and to operate an independent company’


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Country Name of the scheme(s) Start date Brief overview and categories of migrants covered

outside Australia

Canada

■ Self-employed persons Programme

■ Start-up visa

■ 2013

■ 2013

■ Farmers, Cultural activity individuals and Athletic activity individuals

■ immigrant entrepreneurs with the necessary skills to build innovative

businesses in Canada that can create new jobs and compete on a global

level

Chile

Start-up Chile (divided into 3 strands)

■ S Factory Programme

■ Seed Programme

■ Scale Programme

■ 2010 ■ Pre-acceleration program for start-ups in early stage focusing in female

founders

■ human capital and entrepreneurships with high international perspective and

global growth

■ Existing performing start-ups

New Zealand ■ Entrepreneur Work Visa ■ 1999, modified in

March 2014

■ a temporary visa that allows a foreign citizen to buy or establish a business in

New Zealand

Singapore

■ EntrePass ■ 2004 (introduced),

revised (2013)

■ foreign entrepreneurs with innovative business proposals newly incorporated

or to be incorporated companies who wish to relocate to Singapore to

operate their business

United States

■ EB-5 Visa

■ E-1 and E-2 Treaty investors

■ H-1B visa

■ 1990

■ 1990

■ 1965 (modified in

1990)

■ Immigrant investors, certain thresholds for minimum investment apply

■ Investors with nationality subject to treaty

■ Highly qualified foreigners


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2.2 Policy context and perceived need(s) the schemes aim to address

2.2.1 EU Member States

With regard to the seven EU Member States examined, the special visas/residence permits

for innovative entrepreneurs and start-ups introduced form part of wider national strategies

aiming to boost economic competitiveness, growth and the knowledge economy.

Facilitating entrepreneurship by attracting foreign entrepreneurs has been envisaged in

policies across the examined EU Member States. The underlying policy aims as explicitly

defined by the Member States include:

■ Contribute to economic growth (DK, IT, ES, UK) – Specifically, in Italy, boosting

economic growth in the context of the economic crisis has been a driver for establishing

the scheme.

■ Contribute to international competitiveness (FR, NL, ES) - In the Netherlands, the

scheme has been introduced in the context of the target to be one of the top 5 most

competitive countries in the world based on the Global Competitiveness Index7.

■ Increase employment/creating jobs (DK, ES)

■ Boost innovative industries (UK)

In some Member States, applicants need to show that their business is in line with national

economic interest (see section 3.1.4) (DK, NL, ES) or is restricted to certain pre-defined key

industries (DK, IE) (see section 3.1.5).

Besides introducing the special schemes on entrepreneurship, Member States have adopted

a number of policy measures. Firstly, they have introduced special government

structures/functions to support entrepreneurship (e.g. NL and IE) .Secondly, funds

have been dedicated to support entrepreneurship (e.g. FR).

7 http://reports.weforum.org/global-competitiveness-report-2015-2016/economies/#indexId=GCI&economy=NLD

http://reports.weforum.org/global-competitiveness-report-2015-2016/economies/#indexId=GCI&economy=NLD


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Policy context of start-up visas/residence permits in EU Member States

In Denmark, the scheme targets entrepreneurs with an innovative business idea to grow

high impact start-ups in the country. Entrepreneurs to be attracted by the Start-up

Denmark scheme are start-ups with an innovative business idea, which can contribute to

growth and new employment in Denmark.

In France, the aim of the ‘Paris French Tech Ticket’ is to attract entrepreneurs from third

countries to set up in Paris. Through the programme, the government aims to 'who have

innovative entrepreneurial projects with international potential'’8. The government

introduced several initiatives to encourage start-up creation and innovation, including

investing €200 million in accelerators and incubators.

In Ireland, in 2014, key goals were set out in the National Policy Statement in

Entrepreneurship, including increasing the number of start-ups by 25%, increasing the

survival rate of start-ups in the first five years by 25% (1,800 more survivors each year)

and improving the capacity of start-ups to grow to scale by 25%. The government aims to

tap into the entrepreneurial pool of the migrant population that is already residing in

Ireland as well as to attract potential entrepreneurs from abroad. In the national strategy

for entrepreneurship the Irish government puts particular emphasis on support measures

and policy initiatives to “attract to Ireland talented entrepreneurs intending to create global

companies”9. Furthermore, entrepreneurs are supported through development agencies

of the government, namely Enterprise Ireland that helps high-potential start-up

enterprises to ‘start, grow, innovate and win export sales on global markets’.

The Italian Startup Visa was one of the measures contained in Growth Decree 2.0

(Decreto Crescita 2.0), issued on 18th October 2012 with the objective to boost the

national economy in a context of economic crisis by creating a facilitated regulatory

framework for innovative start-ups. Within this set of innovative measures, the Startup

Visa aimed at attracting foreign start-up entrepreneurs by creating an entry scheme

specifically targeted to them, which reduced the red-tape and facilitated access to

incubators.

In the Netherlands, the ‘Ambitious Entrepreneurship Action Plan’ aims at placing

Netherlands among the world’s top 5 most competitive economies. One of the measures

under the ‘Ambitious Entrepreneurship Action Plan’ is the Start-up Delta initiative10

established in January 2015. It is focused on strengthening the international position of

Dutch start-up businesses and attracting foreign start-up businesses to the Netherlands.

A Special Envoy Ambassador has been appointed for the purpose of promoting the

Netherlands and attracting start-up entrepreneurs.

In Spain, a needs assessment of the Spanish immigration policy carried out in 2012

showed a need to internationalise the Spanish economy, boost the presence of highly

skilled third country workers and attract foreign investment to Spain. This assessment

was carried out by a multidisciplinary team composed by representatives of the Ministry

of Employment and Social Security, the Ministry of Interior, the Ministry of Foreign Affairs

and Cooperation, including the Ministry of Economy and Competitiveness. The evaluation

identified the main challenges of the immigration regulation. For instance, the main

challenge identified for temporary residence and self-employed permits was the limited

8 French Tech Ticket (2016), “Get your ticket to Paris and launch your startup in a unique tech ecosystem”, http://www.frenchtechticket.paris/ (accessed 26 February 2016) 9 DJEI (2014), “National Policy Statement on Entrepreneurship in Ireland 2014”, Department of Jobs, Enterprise, and Innovation, Ireland. 10 Start-up Delta is an initiative formed with a multidisciplinary team from government officials from all layers of the Dutch government. The Ministry of Economic Affairs finances the initiative which has formed partnerships with corporates, educational systems and the financial world. This is a collaboration of government bodies, knowledge institutes, start-ups, financiers and businesses.

http://www.frenchtechticket.paris/


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intra-mobility within Spain because the activity of entrepreneurs was limited to a specific

geographic area (e.g. in Salamanca in the autonomous region of Castile and León) and

to a specific activity. After the identification of the need to foster intra-mobility between the

areas, the need to attract entrepreneurs by investing and creating new jobs was put

forward as a key solution to positively boost the Spanish economy.

The UK was the first country in Europe to introduce specific schemes designed to attract

migrant entrepreneurs. The scheme was designed with the aim to attract highly skilled or

innovative industries. The scheme has seen challenges in terms of fraud and setting up

non genuine businesses and is planned to be reformed to increase the average quality of

the applicants. The UK is currently considering setting up low volume highly selective

start up visa to attract the best talent.

2.2.2 International Schemes

Similar policy aims as those of the examined EU Member States (namely, boosting

economic growth, international competitiveness and the knowledge economy) were the

drivers in the introduction of the international schemes. This is with the exception of the US

where only legislative proposals for Start-up visa have been introduced but have not been

adopted.

In Australia and New Zealand, the schemes (which bear some similarities) were introduced

as part of wider migration frameworks which are selective and skill-based, whereby skills

are broadly defined and tested by points-based assessment. In New Zealand, as stated in

the Proposal of the Business Migration Review put forward by the Minister of Immigration,

business migration was seen as a key factor to foster the country’s economic development

and support the Business Growth Agenda.

In Canada, the economic objectives of the Canadian government are to develop further the

national labour market (in terms of increasing possibilities and the absorption of talents),

improve the economy structure, fill labour shortages and attract foreign entrepreneurs.

Following the Economic Action Plans 2012, the need of exploring ways to reform business

immigration and render it more flexible was emphasised. Under the Economic Action Plan in

2013, the Government launched a new Start-Up Visa pilot program for immigrant

entrepreneurs.

In Singapore, the EntrePass scheme was introduced in the context of moving from

traditional sectors which have been in decline, such as shipping, shipbuilding, and

commodities. In order to maintain economic vitality the government aims to foster growth in

emerging sectors, notably information technology and e-commerce. The scheme is also part

of Singapore’s general plan to become a regional business hub and attract the best

entrepreneurial minds to the country.

2.3 Entrepreneurial culture and prerequisites for entrepreneurship

Entrepreneurial culture can be understood as an environment where someone is motivated

to innovate, create and take risks. While no specific definition of entrepreneurship exists,

most studies conclude that it centres on the discovery of commercial opportunities by

creative individuals. A level of complexity derives from the concept's linkage, on the one

hand, with other concepts such as innovation, the knowledge economy, the digital society,

and on the other hand with similar but nuanced notions - self-employment, new business

formation and SMEs. Entrepreneurship is typically considered identical with business start-

ups or the creation of new organisations despite the fact that these concepts are not

synonymous.11 In terms of the structure and types of activities, there is a broad range of

11 Shane, Scott (2003), A general theory of entrepreneurship : the individual – opportunity nexus (Cheltenham:

Edward Elgar); Stam, Erik et al.(2007), ‘High growth entrepreneurs, public policies and economic growth’, Jena economic research papers


16

entrepreneurial ventures from one-person companies to co-operatives, from high-tech new

start-ups to traditional workshops.

The entrepreneurial economy is defined as ‘the political, social and economic response to an

economy dictated not just by the dominance of the production factor of knowledge but also

by entrepreneurship capital or the capacity to engage in and generate entrepreneurial

activity’12. Entrepreneurship capital, in terms of the capacity to harness new ideas by

creating new enterprises, is seen also essential to economic output.13 As examined in this

sub-section below, the entrepreneurial culture plays a key role in attracting migrant

entrepreneurs.

In addition to narrative overview of the entrepreneurial culture and attitudes in the countries

under examination, this section includes international rankings and statistics (e.g. from

OECD, World Bank, international indexes on entrepreneurship, examples of hubs and

successful star-ups). These are subsequently outlined below. Finally, a summary section

looks at all the elements combined together.

2.3.1 Prerequisites for entrepreneurship

Prerequisites for entrepreneurship can include a number of elements, including (i) supportive

business environment in terms of, inter alia, business-friendly government policies and

access to capital; (ii) entrepreneurial capabilities – such as existence of hubs and available

technology/labour as well as (iii) the overall attitudes towards entrepreneurial activities,

including the fear of risks and failure. In this respect, this section examines the following

three elements:

■ Supportive business environment – including, inter alia, ease for starting up a

business, accessibility to capital, administrative burdens, labour market regulations and

government policies/attitude towards entrepreneurship;

■ Entrepreneurial capabilities – including, inter alia, infrastructure, trainings, education,

research, innovation and technological cooperation (e.g. existence of tech hubs);

■ Attitudes towards entrepreneurship – including, inter alia, the attitude of individuals

towards entrepreneurship, the view of individuals and the society of choosing

entrepreneurship as a career choice.

Each of these factors is elaborated in turn below.

2.3.1.1 Supportive business environment Supportive business environment is essential for starting up a business and for boosting

entrepreneurship. Supportive environment conducive to business needs can include a

number of aspects, including ease for starting up a business, accessibility to capital,

administrative burdens, labour market regulations and government attitude towards

entrepreneurship. While an in-depth analysis of all these elements is beyond the scope of

this report, a high level overview is presented in this section below.

The table 2.2 below provides an overview of how the examined EU and non-EU countries

fared globally in international rankings, including World Bank Ease of doing business index

201514, World Economic Forum Competitiveness Ranking15, the Global Entrepreneurship

Monitor16 and the Ernst & Young Entrepreneurship Barometer 2013. It should be highlighted

that the rankings in table 2.2 have different methodologies – however, trends and similarities

can be observed across the countries.

12 Audretsch and Thurik (2004), p.2 13 Audretsch and Keilbach (2004), p.949 14 http://data.worldbank.org/indicator/IC.BUS.EASE.XQ/countries?order=wbapi_data_value_2015%20wbapi_data_value%20wbapi_data_value-last&sort=asc&display=default 15 http://reports.weforum.org/global-competitiveness-report-2015-2016/competitiveness-rankings/ 16 http://www.gemconsortium.org/data/sets

http://data.worldbank.org/indicator/IC.BUS.EASE.XQ/countries?order=wbapi_data_value_2015%20wbapi_data_value%20wbapi_data_value-last&sort=asc&display=default


http://reports.weforum.org/global-competitiveness-report-2015-2016/competitiveness-rankings/

http://www.gemconsortium.org/data/sets


17

Table 2.2 Supportive business environment by country

Country Ranking Ease of doing business

Ranking Ease of starting a business

World Economic Forum Competitiveness Ranking

Access to entrepreneurial finance (GEM)17

EY G20 Barometer 2013 Entrepreneurship culture

EU MEMBER STATES

Denmark 3 29 12 N/a N/a

France 27 32 22 N/a 9

Ireland 17 25 24 4 N/a

Italy 45 50 43 36 13

Netherlands 28 28 5 3 N/a

Spain 33 82 33 35 N/a

United Kingdom 6 17 10 6 6

NON-EU COUNTRIES

Australia 13 11 21 39 5

Canada 14 3 13 9 3

Chile 48 62 35 48 N/a

New Zealand 2 1 16 N/a N/a

Singapore 1 10 2 N/a N/a

United States 7 49 3 5 1

17 Global Entrepreneurship monitor covers results based on 60 economies completing the Adult Population Survey (APS) and 62 economies completing the National Expert

Survey (NES).


18

According to the World Bank Ease of doing business index 201518, five of the six

international countries examined in this report have scored very high in the top 20 positions

of the ranking while from EU Member States, only Denmark, UK and Ireland are included in

top 20 of the ranking. The ease of doing business is measured through indicators such as

ease of starting a business, registering a property, getting credit, protecting minority

investors or trading across borders19. The lowest scores from the examined countries are for

Spain and Italy which also score considerably low in the ranking of ease of starting a

business - Spain scores 82nd place and Italy 50th respectively. Most of the international

countries fared better in comparison to their EU counterparts (see table above).

Overall, when considering all rankings in the table above, the selected non-EU countries fare

better than the selected EU countries in the business rankings. In particular, Singapore,

New Zealand and the United States have ranked first or second in some of the rankings.

New Zealand has a positive entrepreneurship environment with a focus on producing new

ideas and can-do approach20. The government has launched the Business Growth

Agenda21, including research and development science as one of the core pillars to support

entrepreneurs. Singapore government has allocated S$16 million (€10 million) to support

Singapore's research, innovation and business ecosystem22. In the United States, the

entrepreneurship ecosystem is facilitated via a wide-ranging support, flexible labour markets

and strong government support23. Next to Singapore, New Zealand and the US, Canada and

Australia has also fared very well ranking in top 20 positions, while Chile has remained the

outlier ranked 62nd in the World Bank ease of staring business ranking and 48th in access to

entrepreneurial capital. The business environment in Australia is characterised by easy

start-up regulations, and liberal tax subsidies support the entrepreneurial ecosystem24. In

Canada, the incentives of starting a new business are facilitated via a very low cost of

insolvency in Canada (the lowest among the G20 countries) and the country’s weight on a

culture of research and innovation25. The Canadian government also encourages the

entrepreneurship culture through building new partnership with the venture capital sector.

With regard to EU countries, the top performers across the different rankings are Denmark,

the Netherlands and the United Kingdom. Denmark has ranked third in the World Bank’s

ease of doing business 2015 ranking, while UK has ranked sixth respectively. The conditions

for entrepreneurship in Denmark are ranked 10th among the OECD countries and the public

system in Denmark is considered as one of the least bureaucratic worldwide. The

Netherlands is one of the top twenty largest economies in the world26 and is ranked the 4th

knowledge economy by the World Bank27. A number of prerequisites are in place, including

government regulation and policies to boost entrepreneurship as well as relatively easy

access to financing (the Netherlands ranked 3rd in the GEM ranking on access to finance –

see table below). Compared with many other G20 countries, the environment for

entrepreneurs in the UK is a favourable one. New and growing ventures operate on a solid

foundation of business-friendly regulations, generous tax subsidies, good availability of skills

from a solid education system and the country’s dynamic financial markets. All of this gives

the country an edge and has led to high levels of new business activity, relative to many

18 http://data.worldbank.org/indicator/IC.BUS.EASE.XQ/countries?order=wbapi_data_value_2015%20wbapi_data_value%20wbapi_data_value-last&sort=asc&display=default 19 The World Bank (2016b), “Doing Business 2016, Economy Profile Denmark 2016”, The World Bank 20 New Zealand investment advantage https://www.nzte.govt.nz/en/invest/new-zealands-investment-advantage/ 21 Business Growth Agenda http://www.mbie.govt.nz/info-services/business/business-growth-agenda 22 Ibid 23 Ibid 24 The EY G20 Entrepreneurship Barometer 2013, available at: http://www.ey.com/Publication/vwLUAssets/EY-G20-country-report-2013-Australia/$FILE/EY-G20-country-report-2013-Australia.pdf 25 The EY G20 Entrepreneurship Barometer 2013 available at: http://www.ey.com/CA/en/Services/Strategic-Growth-Markets/G20-Entrepreneurship-Barometer-2013-Entrepreneurship-culture 26 World Bank (2015) World GDP Ranking, available at: http://knoema.com/nwnfkne/world-gdp-ranking-2015-data-and-charts 27 World Bank, Knowledge Economy Index (KEI) Ranking, available at: http://data.worldbank.org/data-catalog/KEI



https://www.nzte.govt.nz/en/invest/new-zealands-investment-advantage/

http://www.mbie.govt.nz/info-services/business/business-growth-agenda

http://www.ey.com/Publication/vwLUAssets/EY-G20-country-report-2013-Australia/$FILE/EY-G20-country-report-2013-Australia.pdf

http://www.ey.com/Publication/vwLUAssets/EY-G20-country-report-2013-Australia/$FILE/EY-G20-country-report-2013-Australia.pdf

http://www.ey.com/CA/en/Services/Strategic-Growth-Markets/G20-Entrepreneurship-Barometer-2013-Entrepreneurship-culture

http://www.ey.com/CA/en/Services/Strategic-Growth-Markets/G20-Entrepreneurship-Barometer-2013-Entrepreneurship-culture

http://knoema.com/nwnfkne/world-gdp-ranking-2015-data-and-charts


http://data.worldbank.org/data-catalog/KEI


19

other G20 economies. Given the United Kingdom’s difficulties in tackling its high rate of

unemployment and low economic growth, supporting the growth of fast-growing and

innovative businesses is vital. These three EU Member States are followed by France and

Ireland, while Italy and Spain have fared worse across all rankings in comparison to all EU

and non-EU countries with the exception of Chile only. In France, the level of taxation is

seen as an obstacle to entrepreneurship, both in terms of its direct effects on entrepreneurs,

and as a symbol of the country’s relative unease with private enterprise. Business taxes are

above the average for mature economies28 In Italy, identified weaknesses mainly concern

the institutions, the macroeconomic environment, the labour market efficiency and the

development of financial market. According to the Global Entrepreneurship Monitor, Italy

ranked worse than the big European countries across almost all aspects of the

entrepreneurial ecosystem. Government policies, government programs and entrepreneurial

education were singled out as particularly lacking.29 The Spanish regulation was considered

as an obstacle for the attraction of talent, as well as for foreign entrepreneurs30. Spain was

experiencing the lowest rate of foreign entrepreneurship of all EU countries. The

entrepreneurial culture has developed over the years, and the position of Spain in the GEM

classification has progressively improved in comparison with other European countries31.

This improvement is mainly due to the economic situation accompanied with the

development of new business opportunities. Moreover, the Spanish government has made a

lot of efforts to promote entrepreneurial spirit. However, the GEM report in 2014 revealed

that the percentage of entrepreneurs who launch businesses were faced with difficulties in a

labour market access in recent years32.Entrepreneurs are also confronted with constraints by

burdensome bureaucracy and a heavy tax burden. Financing for entrepreneurs is seen as

difficult because there is restricted access to credit and a lack of cash flow in companies33.

2.3.1.2 Entrepreneurial capabilities

Entrepreneurial capabilities refer to the extent to which there are prerequisites in place to

start a business and other conditions in the countries which can attract potential

entrepreneurs, such as existence of technology hubs, links with universities and

accelerator/incubator programmes, infrastructure, trainings, education, research, innovation

and technological cooperation, etc. The aspects considered in this section include:

■ Innovation and culture predisposing to innovate

■ Existence of technology hubs and clusters

■ Partnerships with universities and university accelerators

■ infrastructural prerequisites (e.g. transport links, widespread knowledge of English, high

speed broadband)

■ standard of living

With regard to innovation and innovative culture, the World Economic Forum ranking on

innovation34 is a key measurement which is based on a number of indicators, including inter

alia, the quality of scientific research institutions, spending on R&D, patent applications and

university-industry collaboration. As it can be seen from table 2.3 below, US ranks 4th in the

ranking, followed by the Netherlands and Singapore. Demark and the UK also score highly

while the outliers are Italy (32nd place), Spain (37th place) and Chile (ranked 50th).

28 Ibid 29 http://www.gemconsortium.org/country-profile/74 30 Until 2010, according to the OECD report “Open for Business study” 31 Spanish good practice in entrepreneurship policies design and deli8ve, available at: https://www.oecd.org/cfe/leed/40208821.pdf 32 Stable levels of entrepreneurial activity - albeit lower than pre-crisis levels and the European average, available at: http://www.gemconsortium.org/country-profile/109 33 Ibid. 34 http://reports.weforum.org/global-competitiveness-report-2015-2016/competitiveness-rankings/

http://www.gemconsortium.org/country-profile/74

https://www.oecd.org/cfe/leed/40208821.pdf


http://reports.weforum.org/global-competitiveness-report-2015-2016/competitiveness-rankings/


20

Table 2.3 Innovation ranking od World Economic Forum

Country Innovation (World Economic Forum)

EU Member States

Denmark 10

France 18

Ireland 21

Italy 32

Netherlands 8

Spain 37

United Kingdom 12

Non-EU Countries

Australia 23

Canada 22

Chile 50

New Zealand 24

Singapore 9

United States 4

With regard to innovation and technology hubs, this is evident in the case of the United

States with the Silicon Valley - home to many of the world's largest high-tech corporations

and thousands of start-up companies.

In Europe, prominent locations include Paris, Amsterdam and London. For example, Paris is

seen as a world leader in the innovation economy and the third most appealing city for

foreign investment35. Many successful start-ups such as the car sharing platform Blablacar

being one of the five most valuable start-ups in Europe36 or the streaming platform Deezer37

have been developed in France. There are around 4,000 start-ups located in Paris, and in

2016 the world’s largest digital business incubator is scheduled to open its doors to 1,000

start-ups with support of the Paris municipality38. Entrepreneurship is a desirable career

choice in France and it is perceived positively in the French society39. The ecosystem ‘La

French Tech’ that is made up of entrepreneurs, investors, engineers, designers, developers,

media, and government agencies is working towards start-up growth in France and

international promotion of France as desirable location for high growth start-ups. However,

France has plenty of potential as a source of innovative and competitive new ventures, but

has struggled to convert this into solid support for its entrepreneurs.40 According to some

sources, an important part of the problem appears to be the lack of a cultural foundation for

entrepreneurship.41

35 Goube, Josephine (2015), “French Startup Visa: 1,400 foreign entrepreneurs knocking on the doors of Paris”, http://blog.migreat.com/2015/09/21/french-startup-visa-1400-foreign-entrepreneurs-knocking-on-the-doors-of-paris/?preview_id=3622 (accessed 26 February 2016) 36 BlaBlaCar (2016), “BlaBlaCar at a Glance” https://www.blablacar.co.uk/blog/blablacar-about (accessed 29 February 2016) 37 Deezer (2016), “About”, http://www.deezer.com/company/about (accessed 29 February 2016) 38 1000start-ups (2016), “Welcome to the world’s largest digital business incubator”, http://1000startups.fr/?lang=en (accessed 29 February 2016) 39 GEM (2013), “High entrepreneurial desires but very low perception of entrepreneurial competences”, http://gemconsortium.org/country-profile/62 (accessed 29 February 2016) 40 http://www.ey.com/Publication/vwLUAssets/EY-G20-country-report-2013-France/$FILE/EY-G20-country-report-2013-France.pdf 41 For example Ibid

https://en.wikipedia.org/wiki/Technology_company

https://en.wikipedia.org/wiki/Startup_company

http://blog.migreat.com/2015/09/21/french-startup-visa-1400-foreign-entrepreneurs-knocking-on-the-doors-of-paris/?preview_id=3622


https://www.blablacar.co.uk/blog/blablacar-about

http://www.deezer.com/company/about

http://1000startups.fr/?lang=en

http://gemconsortium.org/country-profile/62

http://www.ey.com/Publication/vwLUAssets/EY-G20-country-report-2013-France/$FILE/EY-G20-country-report-2013-France.pdf

http://www.ey.com/Publication/vwLUAssets/EY-G20-country-report-2013-France/$FILE/EY-G20-country-report-2013-France.pdf


21

In the UK, London itself is a major draw for migrants and has been described as Europe’s

technology capital offering local ecosystems supporting innovative start-ups.

With regard to partnerships with universities and accelerators in universities, this is

seen as very strong in the Netherlands. Universities and research centres play a crucial role

in innovation and generating start-ups. There are a number of established innovation and

technology hubs and clusters, including, inter alia, Rotterdam, Delft and Hague for clean-

tech, aerospace and cybersecurity; Amsterdam for the creative and graphic industry; Twente

and Leiden for bio science, med-tech, nanotechnology and pharma. For example,

universities in the Twente region have incubated the highest number of start-ups in Europe

(2,000+) and several have scaled-up into global brands: such as, Booking.com,

TakeAway.com, Demcon, Drukwerkdeal.nl, and Xsens 3D motion tracking. Another example

is the Leiden Bio Science Park which has built a large, vibrant ecosystem welcoming

collaboration with innovative life-science start-ups and established companies. There are

dedicated incubator buildings close to the research facilities at Leiden University and Leiden

University Medical Centre.

Other infrastructural prerequisites include inter alia transport links, widespread

knowledge of English, or high speed broadband. Standard of living can also be a

critical point for attraction. A combination of these factors is evident in Denmark and the

Netherlands.

In Denmark, the entrepreneurship environment is described as progressive and open with a

large number of creative entrepreneurs. Further, several hubs in the creative industry and

Information and Communication Technologies (ICT) are present42. The geographical location

is favourable and Denmark is connected with other Scandinavian countries in the field of

technology start-ups. The flexible working culture and the high standards of living in

Denmark contribute favourably for innovative entrepreneurs43.

Similarly in the Netherlands, a number of prerequisites play a key role in attracting start-ups

and entrepreneurs in the Netherlands, including, inter alia, more than ten already established

start-up and tech clusters; Europe’s highest internet speed and the second-highest

broadband penetration (the share of users having broadband connection); excellent

transport links (including via sea, rail and air) to Europe and the rest of the world, and

widespread knowledge of English (more than 90% of the population speaks English).44

On the other hand, countries which lag behind – such as Italy and Spain – show signs of

residual structural issues and lack of some of the infrastructural factors. For example, in

Italy, according to EY G20 Eurobarometer 2013 27% of entrepreneurs surveyed

acknowledged that Italy has a supportive entrepreneurship culture. Despite the efforts of

Italian government to improve the entrepreneurship ecosystem via business incubators, and

networks and mentoring schemes, the country’s entrepreneurship performance is low.45 This

low performance is accompanied with weak performance on innovation. Italy’s spending

towards research and development (R&D) is inferior to the average for G20’s developed

economies46.

2.3.1.3 Attitudes towards entrepreneurship and risk-taking culture

Entrepreneurial culture is a key element of the entrepreneurial environment47. It affects the

attitude that individuals have towards entrepreneurship, the view of choosing

entrepreneurship as a career choice, the view of failing with a business, the ambitions to

42 See also section 2.1.2 in this report 43 http://www.startupdenmark.info/why-denmark/ (accessed 16 February 2016) 44 http://www.startupdelta.org/about/faq 45 Ibid 46 Ibid 47 EY G20 Entrepreneurship culture, available at : http://www.ey.com/GL/en/Services/Strategic-Growth-Markets/EY-G20---Entrepreneurship-culture

http://booking.com/

http://www.takeaway.com/

http://www.demcon.nl/en/

http://www.drukwerkdeal.nl/nl/info/gewoonindrukwekkend

https://www.xsens.com/

http://www.startupdenmark.info/why-denmark/

http://www.startupdelta.org/about/faq

http://www.ey.com/GL/en/Services/Strategic-Growth-Markets/EY-G20---Entrepreneurship-culture

http://www.ey.com/GL/en/Services/Strategic-Growth-Markets/EY-G20---Entrepreneurship-culture


22

succeed, or the support provided to family a members to create a business48. Capability to

start and maintain entrepreneurial activity is different for each country analysed. There were

various reasons of the differences, but the cultural aspect is a dominant factor.

As per Figure 2.1, the country with the highest rate of perceived opportunity is Chile (67%)

followed by Denmark (60%), Canada (56%) and the US (51%). In Italy and Spain,

perceived opportunities were low, 27% and 23% respectively.

The countries where the perceived capabilities were the highest are: Chile (65%), the

United States (53%) followed by Canada (49%) and Spain (48%). A high perception of fear

of failure is found in Italy (49%), Denmark and France (41%) followed by Ireland and

Australia (39%).

Since 2011, Chile’s authorities have made efforts to increase the entrepreneurial culture and

facilitate the growth of innovative business49. Additionally, different actors continue to provide

programmes (education initiatives, training, financial support) and policies to motivate young

entrepreneurship. In Chile, there is a positive perception of entrepreneurship - 67% of the

population perceives the opportunity to start a business as very positive. 26.8% of Chile’s

adult population has already been involved in early stage entrepreneurial activity, thus being

the highest percentage of adult entrepreneurs of the OECD countries and one of the highest

in the region50. Despite the strong entrepreneurship perception in Chile, the culture of

starting a new business has not a background of risk-taking. The US has a highly favourable

entrepreneurial environment among the G20 countries (ranked the first)51. It is a country

where the entrepreneurial spirit flourishes and the entrepreneurship culture is considered as

a component of the country’s DNA52. Moreover, the attitudes towards the business failure

was considered positive (30%). It also scored high (65%) in terms of people’s willingness of

considering the entrepreneurship as a career path53.

Interestingly and in contrast to the general belief that Asians are highly risk hostile,

Singapore respondents showed only moderate fear of failure (39%)54.

Canada offers a highly supportive culture for entrepreneurship, especially in relation to the

entrepreneurship as a good career choice55. In addition, successful entrepreneurs enjoy high

status and the Canadian media is very attentive to the innovation and creativity56. Among

the positive support towards the entrepreneurship within Canadian culture, the following are

highlighted57:

■ Highly positive support of individual success;

■ Encouragement toward creativity and innovation; and

■ Encouragement of new business and personal initiatives.

48 Ibid 49Innovation: The Case of Chile, 2013 available at: http://www.americasquarterly.org/content/innovation-case-chile 50 Ibid 51 The EY G20 Entrepreneurship Barometer 2013 – United States available at: http://www.ey.com/Publication/vwLUAssets/EY-G20-country-report-2013-US/$FILE/EY-G20-country-report-2013-US.pdf 52 Ibid 53 Op. cit EY G20 Entrepreneurship Barometer 2013, page 7. 54 Entrepreneurial scene in Singapore remains lively with TEA rates above 10% for the past three years available at: http://www.gemconsortium.org/country-profile/105 55 CBC news, Business - Entrepreneurship in Canada ranks 2nd in world, report says http://www.cbc.ca/news/business/entrepreneurship-in-canada-ranks-2nd-in-world-report-says-1.3093290 56 Ibid 57 Ibid

http://www.americasquarterly.org/content/innovation-case-chile

http://www.americasquarterly.org/content/innovation-case-chile

http://www.ey.com/Publication/vwLUAssets/EY-G20-country-report-2013-US/$FILE/EY-G20-country-report-2013-US.pdf



http://www.cbc.ca/news/business/entrepreneurship-in-canada-ranks-2nd-in-world-report-says-1.3093290


23

Figure 2.1 Perception towards entrepreneurship

Source: ICF based on the data of Global Entrepreneurship Monitor (GEM) 2014, available at

http://dx.doi.org/10.1787/888933231360. Note: Data on Singapore and New Zealand were not

available.

According to the data from GEM, the attitudes towards entrepreneurship vary in different

countries as Error! Reference source not found. below illustrates:

Figure 2.2 Attitudes towards entrepreneurship

Source: ICF based on the data of Global Entrepreneurship Monitor (GEM) 2014 available at:

http://dx.doi.org/10.1787/888933231376 Note: Data on Denmark, Singapore and New Zealand were

not available.

According to the data above, the highest positive perception of entrepreneurship as a good

career choice is led by the Netherlands (79%), followed by Chile (69%), Italy and the US

(65% respectively). Ireland is the country with the lowest perception of entrepreneurship as

a good option for career (49%). However, Ireland scores the highest together with US (77%)

in terms of the consideration to successful entrepreneurs. UK (75%), Italy (72%) and France

(70%) give also a high status to successful entrepreneurs. Media devotion for entrepreneur

activities is found to score a high percentage in Ireland (77%), followed by the US (75%) and

Australia (73%).

http://dx.doi.org/10.1787/888933231360

http://dx.doi.org/10.1787/888933231376


24

2.3.2 Overview of entrepreneurship culture performance

As seen in section 2.3.1, countries can widely differ across a number of aspects forming the

entrepreneurial culture. The entrepreneurial culture is a complex phenomenon and is formed

of a number of elements. Firstly, the business environment comprised of the regulatory

business framework, level of bureaucracy and administrative burden, access to capital, etc.

differs across the examined EU and non-EU countries. Some countries have undertaken

efforts to ease any burden on businesses (see section 2.3.1.1.). Secondly, the

entrepreneurial capabilities in the countries play an important role in terms of a stimulating

milieu to start-up a business including innovation, existence of technology hubs and clusters,

links with universities, infrastructural prerequisites and standard of living. The final element is

attitudes towards risk, fear of failure and proneness to start-up a business. These elements

are outlined as ‘strong, moderate, and weak’ per country in table 2.4 below.

Table 2.4 Summary of aspects forming entrepreneurial culture per country

Country Supportive business environment

Entrepreneurial capabilities Attitudes towards entrepreneurship

Denmark

Strong

- ranked 3rd for ease of doing business

- on of the least

bureaucratic

systems

Strong

- top 10 in innovation - hubs and creative industries - flexible working culture

- high living standards

Strong

- high attitudes towards

entrepreneurship

France

Moderate

- ranked 27th for

ease of doing

business

- ranked 22nd on

competitiveness

Moderate

- Paris seen as one of the

world leaders for innovative

economy

- Potential hasn’t been

converted into reality

Moderate

- High perception of fear of

failure (41%)

- lack of a cultural foundation

for entrepreneurship

Ireland

Moderate

- ranked 25th on

ease of starting a

business

Moderate

- ranked 21st on

innovativeness

Weak

- Fear of failure relatively high

(39%)

- Low perception of

entrepreneurship as a good

option for career (49%)

Italy

Weak

- ranked 45th in

ease of doing

business

- ranked 50th of

ease in starting a

business

Weak

- weak performance on

innovation

- Italy’s spending towards

research and development

(R&D) is inferior to the

average for G20’s developed

economies

- only 27% of entrepreneurs

surveyed acknowledged that

Italy has a supportive

entrepreneurship culture

Moderate

- High perception of fear of

failure (49%)

- high status of successful

entrepreneurs

Netherlands

Moderate/ Strong

- Ranked 28th in

ease of starting

and ease of doing

business

- ranked 3rd in

access to

entrepreneurial

Strong

- ranked 8th in innovation

- universities and research

centres play a crucial role in

innovation and generating

start-ups

Strong

- positive perception of

entrepreneurship as a career

choice


25



capital

Spain

Weak

- ranked 82nd for

ease of starting a

business

Weak


Moderate

- Fear of failure 38%

United Kingdom

Strong

- Ranked 6th in

ease of doing

business; access

to entrepreneurial

capital and EY20

Barometer

Strong

- Ranked 6th in innovation

(world economic forum

ranking)

- London itself is a major

draw for migrants and has

been described as Europe’s

technology capital offering

local ecosystems supporting

innovative start-ups

Strong

- attitudes towards

entrepreneurship are very

positive

Australia

Moderate

- ranked 11th in

ease of starting a

business

- ranked 39th in

access to

entrepreneurial

finance

Moderate

- ranked 23rd in innovation

Moderate

- Relatively high perception of

fear of failure (40%)

Canada

Strong

- Ranked 3rd in

ease of starting a

business

- the incentives of

starting a new

business are

facilitated via a

very low cost of

insolvency in

Canada (the

lowest among the

G20 countries)

Strong

Strong

- offers a highly supportive

culture for entrepreneurship,

especially in relation to the

entrepreneurship as a good

career choice58. In addition,

successful entrepreneurs

enjoy high status and the

Canadian media is very

attentive to the innovation and

creativity

Chile

Weak

- ranked 62nd for

ease of staring

business

-ranked 48th in

access to

entrepreneurial

capital

Weak


Moderate

- a positive perception of

entrepreneurship - 67% of the

population perceives the

opportunity to start a business

as very positive

- Despite the strong

entrepreneurship perception

in Chile, the culture of starting

a new business has not a

background of risk-taking

New Zealand

Strong

- Ranked 1st in

ease of starting a

Strong

Strong

Positive perception towards

entrepreneurship

58 CBC news, Business - Entrepreneurship in Canada ranks 2nd in world, report says http://www.cbc.ca/news/business/entrepreneurship-in-canada-ranks-2nd-in-world-report-says-1.3093290

http://www.cbc.ca/news/business/entrepreneurship-in-canada-ranks-2nd-in-world-report-says-1.3093290


26



business and 2nd

in ease of doing a

business

Singapore Strong

- Ranked 1st in

ease of doing a

business

Strong


Moderate

Moderate fear of failure (39%)

United States

Strong

- ranked in top

positions across

most rankings

Strong

- ranked 4th on innovation

- Silicon Valley and tech hubs

Strong

Positive perception towards

entrepreneurship

Based on of the different elements of entrepreneurial culture and a number of examined

sources59, the 13 countries compared give a different weight to the entrepreneurship culture.

The results are presented in Table 2.5 below. The countries which exhibit strong

entrepreneurial culture across the three elements are Denmark, the Netherlands, the

United Kingdom (EU countries) and Canada, New Zealand and the US, followed by

moderate entrepreneurship culture of France and Ireland (EU countries) and Australia and

Singapore (non-EU countries). Finally, weak entrepreneurial culture (despite efforts to

promote entrepreneurship) is found in Italy and Spain (EU countries) and Chile (non-EU

countries).

Table 2.5 Entrepreneurship culture performance

Country Strong entrepreneurship culture

Moderate entrepreneurship culture

Weak entrepreneurship culture

EU Member States

Denmark √

France √

Ireland √

Italy √

The

Netherlands

√

Spain √

United

Kingdom

√

Non-EU Countries

Australia √

Canada √

Chile √

New Zealand √

Singapore √

United States √

Source: ICF based on the country fiches and statistics from the OECD, the World Bank, the Global

Entrepreneurship Monitor (GEM) and EY G20 Barometer

59 Inter alia World Bank, the Global Entrepreneurship Monitor (GEM), OECD, and EY G20 Barometer


27

3 Admission criteria for migrant entrepreneurs under the examined schemes

This section provides a comparative overview of the admission criteria under the EU and

international schemes. To allow for comparison and given the primary focus of this overview,

the special residence permits for start-ups and ‘innovative entrepreneurs are reviewed

separately (Sections 3.1, 3.2 and 3.3) from the general self-employment permits (Section

3.4).

3.1 Characteristics of the examined schemes and entry conditions for ‘innovative entrepreneurs’

This section provides an overview of the entry conditions of the admission schemes. As

highlighted in Section 2 above, there are no encompassing definitions of ‘innovative

entrepreneur’ and ‘start-ups’ but rather these schemes are defined by different admission

criteria which are examined below. Figure 3.1 illustrates the main characteristics of the

residence permits for ‘innovative entrepreneurs'.

Figure 3.1 Main characteristics of residence permits/visas for ‘innovative entrepreneurs’

Source: ICF


28

The examined schemes for migrant entrepreneurs can be characterised according to the

following elements:

■ Quotas: In the examined EU Member States, quotas restricting the numbers of

applicants who can be granted the permit/visa are in place in France for the Paris Tech

Ticket and UK for Tier 1 Graduate Entrepreneurship Programme. Under the examined

international schemes, this is the case for Canada, Chile and the US. There is a clear

correlation between setting up quotas and providing funding under the support schemes

of the visas (examined under Section 3.3 below). In the two countries where funding is

provided to entrepreneurs (France and Chile), there are annual quotas set in place – 50

for the Paris Start-up Ticket and 200-250 for Start-up Chile.

■ Points-based systems: Points-based systems provide flexibility whereby the applicants

can score points across different criteria. In the examined EU Member States, this is the

case in Denmark and the UK60, while points-based systems for admission of

entrepreneurs and start-ups are also in place in Australia and New Zealand. While in

the rest of the countries, applicants can score points under a range of categories (e.g.

innovative business plan, age, business experience, etc.), in the UK – where the system

is based on minimum capital – points are predominantly given for funds and their

accessibility/availability. (see corresponding sub-section below for details)

■ Minimum capital required: One of the most common requirement is capital

required/funds available for setting up the business. This is the case in four of the seven

examined EU Member States – FR (Talent passport), IE, IT, UK and in five of the six

examined international schemes: Australia, Canada, New Zealand, Singapore, US

(EB-5 visa). In these countries, a minimum capital defined per country is a necessary

requirement to obtain the visa. In addition, some countries require proof of subsistence

(DK, FR, IE, IT, UK, Australia, Canada, US).

■ Funding provided: In two countries – France and Chile – funding is provided to start-

ups. In France, 50 selected start-ups per annum each receive €12,500 while in Chile, the

programme has three strands where 200-250 applicants per annum receive €13.000;

€26.000 and €78.000.

■ Innovation requirement: With the exception of the UK, residence permits for ‘innovative

entrepreneurs and start-ups’ in the examined EU Member States and the majority of the

international schemes require the element of ‘innovation’ to be met. There are no

common definitions of ‘innovative entrepreneurs/start-up’ across the Member State as

this is defined based on certain criteria. The most common requirement is to

demonstrate in the business plan that the product, service or process (to be) launched is

innovative. The understanding of innovation can also be linked to particular industries,

such as ICT, sustainable and clean energy, life science, etc.

■ Facilitator-driven: Canada and the Netherlands are the two countries where working

with facilitator is a requirement to obtain the visa. In Italy, the residence permit

application can be launched via certified incubator but this is not a necessary

requirement. The facilitator must be a legal entity which must have established track

record and be approved by the relevant authorities. Its role is to provide the start-up with

guidance as well as in some instances funding. In return, the facilitator gets equity

shares in the business or funding.

60 As highlighted in the introduction, to allow for comparison, this section examines the special residence permits for start-ups and ‘innovative entrepreneur while general self-employment schemes are examined in Section 3.4. The Start-up residence permit in the Netherlands is exempt from the points-based system which is applied for the admission general self-employment only.


29

■ Schemes targeted at business ideas/early stage businesses vs. schemes targeted

at already established businesses: In the examined EU countries, four schemes are

aimed at early stage businesses or business ideas (DK, FR, NL, ES). In Ireland and

Italy, both business ideas and already established businesses are eligible. In Ireland,

there is a special strand of the visa, called ‘12 month immigration permission’ which aims

to help future high potential start-ups to enter the market and develop the business

through a residence permit that is issued for one year. In the UK, the eligible applicants

are those ‘wanting to invest in the UK by setting up or taking over, and being actively

involved in the running of, one or more businesses in the UK’.

With regard to the international schemes, in Australia, the scheme is specifically

targeted to already established businesses with ‘successful business experience’ defined

in terms of turnover and total assets. In Chile, the Star-up Chile has three strands which

include business ideas, newly established and established businesses respectively. In

Canada, New Zealand and Singapore both already established businesses and early

stage businesses are eligible.

■ Sectoral approach: Only two countries – Denmark and Ireland – have limited their

Start-up visas to particular sectors. In Denmark, qualifying businesses are those in the

fields of life science, ICT, design and clean-tech and sustainable energy. In Ireland, the

programme is focused on innovative start-ups mainly from the tech industry (ICT).

Table 3.1 provides an overview of the main admission criteria - each of which is examined in

detail in Section 3.1 below. Table 3.2 depicts the main admission criteria for the general self-

employment schemes which are examined in detail in this Section below.

Table 3.1 Admission criteria under schemes for innovative entrepreneurs

Country Capital required

Subsistence funds required

Business plan

Innovation Facilitator/ sponsor/ endorser

Qualifi-cation/ education

Limited to certain sectors

Denmark

Start-up DK

No Yes Yes Yes (part of

the points-

based

system)

No No Yes –

science,

ICT, design,

clean tech,

energy

Denmark

Establish-

ment card

No Yes No No No Yes –

master and

PhD

graduates of

Danish

universities

No

France

Paris Tech

Ticket

No No Yes Yes No No No

France

Talent

passport

Yes – for

one

category61

Yes No No No Yes – for

one

category62

No

Ireland

STEP

Yes Yes Yes Yes No No Yes - ICT

61 The category includes: TCNs who directly invest in France in an ‘economic project’ (making a significant

contribution to the French economy i.e. bringing at least 50 Full Time Equivalent Jobs, invest at least €10,000,000 in assets), which can be described as investors / entrepreneurs.

62 The category includes: Third country nationals who obtained a degree equivalent to the Master degree or demonstrate a professional experience of at least five years at comparable level and who create a company in France with a business plan


30

Country Capital required

Subsistence funds required

Business plan

Innovation Facilitator/ sponsor/ endorser

Qualifi-cation/ education

Limited to certain sectors

Italy

Start-up visa

Yes Yes Yes Yes Yes –

certified

incubators

Yes (one

criteria for

innovative-

ness)

No

The

Netherlands

Residence

permit for

start-ups

No Yes Yes – Step-

by-step plan

Yes Yes No No

Spain

Residence

permit under

Law 14/2013

No No Yes Yes No Yes –

possible for

some

sectors –

e.g.

regulated

professions63

No

United

Kingdom

Tier 1

Entrepreneur

Yes Yes Yes No No Yes –

considered

as part of

the genuine

test

No

United

Kingdom

Tier 1

Graduate

Entrepreneur

No Yes No No Yes –

endorsed by

HEI or UKTI

Yes No

Australia

Business

Innovation

and

Investment

visa

Yes Yes No – for

established

businesses

only

No Yes – part

of the

points-

based

system

Yes – part

of the

points-

based

system

No

Australia

Business

Talent Visa

Yes Yes No – for

established

businesses

only

Yes Yes – part

of the

points-

based

system

Yes – part

of the

points-

based

system

No

Canada

Start-up Visa

Programme

Yes Yes No No Yes Yes No

Chile

Start-up

Chile

Yes (for

Seed strand

– 10% of the

subsidy)

No Yes Yes No No No

New Zealand

Entrepreneur

Work Visa

Yes No Yes Yes No No No

63 Applicants must meet the legal requirements that are necessary to start the activity (as is the case for Spanish

nationals). These requirements are laid down in the relevant sector-specific legislation and may demand a

particular professional qualification for the performance of the activity in the case of regulated professions


31

Singapore

EntrePass

Yes No Yes Yes Yes No No

United States

EB-5 visa

Yes No No No No No No

United States

E-1 and E-2

Treaty

investor visa

Yes No No No No No No

United States

H1-B visa

(highly

skilled

employees)

No Yes (meet

the wage

requirement

)

No No Yes – the

employer

Yes No

Source: ICF

Table 3.2 Admission criteria under general self-employment schemes

Country Capital

required

Subsistence

funds

required

Business

plan

Innovation Facilitator/

sponsor/

endorser

Qualification

s/education

Limited to

certain

sectors?

Italy Yes Yes No No No Yes No

The

Netherlands

Yes Yes Yes No No No No

Spain Yes Yes No No No Yes No

Canada

Federal self-

employed

programme

Yes Yes No No No Yes Yes

Source: ICF

3.1.2 Admission schemes subject to quotas

With regard to the EU Member States, quotas are in place in France for the Paris Tech

Ticket and the UK for the Tier 1 Graduate Entrepreneur Scheme (while the Tier 1

Entrepreneur scheme is not subject to quotas). In Spain, although there are no formal

quotas in place, the national scheme is selective, as the entrepreneurs are subject to an

evaluation of the business activity and the special economic interest in the country.

Regarding the international schemes, quotas have been set in Canada, Chile and the US.

There is a clear correlation between setting up quotas and providing funding under the

support schemes of the visas (examined under Section 3.3 below). In the two countries

where funding is provided to entrepreneurs (France and Chile), there are annual quotas set

in place – 50 for the Paris Start-up Ticket and 200-250 for Start-up Chile. Due to the

relatively high level of funding provided €12,500 in France and €13,000/€26,000/€78,000

(depending on the strand), the number of entrepreneurs granted the visas has been

numerically restricted.

In Canada, the Canadian Start-up visa programme has been subject to annual quotas of

2,750 permits. With regard to the US, there is no special scheme for entrepreneurs (but they

could come through other types of visas such as EB-5 and H1-B). The US immigration

system is characterised by numerical caps which does not only include entrepreneurs but

other categories of migrants eligible under these visas (please see accompanying Country

Fiche for more details of the US system).


32

Table 3.3 Annual quotas set for start-up visas/residence permits

Scheme Annual quota

France (Paris Tech Ticket) 50

UK (Tier 1 Graduate Entrepreneur) 2,000

Canada Start-up visa programme 2,750

Chile (Start-Up Chile) 200-250

US (EB-5) 10,000

US (H1-B) 65,000

Quotas serve to limit the number of admitted applicants. This can be seen in France and

Chile where funding is provided and where certain pre-defined amount of funds are

allocated, setting up quotas will ensure that this amount is being met. It may serve to limit

any abuse of the system as well or when the scheme is not planned as a mass immigration

pathway. If the scheme is still experimental (e.g. Canada) applicants admitted quotas may

serve as a ‘test group’ of how the policy may be developing.

3.1.3 Points-based systems for migrant entrepreneurs

The schemes for admission of start-up and entrepreneurs are points-based in Denmark and

the UK as well as in Australia and New Zealand. Points-based systems provide flexibility

where applicants can gain points under certain categories. The points system is meant to be

flexible so that it is not necessary to meet all the requirements, but a combination of them

could be enough. Please note that points-based systems are also in place when it comes to

general self-employment residence permits/visas in NL, IT and Canada, examined in Section

3.4.

Table 3.4 below provides the point-based system in Denmark. Assessments are based on

scores from 1 to 5 in relation to five evaluation criteria64. The evaluation is conducted by 5

judges (out of a pool of 15 expert judges) who evaluate the applicants independently of each

other, meaning they have no contact during the evaluation process. The judges are

independent public business consultants from a regional business development centre who

voluntarily act as judges (without additional compensation). To receive an approval the

entrepreneur needs at least 3.0 in average score for all five criteria from the 5 judges and

additionally at least 4.0 in the fifth recommendation criteria. Points can be scored across a

number of criteria including having an ‘innovative’ business model certain, having a certain

level of financial resources, attractive market, etc.

Table 3.4 Points-based system in Denmark

No Criteria Description

1 Innovative

business model

■ Particular Danish professional or labour market interests in the

establishment of the company in Denmark;

■ Business models that “seize an opportunity and accelerate the

development of a new market or industry”65

■ The level of innovation and introduction of new products,

services or processes within their field.

2 Attractive market ■ Market size, potential and entry barriers

■ Level of competition at the market and planned response by

the applicant

3 Capable applicant /

team

■ Assessment of skills, competences and experience in building

and leading a business

64 http://www.startupdenmark.info/faq/ (accessed 10 February 2016) 65 ibid

http://www.startupdenmark.info/faq/


33

4 Scalable business

model

■ Significant potential to create jobs and growth

■ Highly expandable

5 Recommendation

criteria

■ Degree to which start-ups are growth-oriented, innovative,

tech-driven and bring ideas, networks and knowledge

about new markets

■ Overall perception of the quality of the business model and the

applicants.

Another example of a points-based system is the UK – where the scheme is based on

having sufficient resources – the criteria under the points-based system are all related to the

capital requirements. Other criteria include the knowledge of English language66 and a score

of 95 in the points based system (see table 3.5 below on how the points are calculated).

Table 3.5 Points-based system in the UK

Criteria Points awarded

Having access to at least £200,000 (approx. €251,000) of disposable capital 25 points

Having at least £50,000 (approx. €63,000) from

■ One or more registered venture capital firms or

■ One or more UK entrepreneurial seed funding competitions

■ One or more UK government departments or

25 points

■ Having a live application for leave to remain in the UK

■ Having a tier 1 (Post study work) visa

■ Being engaged in business activity or

25 points

Having access to at least £50,000 (approx. €63,000) and also a Tier 1

(Graduate entrepreneur) visa. 25 points

The funds are held in a regulated financial institution 25 points

The funds are disposable 25 points

Speaking English to the required standard 10 points

Having sufficient funds to support yourself in the UK 10 points

TOTAL and threshold to be met

With regard to the international schemes, points-based systems are in place in Australia and New Zealand. The two systems are quite similar and points are awarded for age, English language ability, qualifications, experience in business or investment, net personal and business assets and business turnover. The points-based system in New Zealand is illustrated as an example in Table 3.6. At least 120 points out of 370 have to be scored to qualify for the Start-up visa. The points-based system in Australia is similar covering same categories (Please refer for Country Fiche for Australia)

Table 3.6 Points-based system in New Zealand

Business experience (points can be awarded only in one category) 40 (33.3%)67

Relevant Self-employment 40 (33%)

More than 10 years 40



Other Self-employment 20 (16.6%)



66 Applicants from the following countries do not need to prove their English skills: Antigua and BARDUDA, Australia, the Bahamas, Barbados, Belize, Canada, Dominica, Grenada, Guyana, Jamaica, New Zealand, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Trinidad and Tobago, the USA. 67 In this column, it is reported the highest percentage the points gained for the item (or sub-item) can contribute to building up the 120 points required to qualify.


34

More than 3 years 5

Relevant senior management experience 10 (8.3%)


More than 5 years 5

Benefit to New Zealand (points can be awarded in up to two categories)

160 (133.3%)

New full-time employment creation 80 (66.6%)

More than 10 full time positions 80



2 full time positions 20

1 full time position 10

Approved export business (based on annual turnover) 80 (66.6%)

More than NZ$ 1,000,000 (approx. €600,000) turnover/year 80

More than NZ$ 750,000 (approx. €450,500) turnover/year 60





Unique or new products or services to NZ or to a particular region 30 (25%)

Capital investment 80 (66.6%)

More than NZ$ 1,000,000 (approx. €600,000) 80

More than NZ$ 750,000 (approx. €450,500) 60

More than NZ$ 500,000 (approx. €300,000 50




Age 20 (16.6%)

< 24 15

25-49 20

50-59 10

>60 0

Business Based outside Auckland 40 (33%)

Threshold to be able to apply 120 (100%)

Total available points 370 (308%)

Points-based systems may offer flexibility where there is no ‘ideal’ type of applicant but a combination of certain criteria may satisfy the required standard. In the UK, although there is a points-based system this is specifically geared towards the requirement for having a certain amount of capital and hence does not fit within ‘traditional’ interpretation of points-based systems (where a range of criteria are established – e.g. age, investment, proof of self-support, qualifications, etc.). However, points-based systems might be seen as overly complex and not transparent, in particular where points are given for abstract concepts such as ‘innovation’, ‘potential to expand’, ‘potential to create’ jobs (Denmark); ‘unique or new product’ (New Zealand) or ‘benefit to the country’ (Australia). No publically available information or information from experts during the expert workshop on 7 March 2016 has been provided on how these criteria are measured by the approving panels. Further primary data collection and exploratory interviews with authorities and applicants would be beneficial to understand how these are examined in practice.

3.1.4 Requirements for the application (in line with national economic interest)

In three of the examined EU Member States (DK, FR, ES) and in two of the international

countries (Australia and New Zealand), a condition to be met by the applicant is that the

business/ start-up proposed should be in line with the national economic interest.

Furthermore, in the Netherlands, this requirement holds for the general self-employment

permit but not for the residence permit for start-ups.

In Denmark, entrepreneurs from third countries may apply for the Start-up Denmark

scheme, if they have an ‘innovative’ business idea that can contribute to growth and new

employment in Denmark. This is manifested in the points-based system where points are


35

given for particular Danish professional or labour market interests in the establishment of the

company in Denmark.

In Spain, where the applications are assessed on a case-by-case basis, a criterion which the

entrepreneur needs to satisfy is that the entrepreneurial activity has an added value for the

Spanish economy, including innovation or investment opportunities. No further clarification

as to how this is assessed is available online.

In France, one criterion for qualifying for the residence permit for skills and talents is that the

project has to demonstrate contribution to the economic growth and the international

outreach of France and the country of origin. This is not further defined in publically available

documents.

In Australia and New Zealand, as part of the points-based systems, points are given when

the business can demonstrate an ‘important benefit’ to state. Similar to the European

schemes, it seems that this is left to the discretion of the examining bodies but no further

light on how this is determined or any particular examples could be found.

The requirements for the application to be in line with national economic interest result in

issues of transparency. No publically available guidelines as to how this is assessed have

been found. To better understand the assessment of the ‘national economic interest’,

exploratory interviews with examining authorities in the countries where this condition is in

place would be illuminating. The economic interest can be linked to certain pre-defined

industries of importance for the country as it is the case in Denmark and Ireland. However, in

Denmark, both conditions – i.e. pre-defined industries and ‘national economic interest’ are

present and it is not clear how the two of them differ/interact with each other.

3.1.5 Sectoral approach

Only two countries – Denmark and Ireland – have limited their Start-up visas to particular

sectors. In Denmark, qualifying businesses are those in the fields of life science, ICT, design

and clean-tech and sustainable energy. Businesses such as restaurants, retail shops,

consultancy firms, import or export enterprises or similar are not eligible for the permit. In

Ireland, the programme is focused on innovative start-ups mainly from the tech industry

(ICT). The focus is rather a niche market and the programme and is not intended for retail,

personal services, catering or other similar businesses. In other countries, there are no

explicit limitations to particular sectors; however, the requirement for the business to be

‘innovative’ may de facto act as a limitation/pre-disposition to certain sectors. This is

examined in the sub-section below.

Given that only two countries have adopted the sectoral approach, this could be an

indication that this is not a preferred approach by these countries who have start-up visas in

place, indeed, there are some shortcomings for setting up sectoral limitations. To distinguish

from traditional self-employment of low skilled jobs (e.g. ethnic food stores, cleaning,

transport), certain sectors (typically sectors with predominantly high skilled work) – such as

ICT – which are considered as innovative – might be explicitly or implicitly preferred.

Adopting a sectoral approach might be limiting since in the modern knowledge economy a lot

of the traditional industries (e.g. Uber taxis, delivery of fresh foods) are being transformed in

innovative ways. This is a dynamic process and when governments attempt to link it to

estimated labour shortages, a time gap may occur in the filling in these particular shortages.

3.1.6 Requirements for ‘innovativeness’

With the exception of the UK, residence permits for ‘innovative entrepreneurs and start-ups’

in the examined EU Member States require the element of ‘innovation’ to be met. There are

no common definitions of ‘innovative entrepreneurs/start-up’ across the Member State as

this is defined based on certain criteria which are examined below. How innovation is defined

varies significantly across Member States. Definition/criteria to assess ‘innovation’ are

outlined in Table 3.7. As it can be seen, the most common requirement is to demonstrate in

the business plan that the product, service or process (to be) launched is innovative. The


36

understanding of innovation can also be linked to particular industries. For example, in

Denmark, innovative businesses are those which are “scalable and, ideally tech-driven start-

ups”68 mainly in the fields of life science, ICT, design and clean-tech and sustainable energy.

Businesses such as restaurants, retail shops, consultancy firms, import or export enterprises

or similar are not eligible. An innovative start-up is defined in Italy. An innovative start-up is a

start-up that meets at least one of the requirements laid out in the legislation, including69:

■ the expenditure on research and development is at least 15% of the greater of cost and

total value of production of the innovative start-up70;

■ at least a third of the total workforce has a PhD or is doing a PhD at an Italian or foreign

university; alternatively, at least two thirds of the total workforce hold a Master’s degree,

■ the start-up is the owner or the licensee of at least one industrial patent on an invention

of industrial biotechnology, a topography of semiconductor product or a new plant variety

directly related to the corporate purpose and the business activity.

With regard to the international schemes, innovation is required in four of the six examined

countries (Australia, Chile, New Zealand and Singapore).

The details of how innovation is to be achieved are commonly required to be laid out in the

business plan (see section 3.1.6). In some countries (DK, FR, IT, NL, ES), an expert panel is

put in place to assess the business plan, including the ‘innovativeness’ element.

Similarly to the some of the admission criteria examined above, ‘innovativeness’ is an

abstract condition which if not clearly defined may lead to issues of transparency or adding

complexity to the scheme which may deter some applicants from applying. ‘Innovation’

should be examined by industry experts to ensure that the assessment is not biased or

arbitrary. The most common criterion is that the product or services should be ‘innovative’

and outlined in the business plan. Further exploration, in particular through primary data

collection (i.e. interviews with relevant stakeholders) would greatly benefit the further

understanding of how the concept is defined and assessed.

68 http://www.startupdenmark.info/faq/ (accessed 10 February 2016) 69 Law 221 of 17 December 2012, from the Italia Start-up Visa Guidelines, http://italiastart-upvisa.mise.gov.it/pdf/linee_guida_ISV.pdf, (accessed 23 February 2016). 70 The expenses for purchasing real estate do not fall under the research and development cost; the costs must result from the last approved financial statements.


http://italiastartupvisa.mise.gov.it/pdf/linee_guida_ISV.pdf



37

Table 3.7 Definitions/criteria to assess ‘innovation’ in the examined Member States

Country Definition/criteria to assess ‘innovation’

Denmark Innovative business model defined as:

■ Particular Danish professional or labour market interests in the establishment of the company in Denmark;

■ Business models that “seize an opportunity and accelerate the development of a new market or industry”71

■ The level of innovation and introduction of new products, services or processes within their field.

Assessment of the degree to which “start-ups are growth-oriented, innovative, tech-driven and bring ideas, networks and knowledge about new

markets”

France The term ‘innovation’ not particularly defined but understood to include the following aspects:

■ innovative and scalable start-ups to contribute to a fast development of innovation

■ high growth potential

Ireland ■ Introducing a new or innovative product or service to international markets

Italy An innovative start-up is a start-up that meets at least one of the following requirements:

■ its expenditure on research and development is at least 15% of the greater of cost and total value of production of the innovative start-up72;

■ at least a third of the total workforce has a PhD or is doing a PhD at an Italian or foreign university; alternatively, at least two thirds of the total

workforce hold a Master’s degree,

■ The owner or the licensee of at least one industrial patent on an invention of industrial biotechnology, a topography of semiconductor product

or a new plant variety directly related to the corporate purpose and the business activity.

The

Netherlands

The second condition requires that the product or service is innovative. The product or service is considered innovative if at least one of the 3 conditions is met:

■ The product or service is new to the Netherlands;

■ A new technology for production, distribution or marketing is involved;

■ There is a new innovative organisational and process approach.

Spain ■ Activity’s innovative nature and its special economic interest for Spain is required

UK No definition /criteria of innovation

Australia Indication of innovation of the existing business include:

■ registered patents or deigns,

■ registered trade markers,

■ Joint venture agreements, for export trade, and for gazelle businesses.

Canada No definition /criteria of innovation

71 Ibid Reference is missing 72 The expenses for purchasing real estate do not fall under the research and development cost; the costs must result from the last approved financial statements.


38

Country Definition/criteria to assess ‘innovation’

Chile ■ An innovative product/service

New Zealand ■ Uniqueness of the products or services for New Zealand or a particular region

Singapore The applicant must meet at least one of the innovation criteria:

■ The company is receiving monetary funding or investment of at least S$100,000 from a Venture Capitalist (VC) or an accredited angel

investor;

■ The company holds a registered Intellectual Property Right (IPR);

■ The company has on-going research collaboration with an institution recognised by Agency for Science, Technology and Research (A*STAR)

or Institutes of Higher Learning in Singapore.

■ The company is an incubatee at a Singapore Government-supported incubator

United States No definition /criteria of innovation


39

3.1.7 Requirements for a business plan

Submission of a business plan with the application is required in Denmark (Start-Up

Denmark), France (Paris Tech Ticket), Ireland, Italy, the Netherlands, Spain and the UK.

Presenting a business plan is also required in Chile, New Zealand and Singapore. The

business plan generally should include information on the idea the entrepreneur intends to

realise, the ways in which s/he intends to develop it, and other information, such as the

business concept, the goods and services envisaged to be produced, the business mission,

the target market and the growth objectives, the team to be involved and the available

funding/ways in which funding will be obtained. In some countries, it is required to include

information on innovation element that the business is offering. The blue box below provides

four examples of business plans – three in EU Member States (IE, NL and ES) and one

under an international scheme – Singapore.

Ireland- business plan requirements

In Ireland, the business plan has to be completed in the Sample Business Plan template

issued by INIS. The template is a 19 page document including detailed instructions on

what the business plan has to entail. The plan has 8 core chapters:

■ Company description, including information on shareholders, products, objectives

and a SWOT analysis

■ Market analysis, including a description of the target market and the trends

■ Marketing / sales strategy

■ Research and Development, including planned or pending patents, and product

developments

■ Staffing and operations, including a management organisation chart

■ Financial projections, including key projections, and cash flow projections

■ A sales pipeline, and ■ Funding requirements73

The Netherlands – Business plan requirements

In the Netherlands, the start-up entrepreneur has a step-by-step plan to advance the

idea to a business. The plan will need to include why the company is innovative and

outline the idea. The plan has to describe why the company is innovative and how the

entrepreneurs are going to build a business. There are four elements:

■ The entrepreneur needs to focus on his/ her role in the start-up

■ Idea for the product or service

■ Innovative nature of the start-up

■ Business aspect – i.e. the steps that the entrepreneur will take to make the idea /

product to a successful scalable business.

73 The sample business plan is included in annex 1.


40

Spain – Business plan requirements

A business plan is required to support the granting of the visa/permit. Before applying for visa or permit, they need a favourable report on the business plan to carry out in Spain. This report is awarded by the Spanish Economic and Commercial Office (SEC). If the business plan is approved, he/she obtains a report on Entrepreneurial Activity of Interest. The business contains several elements on the feasibility of the proposed activity, considering the market situation and the objectives of the undertaking. The assessment of the business activities is done on a case-by-case basis. Elements of the business plan include:

■ Legal aspects (e.g. corporate structure and mission, liability, staff and details on the

location);

■ A business project (e.g. business profile, investment plan, profitability forecast,

perspectives of employment, growth);

■ A market analysis and marketing strategy.

Singapore – Business plan requirements EntrePass

Along with the EntrePass application form, the entrepreneur has to provide a

comprehensive business plan of around 10 pages including the following elements:

■ A short summary about the business concept;

■ Details about the offered business: products, services to provide;

■ Analysis of industry potential in Singapore, key competitors, and potential for

growth;

■ A Marketing plan;

■ An operational plan description deals specifically with the internal operations and

resources;

■ A summary of key management individuals running the business; and

■ Projected sales and net profit before tax for three years.

The requirement for presenting a business plan is in place in the majority of the examined

countries. The benefit for presenting a business plan is that the examining authorities

familiarize themselves with the business and can assess requirements such as ‘innovation’

and ‘national economic interest’. This can also serve to ensure that the proposed business is

genuine. However, examining business plans is costly and time-consuming, especially when

expert panels of practitioners are commissioned for this exercise. Indeed, as in the case of

France Paris Tech Ticket where only 3% of the total volume applications are admitted in 50

places, examining a large volume of applications can be costly. There are also issues

around transparency and how the business plan is examined – including whether there is

bias or implicit favouring towards certain industries or ‘type of migrants’. As highlighted

above, a more in-depth exploration of this aspect, including through primary interviews and

case studies will be beneficial for shedding more light on the process.

3.1.8 Requirements for funds

One of the most common requirement is capital required/funds available for setting up the

business. This is the case in four of the seven examined EU Member States – FR (Talent

passport), IE, IT, UK and in five of the six examined international schemes: Australia,

Canada, New Zealand, Singapore, US (EB-5 visa). In these countries, a minimum capital

defined per country is a necessary requirement to obtain the visa. In addition, some

countries require proof of subsistence (DK, FR, IE, IT, UK, Australia, Canada, US).

As it can be seen from the table below, the requirement for capital is the highest in the US

USD 1 million (approx. €876,000), followed by Australia - at least AUD 800,000 (approx.

€612,000) and UK £200,000 (approx. €250,000, which could be reduced to £50,000 if the


41

applicant has access to the funds from a Financial Conduct Authority (FCA) registered

venture capital firm. In France, €300,000 is required for the residence permit of talents and

competences; however entrepreneurs are also able to come through the Paris Tech Ticket

subject to 50 places.

■ Schemes geared towards investors or established businesses: In the US, there is

no start-up visa and instead there are three other entry pathways for entrepreneurs. The

EB-5 visa targets immigrant investors. In Australia, the visa is geared towards high

value, already established business, in addition to the requirements of total net business

and personal assets, the applicant must, for two out of four previous fiscal years before

the application, show to have had an ownership interest in an established business(es)

that had at least AUD 500,000 (approx. €340,000) turnover per year. Moreover, the

applicant must have a certain percentage of the nominated business, which equals to

51% if the business has a turnover of less than AUD 400,000 (approx. €273,000) per

year, to 30% if more than AUD 400,000 (approx. €273,000) and 10% is the business is a

publicly listed company.

■ Cases when the minimum capital can be lowered/waved (IT, UK, NZ): In Italy, the

evidence for capital may be lowered if the application is lodged through incubators as the

value of services in kind can be included in the total amount of funding. In the UK, the

capital requirement can drop down to £50,000 (approx. €63,000) if the applicant has

access to the funds from a Financial Conduct Authority (FCA) registered venture capital

firm, a UK government department or approved seed funding competitions under UKTI.

In New Zealand, the minimum investment requirement can be waived if the business to

be established is in “science, ICT [Information Communication Technology], or other high

value export-oriented sector, which demonstrate a high level of innovation or credible

short-term high growth prospects” .

■ Proof that the funds are readily accessible: Additional requirement is that the funds

must be readily accessible and disposable for the purposes of the business the applicant

is set to establish. For example, in Italy there is a condition that the capital may come

from his/her own resources or from another funding body (business angels, venture

capital, banks, certified incubators, crowd-funding etc.).

No publically available information has been found on the rationale for setting up the

particular amounts of the thresholds for minimum capital/funds required.

Table 3.8 Minimum funds required under the schemes

Country Funds to start the business Funds for subsistence of the entrepreneur

Denmark No Start-Up Denmark: DKK 131,616 (approx.

€17,700)

Establishment card: DKK 84,828

(approx. €11,400)

France Residence Permit for skills and

talents: €300,000

No

Ireland €50,000 (or €30,000 if more than one

applicant)

No

Italy Start-up visa: €50,000 (lower if the

application was launched via incubators)

Permit for autonomous work: €8,500

The

Netherlands

No €1,139.90 for each month the applicant

plans to stay in the Netherlands

Spain No No

United

Kingdom

£200,000 (approx. €250,000). This

requirement can drop down to £50,000

(approx. €62,000) if the applicant has

access to the funds from a Financial

Conduct Authority (FCA) registered

£3,310 (€4,156) if applying outside the UK,

£945 (€1,186) if applying within the UK


42

venture capital firm

Australia total net business and personal assets of

at least AUD 800,000 (approx. €612,000)

No

Canada Investment of at least CA$200,000

(approx. €136,000) (from a designated

venture capital fund) or a secure a

minimum of CA$75,000 (approx.

€51,000) (from a designated angel

investor group)

Depends on the no. of family members

CA$11,824( €8,000) for 1 family member

CA$14,720 (€10,000) for 2 fam. members



Chile Under the Seed strand, the entrepreneur

must provide 10% of the funding 20

million CLP (approx. €26.000)

No

New Zealand NZ$ 100,000 74 (approx. €60,000) No

Singapore S$50,000 (approx. €32,000) No

United States EB-5 visa: USD 1 million (approx.

€876,000)

H1-B: No

E-1 and E-2 visas: No, but trade must

be

"substantial"

No

Setting-up a minimum capital requirement is the most common condition adopted in the

examined EU and non-EU countries. Commonly, funds could be secured from investors,

business angles or incubators/accelerator programmes. Having a certain funding threshold

will ensure that there is (at least) initial capital for the launching of the business and initial

expenses required for the business. However, if the amount is too high the target group

might shift towards investors rather than innovative entrepreneurs/start-ups. In Italy and the

UK, capital threshold is lower when there is already a commitment from an investor – i.e. an

application is launched via an incubator (IT) or the applicant can prove access to funds from

a registered venture capital firm (UK). To avoid abuse, the applicant has to provide that

funds are readily accessible and from genuine sources.

3.1.9 Requirements for specific qualifications/education and language requirements

Requirements for certain qualification levels are in place for the two Graduate entrepreneurs’

schemes in Denmark (Establishment Card) and the UK (Tier 1 Graduate Entrepreneur). It is

also a requirement for the US H1-B visa. Apart from these schemes, the condition for having

completed at least one year of study at a post-secondary institution is set only in Canada as

a necessary condition for the start-up visa. In some countries, having a certain level of

qualification could be part of the points-based system (Denmark, Australia), part of genuine

entrepreneurship test (UK) and for some sectors (the Netherlands, Spain).

Language requirements are in place in France, UK, Australia, Canada and New Zealand.

In the UK, proof of level B1 certificate or a recognised academic qualification that was taught

in English is required. In France, the programme French tech ticket runs in English and

knowledge of English is required. In Australia, points are awarded for English language

ability. In Canada, language proficiency of one of the two official languages (IELTS for

English and the TEF for French) is required.

As it can be seen from the analysis above, having a specific qualification/education level is

not required in the examined countries – with the exception of Canada and these schemes

which are targeted to graduates in Denmark and the UK. Having certain business or

managerial experience (but not necessarily an academic one) could add points where

74 This minimum investment requirement can be waived if the business to be established is in “science, ICT [Information Communication Technology], or other high value export-oriented sector, which demonstrate a high level of innovation or credible short-term high growth prospects”


43

points-based systems are in place (e.g. Australia and New Zealand) or could add further

weight to the business plan in parts where the team is presented.

3.1.10 Other requirements

Additional requirements under the start-up schemes include:

■ Physical presence (DK, FR, ES): In France, to be eligible to apply for the French Tech

Ticket applicants need to demonstrate that they are dedicated to the project and have no

other professional activity/commitment. Similarly, in Denmark, the applicant needs to be

involved in the day-to-day operations of the business and TCN who only have financial

interest are excluded.

■ Job creation (ES, NZ): Spain no minimum conditions set In New Zealand, points are

given for new full-time employment creation

■ Age (Australia, New Zealand): Age is taken into account under the points-based systems

whereby higher points are given if the applicant is within the 25-49 bracket.

■ Proof of health insurance (DK, ES)

■ Medical examination (Canada, New Zealand)

■ Evidence of no criminal record (ES)

As it can be seen from the list of additional requirements, additional checks take place to

establish that the applicants comply with public safety requirements and also to ensure that

the applications are genuine and avoid abuse of the start-up visas migration channels. In the

UK, this is consistently done through the genuine entrepreneurship test (see the box below).

Genuine entrepreneurship test in the United Kingdom

With the aim to reduce non-compliance within the system, the UK has increased its

checks and assessment of migrant’s activities before allowing changes to other visas or

residence permits. For example, since 2013, those switching into the Entrepreneur route

are subject to a “genuine entrepreneur” assessment which looks at, among other criteria,

the applicant’s previous business experience and activity in the UK. Through this test

applicants must show that they are genuinely able to, and intent to, establish a business

within the UK in the next six months, intend to invest their capital in that business, that the

capital is available, and, that they do not intend to take up any employment in the UK apart

from working in that business. This test can also occur when applicants are applying for

leave to remain and indefinite level to remain. The test includes a paper application, with

additional evidence if requested of access to funds and a business plan, followed by a

potential interview.

3.2 Requirements for having a facilitator, sponsor or endorser

Canada and the Netherlands are the two countries where working with facilitator is a

necessary requirement to obtain the visa. In Italy, the residence permit application can be

launched via certified incubator but this is not a necessary requirement.

In all three countries, facilitator is a legal entity which must have established track record of

relevant experience (minimum 2 years in the Netherlands) and be approved by the relevant

authorities. In the Netherlands, the cooperation between the applicant and the facilitator

must be specified with a (signed) agreement between the start-up entrepreneur and the

facilitator. Similarly, in Canada, the investor organisation has to provide a Commitment

Certificate directly to Citizenship and Immigration Canada, summarizing the details of the

commitment made with the applicant.

Further requirements for the facilitators include: they must have experience in guiding start-ups; must be financially sound and cannot have a majority interest in the new business or be related to the start-up entrepreneurs (although they could provide financing). The


44

Netherlands Enterprise Agency (RVO.nl) keeps a list of recognised facilitators75. Facilitators are defined as legal entities. To be recognised and apply for a facilitator, the legal entities must have a track record of at least 2 years in guiding start-ups; must be financially sound and cannot have a majority interest in the new business or be related to the start-up entrepreneurs (although they could provide financing). The role of the facilitator is to provide the start-up with guidance. The list is approved by the Enterprise Agency. In Canada, the designated Canadian organisations include angel investor group, venture capital fund or business incubator. In Italy, the application can be lodged directly by the applicant or through a certified incubator. An incubator is defined as a company “that hosts start-ups and support business ideas deemed to offer the potential for a high economic return, but which are not yet ready to receive large-scale funding”76 and that “provides targeted incubation and acceleration services designed to support the creation or development of innovative start-ups”77. To qualify as certified incubators, a company must meet certain criteria, as defined by the Ministry of Economic Development. These include providing adequate buildings and equipment and a technical and management structure, engaging in collaborative relationships with universities, research centres, public institutions and financial partners and showing sufficient experience in supporting innovative start-ups.

The role of the facilitators is to provide the start-up with guidance as well as in some

instances funding. The facilitator can, for example, help with operational management,

marketing, research and seeking investors for setting up the innovative company. In the

Netherlands, facilitators typically get a stake of 5 to 8% (but possible to have larger shares

10- 15%) generally in the form of shares in the company. The facilitator gets the investment

back (only) if and when the start-up grows substantially in value, by selling his shares at a

good price.

The benefit of working with a facilitator is that the start-up is guided by an experienced

mentor. Another reason for the involvement of facilitators is also that the mentors are

capable to make the decision whether a start-up is innovative or not, rather than the

immigration authorities. In the Netherlands, the facilitator also plays a role in the renewal of

the visa. An endorsement letter should be provided by the facilitator for the renewal of the

scheme.

A potential concern identified is that facilitators could exploit/take advantage of

entrepreneurs who are dependent on them for renewing the permit as they have also a

vested interest when providing financing to the start-up. However, this is seen as unlikely,

because facilitators are selected for their track records and because the risk of being

excluded from the system is high. In Canada, the Start-Up Visa Programme includes a Peer

Review Process. This process is designed to make sure that the deals made between the

investment organizations and immigrant entrepreneurs are legitimate. Panels have been

established by an industry association that represents the type of investment organization

making the commitment. For instance, in the case of an angel investor group, the National

Angel Capital Organization would be responsible for the peer review panel. In cases, where

the group making the commitment is a venture capital fund, Canada’s Venture Capital and

Private Equity Association would be the authority responsible. The assessment of the peer

review panel is not legally binding on the immigration officer. It will only confirm that the

investment organization has carried out the proper checks and investigations according to

industry standards.

3.3 Support schemes

Although some countries, such as the Netherlands and Canada require the entrepreneur to

have an agreement and work with a facilitator, which is usually an incubator and/or

75 http://english.rvo.nl/subsidies-programmes/residence-permit-foreign-start-ups/do-i-qualify/facilitator 76 Italia Start-up Visa Guidelines, http://italiastart-upvisa.mise.gov.it/pdf/linee_guida_ISV.pdf, (accessed 23 February 2016). 77 Ibid

http://english.rvo.nl/subsidies-programmes/what-facilitator

http://english.rvo.nl/subsidies-programmes/residence-permit-foreign-start-ups/do-i-qualify/facilitator



45

accelerator programme, the entrepreneur has to themselves get in contact with the incubator

and apart from the admission scheme itself, no further financing and support is provided to

the entrepreneur. In contrast, support schemes can be defined as those that in addition to

the admission scheme, that provide additional incentives/benefits (such as funding and other

incentives). Support schemes have been introduced in three countries in order to attract

potential applicants (France – Paris Tech Ticket, Ireland, Chile). Usually, these schemes

include some sort of financing or other incentives (cash or in-kind) to attract the migrant

entrepreneurs. The particular incentives are provided in the table below. As it can be seen,

financial incentives are provided in France, Chile and Singapore. The UK Sirius

Programme for international graduates was a two year pilot that was launched in 2013,

under UKTI, and has now finished.

In France, the incubators which are hosting the start-ups are partners of the programme.

The selected start-ups cannot choose the incubators, but are allocated to one of the partner

incubators by the Final Selection Committee of the French Tech Ticket. The close

cooperation with incubators and entrepreneurs in both, the selection of the candidates and

the programme itself is a strong positive aspect of the programme. For the involved

incubators being part of the programme is regarded as prestigious, with low cost for them.

The incubators are reimbursed by the government a small amount for their participation.

However, the setup of the collaboration between incubators and the government lacks

transparency. It is unclear how the collaboration with the government and incubators looks in

detail, but it can be assumed that incubators investing services and money close deals

similar to their usual terms and conditions. It is too early to say whether there is a business

case for incubators to be involved on a long term.

In Ireland, the application for the STEP is not connected to an ecosystem or other support

for the scale up of the company. However, the 12 month immigration permission scheme is

meant as a support scheme for early stage high potential start-ups to apply for STEP and it

is connected to support from an incubator. Although the issuance of the residence permit

under STEP is not directly connected to a support scheme from a start-up ecosystem, the

high potential start-ups under the programme have the possibility to benefit from support

provided by Enterprise Ireland. Enterprise Ireland has developed the ‘New Frontiers

programme’, which is a development programme for innovative, early-stage start-ups. The

programme is three-phased, including testing the business idea, business planning and

business development. The programme is based in 14 campus incubation. Further, the

accelerator ‘Start-up Ireland’ provides support for early stage start-ups by providing them

with networks, connections and collaborations with investors, the government and other

start-ups. Startup Ireland organises each year a ‘startup gathering’ that is supported by the

Department of Jobs, Enterprise and Innovation and is part of the ‘Action Plan for Jobs’

published by the Irish Government.

In Chile, the scheme provides a yearly financial support of approximately €35,000 for each

project, a year’s visa for start-up founders, office facilities and mentoring and coaching

opportunities. There are three strands of the programme:

■ S Factory Programme: female founders can join a 12-week training to learn all the

basics to get started their business in start-up world. The S Factor offers the companies

to receive 10 million Chilean pesos (CLP) (around €13.000) and three months

acceleration

■ Seed Programme: The programme seeks to promote interaction, international

networking and stimulate the transfer of the skills between entrepreneurs. Selected companies receive a subsidy of 20 million CLP (approx. €26.000) per project and six

months acceleration. ■ Scale Programme: Scale programme offers 60 million CLP (approx. €78.000) to

entrepreneurs, who need an additional capital to grow in Chile and to expand to the rest

of Latin America. Companies have to first pass through the Start-Up Chile Seed program


46

Table 3.9 Incentives and services under the support schemes

Country Incentives and services

France

Paris Tech Ticket ■ Fast-track procedure to obtain a residence permit

■ Funds of €12,500 (6 months) as the competition prize.

■ If the start-up remains in the programme for another 6 months, it will be

possible to get a second prize of 12,500€ at the end of the 6 months. Each

team member will get a prize.

■ Free space in a partner incubator, including a dedicated workspace, training

sessions and events by the incubator network and access to a senior mentor

to support the growth of the start-up

■ Tailored programme of events

■ Help desk for assistance with the administration

■ A ‘landing pack’ to help entrepreneurs relocate to Paris

■ Lower prices on Air France flights, a Gold loyalty card and advertising for the

start-up via Air France

Ireland ■ No financial or other in-kind incentives provided: the 12 month immigration

permission scheme is meant as a support scheme for early stage high

potential start-ups to apply for STEP and it is connected to support from an

incubator.

UK (Sirius

programme) -

ended (last

admittance was in

October 2014)

■ Winning graduates were given £12,000 per individual for a year and were

guaranteed no loss of equity in their business

Chile ■ 10 million Chilean pesos (CLP) (around €13.000) and three months

acceleration (S Factory Programme)

■ 20 million CLP (approx. €26.000) per project and six months acceleration

(Seed Programme)

■ 60 million CLP (approx. €78.000) to entrepreneurs (Start-Up Chile Scale

Programme)

3.4 General self-employment permits

To allow for comparability of different schemes, this section provides an overview of the

admission criteria of the general self-employment permits while the criteria of the start-up

visas/residence permits for ‘innovative’ entrepreneurs are examined in the sub-sections

above 3.1, 3.2 and 3.3.

Table 3.10 Admission criteria under general self-employment schemes

Country Capital

required

Subsistence

funds

required

Business

plan

Innovation Facilitator/

sponsor/

endorser

Qualification

s/education

Limited to

certain

sectors?

Italy Yes Yes No No No Yes No

The

Netherlands

Yes Yes Yes No No No No

Spain Yes Yes No No No Yes No

Canada

Federal self-

employed

programme

Yes Yes No No No Yes Yes


47

These types of permits are available in Italy, the Netherlands, Spain and Canada. In Italy,

since 2012 annual quotas have been set in place (about 2,400 per annum). In the

Netherlands, the admission under the self-employment permit is based on a points-based

system under which an assessment is made as to whether the business will serve an

essential Dutch interest. The points-based system was developed by the Ministry of

Economic Affairs and it is applied in the assessment by the Immigration and Naturalisation

Service (IND) in consultation with the Enterprise Agency. In Canada, the residence permit is

limited only to the following sectors: cultural activities or in athletics, and/or have farm

management.


48

4 Application process

This section provides an overview of the application process in the analysed countries,

focussing on the length of the application procedure, the role of the authorities responsible

for the application procedure as well as the duration of the visas / permits and possible

status changes.

4.1 Procedure length

EU Member States

The procedure length in the analysed schemes vary between the Member States (e.g. 1

month in Denmark or Spain to up to 4 months in France), but also between different

schemes in the same Member State.

The duration of the procedure depends on the amount of documents that need to be

submitted and processed by the authorities (see above). Further, it depends on the number

of authorities and / or other organisations / sponsors involved in the decision making process

(see below).

International schemes

There is limited information on the processing times in the international schemes. In most of

the analysed countries information on the processing times is not readily available. However,

in the US the procedure length for the different schemes is set, and is estimated between 1

month and 1 year in a first step. The second step might take another 3-6 months (see the

description of the application process below). The process for the E1 and E2 visas is shorter

and takes usually around 2.5 months.

Table 4.1 shows a summary of the different processing times in the Member States and

international countries.

Table 4.1 Procedure length under the schemes

Country Scheme Procedure length (in months)

Denmark ■ Start-up Denmark

■ Establishment Card

■ 2.5

■ 1

France ■ French Tech Ticket

■ Residence permit for skills and

talents

■ Talent passport (from November

2016)

■ 3-4

■ 2-3

■ N/I78

Ireland ■ 12-month immigration permission

■ STEP

■ 3-4

■ 3-4

Italy ■ Visa for autonomous work:

■ Start-up visa:

■ 4

■ 1

The

Netherlands

■ General self-employment permit

■ Residence permit for start-up

entrepreneurs

■ 3

■ 1.5-2

78 N/I = no information


49

Country Scheme Procedure length (in months)

Spain ■ Organic Law 4/2000 (Blue Card)

■ Law 14/2013 (National scheme)

■ 1

■ 1

United

Kingdom

■ Tier 1 entrepreneur visa

■ Tier 1 graduate entrepreneur visa

■ no specified duration

■ no specified duration, endorsement

can take up to 2 months

Australia ■ Temporary visa: Business

Innovation and Investment visa

(subclass 188)

■ Permanent visa: Business

Innovation and investment Visa

(subclass 888)

■ Permanent visa: Business Talent

Visa (subclass 132) - Significant

Business History stream

■ N/I

Canada ■ Start-up Visa Programme

■ Self-employed Persons Programme

■ Individual provincial entrepreneur

programmes

■ N/I

Chile ■ Start-up Chile ■ N/I

New Zealand ■ Entrepreneur Work Visa ■ 3

Singapore ■ Entrepreneur Pass (EntrePass) ■ between 1.5 and 2

United States ■ EB-5 visas

■ E1 and E2 visas

■ H1-B visa

■ between 1 to 12

■ generally 2 months and 15 days

■ N/I

As visible from the table 4.1 above, the duration of the procedure is quite short in some

Member States, e.g. 1 month in Italy or Spain, whereas in e.g. France and Ireland the

duration is up to 4 months. These differences can be explained through various factors,

including the number of applications achieved, whether a cap was put on the actual number

of permits to be issued, or how many government and private bodies are involved in the

process itself. The Member States do not provide justification

Although a shorter processing time is generally positive for the applicants, it is difficult to

estimate to what extent a shorter application procedure ultimately contributes to the

attractiveness of the scheme. It is more likely that this is only an ‘added benefit’ for the

applicant but not crucial in decision making. Comparing for example the number of

applications for France and Italy, it is noticeable that in 2014 more applications were issued

in France (722) compared to only 51 in Italy (see section 6 in this report for a detailed

statistical overview). The short application time is obviously not the only part of the process

influencing the attractiveness of a particular scheme. In the case of France and Italy, the

attractiveness might very well be connected to a subsidy issued to entrepreneurs under the

French schemes versus the need to show capital in advance under the Italian scheme.

Further, the attractiveness of the whole ecosystem and the entrepreneurship culture in

general (as shown in Section 2) have a stronger influence on the decision making process

than the application procedure itself.


50

Finally, keeping the processing time short might create an additional burden for the

authorities processing the application at the same time. The cooperation with agencies such

as in the Netherlands (enterprise agency) or similar public bodies responsible for the

applications might be a solution. Nevertheless, this depends on the number of applications

received, which differs largely between Member States as visible in section 6 in this report.

4.2 Authorities responsible for processing the application

EU Member States

The majority of Member States has elaborated selection procedures for start-up

entrepreneurs, including joint decision making via public authorities, accelerators and/or

incubators (DK, FR, IE, IT). In most Member States the responsible authorities are the

Ministries of Interior or the Ministries of Business/Economy. In some Member States

business agencies are responsible for the entrepreneur visas (e.g. in Denmark, and the

Netherlands). In other Member States expert panels or committees including incubators or

accelerators are involved in the decision making process (e.g. France, Ireland). However, in

Spain and the UK no cooperation between public authorities and private bodies such as

incubators or facilitators is in place.

Generally, the authorities responsible for the applications of entrepreneurs differ depending

on the type of visa or residence permit the entrepreneur applies for. Usually private bodies

are included in the decision making process of the specific schemes for entrepreneurs, but

not in the process concerning the general self-employment permits.


Similar to the responsible authorities in EU Member States, in all of the analysed

international schemes, the responsible bodies are public authorities including agencies.

Table 4.2 provides a summary of the different responsibilities in the selection process in the

Member States and international countries. The table shows the authorities generally

responsible for all applications in a country, indicating if some authorities are only

responsible for a certain type of permit.

As the table shows, only in 2 of the international schemes, third party bodies are included in

the selection (Canada and Chile). This differs from the process in the EU Member States

where third party bodies are involved in the process, except in Spain and the UK. The third-

party involvement can be done either by private bodies (as is the case in the majority of

countries) or by public bodies (Denmark). In the UK universities are included in the decision

making process for the Graduate entrepreneur visa, as is the case with Ireland. Including

universities and other higher education institutions in the selection process might prove as

an advantage, as experts from these institutions might be able to anticipate how ‘innovative’

a proposed start-up is. Universities may play a major role in attracting entrepreneurs. A

connection with universities might especially be important at the early-stage phase when the

entrepreneurs try to get the attention of investors, while at the same they technically develop

their product further.


51

Table 4.2 Authorities responsible for application processing

Country Public Authorities (Ministries and Agencies) Third party involvement (private or public, e.g. expert panels, incubators, sponsors and facilitators)

Denmark ■ Ministry of Business and Growth

■ Danish Business Authority

Start-up Denmark (public body)

■ First Stage: submitting the business idea to an Expert Panel. The panel is

appointed by the Danish Business Authority (whereby the Authority itself is

not involved in the selection process) and selected by the Danish Ministry

of Business and Growth. It consists of consultants from one of the regional

public business development centres who are experts in start-ups and

businesses and who are voluntarily on the selection panel for Start-up

Denmark.

■ The panel reviews the application within six weeks.

France French Tech Ticket

■ Second Stage: Final Selection Committee (experts from the Ministry of

the Economy, Industry and the Digital Sector (Directorate General for

Enterprise), the Ministry of Foreign Affairs and International Development

(Directorate of Enterprise and the International Economy), the Ile de

France Regional Directorate for Enterprises, Competition, Consumption,

Work and Employment (DIRECCTE), Bpifrance Financement, Business

France, the City of Paris French Tech Mission and other qualified

individuals)

Residence Permit for Skills and Talents

■ National Commission of Competences and Talents (members from the

Economic and Social Council, the Ministry of the Interior, Foreign

Ministry, Ministry for Employment, Ministry for the Economy, Ministry of

Education, Ministry of Culture, Ministry for Sport, the French Agency for

International Investment)

French Tech Ticket (private body)

■ First stage: Partner incubators evaluate the applications via an online

interview between the applicants and two experts from the partner

incubators (preselection)

■ Second Stage: Final Selection Committee (see left) selects the maximum

50 start-ups from the preselected applicants

Ireland STEP

■ Investment and Entrepreneur Unit of the Irish Naturalisation and

Immigration Service

■ Enterprise Ireland (that has a dedicated team focused on high potential

start-ups from abroad)

12 month immigration permission scheme (private body)

■ Early stage start-ups have to secure a place on an accelerator


52


■ Application committee chaired by the Department of Justice and Equality

(members from Enterprise Ireland, experts (not immigration officials)

from the Department of Jobs, Enterprise and Innovation; the Irish

Development Agency; the Department of Foreign Affairs and Trade and

the Department of Finance)

Italy ■ Ministry for Economic Development Start-up Visa (private body)

■ Start-up Technical Committee (representatives of national associations

having links with the start-up ecosystem) assesses the application by

checking the innovation-related requirements and the quality of the

business plan

■ A place in an Incubator (not required); in the case a place in an incubator

has been secured, the application is made through the incubator

The

Netherlands

■ Ministry of Economic Affairs

■ Immigration and Naturalisation Service (IND)

■ The Netherlands Enterprise Agency

■ Chamber of Commerce

■ Third party bodies are not involved in the application process, although

successful applicants must work together with a facilitator who provides

guidance for the selected entrepreneurs.

Spain Organic Law 4/2000 (Blue Card)

■ Ministry of Foreign Affairs and Cooperation: Spanish Consular Office in

the country of origin or of residence (if not in country)

Law 14/2013 (National scheme)

■ Spanish Economic and Commercial Office (SEC)

■ General Directorate for International Trade and Investment

(DGCOMINVER)

■ Large Companies Unit of the Ministry of Employment and Social Security

(issuing the residence permits)

■ Ministry of Interior (checking the public order related matters)

■ N/I

United

Kingdom

■ Ministry of Interior ■ N/I


53


■ Immigration services within the UK

Tier 1 graduate entrepreneur visa

■ The entrepreneurs must be endorsed by either

– UK Higher Education Institution (HEI) or

– UK Trade and Investment (UKTI)

Australia Temporary visa: Business Innovation and Investment visa (subclass 188)

■ First step: submitting expression of interest on the online system

SkillSelect

■ Second step: Application to State or territory government of Austrade

(Australian government trade commission)

Permanent visa: Business Innovation and investment Visa (subclass 888)

Permanent visa: Business Talent Visa (subclass 132) - Significant Business

History stream

■ Expression of interest to SkillSelect

■ N/I

Canada ■ Centralized Intake Office (CIO)

■ The Citizenship and Immigration Canada (CIC)

Start-up Visa Programme (private body)

■ Support of one of several designated Canadian organizations (angel

investor group, venture capital fund or business incubator). The investor

organization has to provide a Commitment Certificate directly to

Citizenship and Immigration Canada, summarizing the details of the

commitment made with the applicant

■ Peer Review Process:

– This process is designed to make sure that the deals made between

the investment organizations and immigrant entrepreneurs are

legitimate.

– Panels have been established by an industry association that

represents the type of investment organization making the

commitment. For instance, in the case of an angel investor group, the

National Angel Capital Organization would be responsible for the peer

review panel.


54


– The assessment of the peer review panel is not legally binding on the

immigration officer. It will only confirm that the investment organization

has carried out the proper checks and investigations according to

industry standards.

Chile ■ First step: Submitting application to CORFO (Entrepreneurship and

Innovation Agency of the Government of Chile

■ Second step: Evaluation by the First Entrepreneurship Subcommittee

consisting of entrepreneur representatives (private body)

■ This is part of CORFO and serves as an evaluation entity of the first

entrepreneurial applications. It is composed by professionals (tech experts,

investors and entrepreneurs). The Subcommittee may approve the projects

with the modifications that it deems pertinent, as long as the nature and

general objective of these is not altered, and with the power to require

technical modifications.

New

Zealand

■ Government agency: Business Migration Branch (BMB), standalone

branch of the government that specifically deals with applications under

the business migration (investors, entrepreneurs and employees of a

relocating business).

■ N/I

Singapore ■ First step: Submitting application to the Ministry of Manpower (MOM)

■ Second step: Evaluation by the Standards, Productivity and Innovation

Board Singapore SPRING and MOM jointly

■ N/I

United

States

EB-5 visa and E1 and E2 visa

■ United States Citizenship and Immigration Services (USCIS)

■ US department of State (if outside the US)

H1-B visa

■ First step (a): In order to be granted the H1-B visa, the entrepreneur

employs him/herself. Therefore, the first responsible authorities are the

State Workforce Agencies who determine the actual wage for the

position.

■ First step (b): Afterwards the Department of Labor approves the

■ N/I


55


application

■ Second step: the visa application can be logged with USCIS


56

Generally, it is advantageous to include third party input in the selection process, as these

often bring the expertise necessary to evaluate a project or a business plan. There’s an

increasing tendency for schemes to use third party input in decisions (typically industry

experts and/or early stage finance groups as seen in e.g. France). In principle, these third

parties (either private or public) are in a much better decision to judge quality than

government officials alone as this expertise might not be readily available in public

authorities. Besides the positive aspects of incorporating private bodies in the decision

making process, a potential risk might be that corporate-backed incubators could buy

potential competitors before they are fully developed. Hence, the third party bodies should

be selected by the government to limit the risk of abuse. Before being able to sponsor, the

incubators must be accepted and are re-assessed every year and be listed on the

government website.

Depending on the objectives of the scheme, officials can also play an important role (e.g. if

the programme is specifically designed to help grow certain industry sectors). Still, the

assessment process lacks transparency in terms of decision making. From the available

information it is not clear whether the decisions in the public authorities are made by certain

officers in agencies or other public bodies and what kind of expertise about entrepreneurship

they have. Hence, involving private bodies such as incubators could ensure the ‘quality

control’ of the selection process. The final decision could in any case be made by public

authorities, who could reject applications under specific circumstances79.

In order to evaluate the advantages / disadvantages of the different processes in the

analysed countries, further information about the exact composition and the exact role in the

selection process of the public (including the agencies) as well as the private bodies, such as

incubators and expert panels is necessary. Finally, issues about who is ultimately making the

decisions, are they made in partnership and how the private bodies are incentivised to join

the scheme need to be addressed in order to properly evaluate the decision making process.

4.3 Procedure for submitting the application

EU Member States

In some Member States the application for the entrepreneur schemes is a 2-step process

where first the business plan is submitted to an expert panel for evaluation (DK, FR, IT, UK).

If the panel evaluates the application positively, an application for a residence permit can be

launched at the responsible authority in the Member State (see above).

In other Member States it is rather a single process for the applicant who launches only one

application for the scheme and permit. The government bodies (and private bodies, if

applicable) make the decision and process the visa application (IE, NL, ES).

Further, the applications can be submitted online in some Member States (DK, FR, IT, UK),

whereas in others it has to be submitted either in person or by post such as in Ireland,

Netherlands and Spain.

The process is comparable for the self-employment permits. However, usually there is no

business plan evaluation through expert panels (DK, IT). Applications for self-employment

permits are usually submitted in person or by post (NL, IT).

In several Member States the way the application is submitted differs depending on the

scheme the entrepreneur applies for (e.g. FR, IT).

79 Expert input during the workshop ‘Admission of innovative migrant entrepreneurs’ held by ICF International on 7 March 2016 in Brussels


57


Similarly to the Member State schemes, the process varies in the international schemes. In

Australia, Chile, Singapore and the US the process is a two-step process, and in Canada

and New Zealand it is a single process. The process in Chile is comparable to France and

Denmark and is a two-step process whereby first an online application is lodged. Also the

French application process has been created using the Chilean model. Also in Australia and

Canada the application can be submitted online. In the remaining countries the application

must be submitted per post or in person.

The submission procedure obviously plays an important role in the attractiveness of a

scheme. However, similarly to the duration of the overall procedure is not the 'pull factor', it is

rather an enabler for aspiring entrepreneurs. If the process is simplified, this might be

advantageous for the applicants, but the process itself will most likely not determine the

application decision. However, some points are advantageous:

■ The possibility of an online application is certainly advantageous for both the applicants

and the authorities dealing with the application.

■ A single process is simpler compared to a two-step process. In some Member States the

application procedure is simplified for the entrepreneurs, e.g. in Ireland where they only

have to submit one application either online or in person and the authorities handle

evaluation of the business plan as well as the visa procedures. However, a two-step

process might be necessary in order to keep the division of decision making between

private and public bodies.

■ The fees vary greatly amongst the analysed countries. Information for what exactly the

fees are used is lacking, but obviously a higher fee might attract less applicants.

Table 4.3 below shows a detailed description of the submission process for the different

permits, including the steps and the cost. Concerning the international schemes, it is quite

difficult to compare these to the schemes in the Member States. Exceptions are Chile and

Australia, whereby Chile can be described as a role model for the scheme created in

France and which bears similarities with the selection process in Denmark, as both use the

platform YouNoodle; and Australia as a role model for the introduced schemes in the UK.


58

Table 4.3 Application submission

Country Scheme Submission Application steps Cost

Denmark Start-up Denmark

■ The applicant must create a Case order ID and pay a processing

fee to the Danish Agency for International Recruitment and

Integration, before submitting an application.

■ First step: submitting the application online through the webportal

‘YouNoodle’ (see also Chile) for review to the expert panel

appointed by the Danish Business Authority for review. The experts

review the application within 6 weeks.

■ Second step: application for the residence permit under the Start-

up Denmark scheme online through the webpage of the Danish

Agency for International Recruitment and Integration, if the

evaluation submitted by the expert panel is positive. A positive

evaluation from the experts is not a guarantee for receiving the

residence permit.

Establishment Card

■ Only the second step is applicable

■ Online for both

(regardless

whether the

applicant is

already in

Denmark or

abroad)

■ 2-step process

for Start-up

Denmark

■ Single process

for the

Establishment

card

■ DKK 1,845 (approx. EUR 235)

France French Tech Ticket

■ First step: submitting applications online on the French Tech Ticket

website. Further, applicants must upload a video pitch for their

project. Applications are reviewed by an independent panel. It is

evaluated through the partner incubators via an online interview

between the applicants and two experts from the partner

incubators.

■ Second step: the Final Selection Committee selects the maximum

50 start-ups from the preselected applicants.

Residence permit for skills and talents

■ Applications have to be submitted before entering France at the

embassy or consulate in the country of origin.

Talent passport (from November 2016)

■ Online for the

French Tech

Ticket

■ In person for the

residence permit

for skills and

talents

■ N/I for the talent

passport

■ 2-step process

for the French

Tech Ticket

■ Single process

for the residence

permit for skills

and talents

■ N/I for the talent

passport

■ EUR 99 for the French Tech

Ticket and the residence permit

for skills and talents

■ N/I for the talent passport


59


■ N/I

Ireland 12-month immigration permission

■ Graduates from an Irish university who apply for the 12 month

immigration permission scheme in order to ‘prepare’ for STEP early

stage high potential start-ups are required to first ensure a place on

an accelerator. The accelerator is then supposed to support the

entrepreneurs with the visa application. The entrepreneurs have

the possibility to apply for a permit under STEP after the initial 12

months have passed.

STEP

■ The application has to be submitted by post (also for the 12 month

immigration permission scheme). The committee makes

recommendations to the Minister for Justice and Equality on

applications that should be accepted under the programme. The

committee evaluates whether the criteria, such as the financial

requirements are met, but especially if the start-up is innovative

and if it has export potential. The application committee convenes

four times per year (February, May, September and December) to

access applications.

■ By post for both ■ Single process

for both

■ N/I for the 12-month immigration

permission

■ EUR 350 for STEP

Italy Start-up visa

■ First step: submitting applications by email to the Ministry of

Economic Development, where the Technical Committee assesses

the application. If it is positive, the committee issues the Certificate

of No Impediment and informs the local police headquarter

(questura). When the police has accepted the visa request, the

Committee notifies the applicant and informs the consulate or

embassy in the country of origin, along with the Italia Start-up Visa

contact points within the Ministry of Foreign Affairs, the Ministry of

Interior and the Ministry of Labour.

■ Second step: After receiving the certificate, the applicant can apply

for a Start-up Visa to the consulate, which will then inform the

committee once the visa has been issued.

Visa for autonomous work

■ Online (via email)

/ in person for the

start-up visa

■ In person for the

visa for

autonomous work

■ 2-step process

for the start-up

visa

■ Single process

for the visa for

autonomous

work

■ EUR 16 for the revenue stamp;

■ EUR 27.50 for the residence

permit in electronic format;

■ EUR 30 as a service

commission;

■ EUR 80 for the permit valid up to

1 year (all valid for both visas)


60


■ The application has to be made in person, but unlike the start-up

visa, the first step does not apply (no evaluation through a

technical committee).

The

Netherlands

General self-employment permit and the residence permit for start-up

entrepreneurs

Applicants submit an application directly to the IND using the

application form on the website. The applicants can either submit the

form in person or by post. The IND consults with the Netherlands

Enterprise Agency that gives advice on the application.

■ In person / by post

for both

■ Single process

for both

■ EUR 1.296 for the general permit

■ EUR 311 for start-ups

Spain Organic Law 4/2000 (Blue Card) and the Law 14/2013 (National

scheme)

■ The application of visa and or/residence permit has to be made in

person, accompanied with the necessary documents (see above)

■ In person for both ■ Single process

for both

■ EUR 60 for both

United

Kingdom

Tier 1 graduate entrepreneur visa

■ First step: endorsement (see above), before launching an

application is necessary

■ Second step: Evaluation by the immigration service

Tier 1 entrepreneur visa

■ They may apply outside the UK online, yet have to have their finger

prints and photograph taken at a visa application centre. In the UK

the application would be logged in person.

■ The genuine entrepreneur test is conducted via an application

form, followed by a potential interview and evaluation by the

immigration service

■ Online / in person

for both

■ Two-step

process for the

graduate

entrepreneur

visa

■ Single process

for the

entrepreneur

visa

■ £355 (EUR 445) if the applicants

are applying outside the UK, and

costs £456 (EUR 572) if

extending of switching visas

within the UK (for the graduate

entrepreneur visa)

■ £1,180 (EUR 1,481) by online or

post, or £944 (EUR 1,184) if

applications are made in person

outside the UK (for the

entrepreneur visa)

Australia Temporary visa: Business Innovation and Investment visa (subclass

188)

■ First step: candidates express an interest and specify which state

or territory they seek the nomination from; applicants could

therefore be nominated by a state or territory government of

■ Online / in person

for all

■ Two-step

process for all

■ AUD 4,780 (EUR 3,254)

■ Applicants who do not meet the

English language requirement

must pay a second instalment:

AUD 9,795 (EUR 6,668) for all


61


Austrade (Australian government trade commission). The

expression of interest - SkillSelect is a stage which precedes the

application itself, and serves the purpose of pre-filtering migrants. It

is an efficiency-oriented instrument and provides scope for

employers and states/ territories to assess pre-screened applicants

for sponsorship purposes. The nominators have their own selection

criteria, and may call the applicant for an interview or may want to

be contacted instead.

■ Second stage: candidates may be invited to apply. Once the

applicant receives an invitation, s/he has 60 days to apply to a visa.

If no application is submitted after 60 days, the candidate may

receive another nomination. If 60 days after the second nomination

the candidate does not apply for a visa, s/he will need to submit

another expression of interest to be considered again.

Permanent visa: Business Innovation and investment Visa (subclass

888)

■ Applicants must have been on one of the following temporary visas

for at least one year in the two years immediately before the

application: a Business Innovation visa (subclass 188), a Special

Category visa (subclass 444), and Business (Long Stay) visa

(subclass 457IE).

■ The process is the same as above.

Permanent visa: Business Talent Visa (subclass 132) - Significant


■ The applicant does not require a previous residence period.

■ The process is the same as above.

Canada Start-up Visa Programme

■ The application is submitted to CIC. In addition, the Start-Up Visa

Programme also includes a Peer Review Process to ensure

whether the deals made between the investment organizations and

immigrant entrepreneurs are legitimate. Panels have been

established by an industry association that represents the type of

investment organization making the commitment. For instance, in

■ Online / In person

for all

■ Single process

for all

■ Work permit (CAD155; EUR 106)

■ Work permit – max fee for group

of three or more performing staff

(CAD 465; EUR 319) for all


62


the case of an angel investor group, the National Angel Capital

Organization would be responsible for the peer review panel. In

cases, where the group making the commitment is a venture

capital fund, Canada’s Venture Capital and Private Equity

Association would be the authority responsible. The assessment of

the peer review panel is not legally binding on the immigration

officer. It will only confirm that the investment organization has

carried out the proper checks and investigations according to

industry standards.

Self-employed Persons Programme and individual provincial

entrepreneur programmes

■ Applicants are first selected by a province if they satisfy the basic

requirements. Once selected, they may then apply to Citizenship

and Immigration Canada for permanent residence.

Chile Start-up Chile

■ First step: The admission process is done with the support of

YouNoodle, a California-based company that provides a

technology platform used by leading entrepreneurship clubs and

university competitions worldwide. The applications are reviewed

by a committee at CORFO (Entrepreneurship and Innovation

Agency of the Government of Chile). Once accepted into program,

the applicant need to bring all documentation required by the local

consulate.

■ Second step: Once the evaluation is concluded, the project is

presented to the First Entrepreneurship Subcommittee, which will

decide, upon recommendation from the Entrepreneurship

Management, upon the project’s approval or rejection of the

project. CORFO inform its decision to approve, reject or leave

pending the business project, within the 48 hours following the

Subcommittee decision. The entrepreneurs selected have to sign a

contract with CORFO, where the grant will be delivered in two

equal instalments of 30 million CLP (approx. € 39.000).

■ Online / in person ■ Two-step

process

■ N/I

New

Zealand

Entrepreneur Work visa

■ The applicant must show evidence of capital, must compile the

■ Per post ■ Single process ■ NZ$ 3,340 (EUR 2,040) if the

application is lodged in New


63


points-based self-assessment and submit the business plan. The

application is sent by post to the Business Migration Branch in

Wellington (BMB) dealing with applications under the business

migration (investors, entrepreneurs and employees of a relocating

business).

Zealand and the rest of the world;

■ NZ$ 2,282 (EUR 1,393) if lodged

in pacific countries

Singapore EntrePass

■ A c6omprehensive business plan of around 10 pages (along with

the application form for EntrePass) is required. The application is

submitted to the MOM that jointly with the SPRING evaluates the

applications. After a positive evaluation the entrepreneur receives

Approval In-Principle (AIP) letter and has to register the company

within 30 days. Only after this first registration MOM issues a final

approval letter (In-Principal Approval letter (IPA)).

■ In person / per

post

■ Two-step

process

■ N/I

United

States

EB-5 visas and E1 and E2 visas

■ First step: Before coming to the US applicants must submit the File

Form I-526, Petition by Alien Entrepreneur (to USCIS) and upon

approval of Form I-526 petition, either:

– File Form I-485, Application to Register Permanent Residence

or Adjust Status, with USCIS to adjust status to a conditional

permanent resident within the United States; or

– File DS-230 or DS-260, Application for Immigrant Visa and Alien

Registration, with the U.S. Department of State to obtain an EB-

5 visa for admission to the United States. ■ Second step: The approval of the I-485 application or the entry into

the United States with an EB-5 immigrant visa, grants a conditional

permanent residence for a two-year period for the EB-5 investor

and his/her derivative family members. One may apply for an E-1

or an E-2 visa from either inside or outside the US by submitting a

Form I-129 either at the California Service Centre or Vermont

Service Centre.

H1-B visa

■ First step: Once the LCA is accepted by the Department of Labor,

the employer is able to submit a completed ‘Form I-129’ or Petition

for a Non-immigrant Worker – which is the application form for the

■ In person / per

post for all

■ Two-step

process for all

■ USD 1,225 for EB-5 and E1 / E2

■ N/I for H1-B


64


temporary visa for the qualified worker - to USCIS. This form

includes fields on the job offer.

■ Second step: Once the Form I-129 petition has been approved, the

prospective H-1B worker who is outside the United States may

apply with the U.S. Department of State (DOS) at a U.S. embassy

or consulate.


V3: 20th 2016 65

4.4 Duration of the residence permit and renewal conditions

EU Member States

Most permits under the entrepreneur schemes are valid between 1 and 2 years, with the

possibility for renewal (see below). The permits for self-employed issued by certain Member

States have a similar duration, or are even longer (e.g. in France).

Also, most of the permits issued by Member States are renewable. However, there are

differences in the length and conditions of renewal.

In Denmark, the residence and work permit under the Start-up Denmark scheme is issued

for a maximum duration of 2 years. Also the Establishment card is issued for a maximum of

2 years, but cannot be extended. The permit under Startup Denmark can be extended for 3

years, if all the conditions of the original residence permit are still met. The entrepreneurs

receive a residence permit letter outlining the exact conditions for the permit. The application

for an extension may be submitted three months before the original permit expires. In order

to be granted an extension, all the conditions of the original residence permit must still be

met and a new evaluation from the expert panel must be included. The entrepreneurs

receive a residence permit letter outlining the exact conditions for the permit. The fee for the

extension is the same as for the original permit and has to be submitted to the Danish

Agency for International Recruitment and Integration. As of now, there have been no

renewals yet for the visa under start-up Denmark and the criteria for renewal have not been

substantiated yet. In a recent ‘Expert Seminar on the Attraction of Entrepreneurial Talent to

the EU’ held in Brussels on 23 June 2016 a representative from the Danish Business

Authority outlined that Start-up Denmark is running only for a 3 year experimental period,

after which the scheme will be evaluated.80 As for the Establishment card, the maximum

duration of 2 years cannot be extended. However, after having a residence in Denmark for 2

years under card, the entrepreneurs may apply for a residence permit under the Start-up

Denmark scheme.

The residence permit issued in France under the French Tech Ticket is the shortest; it is

issued for 6-months, which is the duration of the programme, (with the possibility of a one-

time extension for another 6 months). In contrast, the Residence Permit for Skills and

Talents is issued for 3 years and is renewable. The talent passport to be introduced in

November 2016 is supposed to be valid for a maximum of 4 years.

In Ireland successful applicants in STEP are given a multiple-entry visa for the period of 2

years as well. The 12-month immigration permission is issued only for 1 year as a

preparation for a STEP application. STEP can be renewed for another three years. In order

to qualify for a renewal the following conditions are required:

■ The start-up has remained in place;

■ Assessment by the Evaluation Committee of the success or viability of the investment;

■ Entrepreneurs maintain good character;

■ Entrepreneurs maintain the private medical insurance and not having recourse to

publicly funded welfare programmes.

In contrast, the 12 month immigration permission scheme is seen a step towards the

preparation for STEP and is not renewable.

The start-up visa in Italy has a shorter duration and is valid for 1 year; the autonomous work

visa is valid for 2 years. The start-up visa can be renewed under the condition that the third-

country national has successfully set up an innovative start-up. The success of the start-up is

proven by the company’s registration in the innovative start-up register to the local police

headquarter, and the registration certification, along with the self-assessment tax return,

have to be presented for renewal. Also the permit for autonomous work is renewable.

80 Expert Seminar on the Attraction of Entrepreneurial Talent to the EU, 23 June 2016, Brussels


V3: 20th 2016 66

In the Netherlands the residence permit for start-up entrepreneurs is issued for 1 year.

Under the self-employment scheme, the entrepreneur will be granted a residence permit for

2 years. The start-up entrepreneur may have the duration of their residence permit for start-

up entrepreneurs extended on the basis of the Dutch government’s self-employment

scheme. Since December 2015, in order to receive a renewal, a written statement from the

facilitator must be obtained that the start-up has performed to ‘satisfaction’ during the first

year of stay. The residence permit under the self-employment scheme can be renewed for 5

years. In order for the period of validity of a residence permit to work on a self-employed

basis to be extended, the person must demonstrate that they meet the means requirement.

In Spain, under the organic law 4/2000 a temporary residence and self-employment permit

is issued for 1 year. This permit is limited to a particular geographical area and to a particular

sector of activity. Under the law 14/2003 the entrepreneurs are granted a 1-year residence

visa. After the first year, and once the business has been started, the entrepreneurs may

apply for a residence permit without having to apply for a visa or the previous minimum stay

period. This permit is valid for 2 years, renewable. Any business residence permit obtained

under this national scheme, is valid throughout Spain. After the first year, and once the

business has been started, the entrepreneurs may apply for a residence permit without

having to apply for a visa or the previous minimum stay period. This permit has is valid for

two years, renewable. Entrepreneurs may apply for a residence permit regardless of their

physical presence in Spain. Their situation is analysed on a case-by-case basis by the

Ministry of Employment and Social Security.

The longest permit is issued in the UK, under the Tier 1 Entrepreneur route. Visa holders are

allowed to stay in the UK for 3 years and 4 months and may extend their visa for 2 years.

Concerning Tier 1 Graduate Entrepreneurs, successful applicants are granted a visa for 1

year and may extend their visa for another year. In order to apply for extensions under the

Tier 1 visa, entrepreneurs must have invested their funds, established themselves in a

business and created at least two jobs for resident workers. Visa holders must stay for at

least 180 days a year within the UK. Extensions under the Tier 1 graduate scheme are

possible when the entrepreneurs apply with a new endorsement letter and £945 to support

themselves. If the business is successful applicants can switch into the Tier 1 Entrepreneur

visa at the end of two years.


The Australian Business Innovation and Investment visa is valid for 4 years and 3 months.

After this period, it can be extended once for other 2 years. To show that the foreign

entrepreneur, meets the objectives of the scheme, s/he is expected to fulfil at least one of

the following requirements:

■ develop business links with international markets

■ create or maintain employment in Australia

■ export Australian goods

■ produce goods or services that would otherwise be imported

■ introduce new or improved technology

■ add to commercial activity and competitiveness within the Australian economy.

After one successful year the entrepreneur has also the possibility to apply for the

permanent visa (subclass 888).

Unlike entrepreneurship programs in other countries, successful applicants in Canada can

benefit from permanent residents status with no conditions related to the success of their

business.

The permit under start-up Chile is valid for 1 year which is comparable to most permits

under EU Member State schemes. A visa extension is not possible under the start-up Chile

Seed programme. However, the entrepreneurs may apply for a second track of start-up


V3: 20th 2016 67

Chile, the Scale programme81 for one year. This programme can be renewed for a second

year. According to the Chilean government the entrepreneur might apply for a work visa

extension afterwards. The duration of this extension is not specified82.

In New Zealand the Entrepreneur Work Visa is a temporary visa, but before it expires (3

years), the entrepreneur can apply for a long term visa (called Entrepreneur Residence Visa)

via two streams:

■ the first addresses migrants who have already spent at least 2 years in New Zealand on

a visa that allowed self-employment activities (not necessarily an entrepreneur visa);

■ the second is a fast-track route and addresses migrants who have held for at least the

previous 6 months an Entrepreneur Work Visa (or its predecessor, the Long Term

Business Visa) and have invested at least NZ$ 500,000 in the business and created at

least three full-time equivalent jobs for New Zealanders.

The EntrePass in Singapore is valid for 2 years and is renewable if a minimum of 2 jobs

after and a minimum of EUR 65,000 of business spending is documented within 1 year.

Visas issued in the US differ in duration. The E1 and E2 visas remain indefinitely renewable

after the initial 2 years. However, they are never converted in permanent visas. With the EB-

5 visa, a 2-year conditional permanent resident status ("green card") is granted and can

afterwards be converted into a permanent visa. The H1-B visa is temporary and cannot be

converted into a permanent visa.

Table 4.4 provides an overview of the duration and renewal possibilities of the different

residence permits in the analysed countries.

Table 4.4 Duration of the permits

Country Scheme Duration (in years) Renewal

Denmark ■ Start-up Denmark

■ Establishment Card

■ 2

■ 2

■ Yes, for 3 years

■ No

France ■ French Tech Ticket

■ Residence permit for skills and

talents

■ Talent passport (from November

2016)

■ 0.5

■ 3

■ 4

■ Yes, for 0.5 years

■ Yes, same

duration

■ N/I on renewal

Ireland ■ 12-month immigration

permission

■ STEP

■ 1

■ 2

■ No


Italy ■ Visa for autonomous work:

■ Start-up visa

■ 2

■ 1

■ Yes, same

duration

■ Yes, same

duration

The Netherlands ■ General self-employment permit

■ Residence permit for start-up

entrepreneurs

■ 2

■ 1


■ Yes, on the basis

of the general self-

employment

permit

81 http://startupchile.org/about/scale/ (accessed 12 May 2016). 82 http://chile.gob.cl/en/que-hacer/para-trabajar-en-chile/ (accessed 10 May 2016).

http://startupchile.org/about/scale/

http://chile.gob.cl/en/que-hacer/para-trabajar-en-chile/


V3: 20th 2016 68

Country Scheme Duration (in years) Renewal

Spain ■ Organic Law 4/2000 (Blue Card)

■ Law 14/2013 (National scheme)

■ 1

■ 1


(again renewable)


(again renewable)

United Kingdom ■ Tier 1 entrepreneur visa

■ Tier 1 graduate entrepreneur

visa

■ 3.4

■ 1


■ Yes, for 1 year and

after 2 years in

total switch to Tier

1 entrepreneur

visa

Australia ■ Temporary visa: Business

Innovation and Investment visa

(subclass 188)

■ Permanent visa: Business

Innovation and investment Visa

(subclass 888)

■ Permanent visa: Business Talent

Visa (subclass 132) - Significant


■ 4 years and 3

months

■ Permanent

■ Yes, once for other

2 years, under the

Business

Innovation

Extension Stream.

Canada ■ Start-up Visa Programme

■ Self-employed Persons

Programme

■ Individual provincial entrepreneur

programmes

■ Permanent ■ permanent

Chile ■ Start-up Chile ■ 1 year ■ Not under start-up

Chile

■ Work visa

application

possible

New Zealand ■ Entrepreneur Work visa ■ 3 years ■ Yes, permanent

Singapore ■ EntrePass ■ 2 years ■ Yes

United States ■ EB-5 visas

■ E1 and E2 visas

■ H1-B visa

■ 2-year

conditional

permanent

resident status

■ 2 years

■ N/I

■ Yes, permanent

■ Yes, renewable

indefinitely

■ Yes

The international schemes offer a long term perspective and the temporary visas are in most

cases several years long. This enables the entrepreneur to set up the company and settle in

the country. Usually after the initial temporary visa a permanent permit is granted.

Most of the schemes from the EU Member States are valid either a year or less and the

access to permanent residency is often possible only after 5 years of residence.

It is difficult to estimate whether the duration of the permits has an influence of the

attractiveness or the success of the schemes. For instance in France, the permit duration is


V3: 20th 2016 69

short and it is only once renewable, but the number of applications is higher than e.g. in

Ireland where STEP can be renewed for 3 years.

Finally, it is questionable whether the perspective of long-term residence such as e.g. in

Australia contributes to the attractiveness of a country for ‘innovative’ entrepreneurs. It is

more likely that these entrepreneurs will choose countries / regions where they have

important support and readily available ecosystems (such as France or Chile).

4.5 Status changes

EU Member States

In Denmark, a change of status to a work visa is possible. Entrepreneur may apply under

both schemes for a six months visa (‘green card’) to look for a job. A status change to a work

visa is possible in Italy as well. If the self-employed worker finds her/himself unemployed

when renewing the permit, s/he can ask for a ‘job seeking permit’, which lasts for 1 year and

it is not renewable but can be converted into a ‘ permit for employed or self-employed

activities’. In the UK entrepreneurs under the Tier 1 track may extend their permits and after

the end of the extensions they are able to apply for permanent settlement. If switching to the

visa from another category, applicants can apply for a three year extension, and afterwards

apply for permanent settlement. However, entrepreneurs under the Tier 1 graduate track are

not eligible for permanent settlement under this visa. They can change their status to the

general Tier 1 track after being 2 years under the Tier 1 graduate entrepreneur scheme. It

can be assumed that after changing to the general Tier 1 track the former graduate

entrepreneurs fall under the rules of Tier 1 and are thus eligible for permanent settlement.

In Spain the scheme under the law 14/2013 allows the possibility to shift from one status to

another between different types of permits when the third-country national has already

legally resided in Spain. For instance, of a particular interest is the shift between the statuses

of students of business schools to entrepreneurs. It is unclear whether a change of status is

possible for entrepreneurs under both schemes in Spain, since applications of entrepreneurs

are analysed on a case-by-case basis by the Ministry of Employment and Social Security.


The foreign nationals holding a Business Innovation Visa in Australia are entitled to

establish his/her business in Australia, travel in, out and across Australia, bringing family

members on the same visa and, after one successful year, change their status and apply for

the permanent visa (subclass 888).

In Canada all visas are permanent and all entrepreneurs under the schemes have the same

working standards and equal labour rights to residents born in Canada.

There are no information available on the possibility of status change in Chile, Singapore,

New Zealand or the US. The entrepreneurs are able to establish their business. Assuming

that they want to undertake a job as an employee they will most likely have to apply for

another visa. The peculiarity of the H1-B visa allows the entrepreneur to be employed by

his/her company.

In sum, in most schemes issued by the Member States a status change is possible.

However, in some Member States it is unclear whether a change of status is possible and

how this is conducted in practice. The same is valid for international schemes. More

importantly than a status change from the entrepreneur permits to other permits, is the

possibility to change from another permit to the entrepreneur permits. Especially, enabling

students and researchers who are already on a student/research visa to change to an

entrepreneur visa (such as in the UK) might attract a critical mass of bright people. On EU

level recent changes to the entry and residence of students and researchers have been

introduced by the Directive 2016/801 (recast) on the conditions of entry and residence of

third-country nationals for the purposes of research, studies, pupil exchange, remunerated


V3: 20th 2016 70

and unremunerated training, voluntary service and au pairing. The Directive creates a single

instrument covering all these groups of third-country nationals, clarifying and improving the

conditions for entry and residence. It applies to TCN researchers, students, pupils,

remunerated and unremunerated trainees, volunteers and au pairs. The Directive enables

students and researchers to stay in a Member State after the end of studies/research and to

set up a business, as explained below83:

■ Simplification of intra-EU mobility for students and researchers: movement between

Member States for up to three months to carry out research or for study purposes is

possible without applying for a new permit (Articles 27 and 28).

■ Entrepreneurial activities for students and researchers: after finalisation of research or

studies in the Member State, TCNs shall be entitled to stay on the territory of the

Member State for a period of at least nine months in order to look for work or set up a

business (Article 25).

83 Council Directive 2016/801 of 11 May 2016 on the conditions of entry and residence of third-country nationals for the purposes of research, studies, training, voluntary service, pupil exchange schemes or educational projects and au pairing.


V3: 20th 2016 71

5 Rights granted under the scheme

5.1 Labour market access rights

EU Member States

In the analysed Member States the entrepreneurs have the right to establish a business.

However, whether the entrepreneurs have other labour market access rights, i.e. take up

employment in another company can often not be clearly derived from the permits.

In the Netherlands, both the holders of self-employment residence permit and the residence

permit for start-up entrepreneurs are allowed to work in the Netherlands besides starting up

an innovative business, if the employer has a work permit for employers (TWV). This means

that the entrepreneur is only allowed to work on a self-employed basis without a TWV to set

up a business as submitted for the residence permit. In short, if an entrepreneur has a

residence permit for start-up entrepreneurs s/he may work besides the start-up only if s/he

also has a TWV. If not, the entrepreneur may not work outside the boundaries of the start-up

entrepreneur permit.

As for the rights in the UK, in both entrepreneur routes, visa holders can set up and run

multiple businesses and can be self-employed. However, they cannot work outside their

businesses. Under the Tier 1 Entrepreneur route visa holders are permitted to study but will

need to obtain an ATAS certificate. Under the Tier 1 Graduate Entrepreneur route, migrants

are not allowed to work as a doctor or dentist in training, or work as a professional

sportsperson.

In Denmark an entrepreneur may establish a business under the Start-up Denmark scheme.

It is likely that the entrepreneur is only allowed to take up employment in another company, if

he/she changes from the original permit under the scheme to a work permit in Denmark. This

is also the case for France, Italy, Ireland and Spain where the labour market access is not

applicable outside the entrepreneur and self-employment schemes.


The access to labour market half of international schemes is quite different, compared to the

schemes in the EU Member States. In Australia and Canada, once permanent residents,

entrepreneurs and self-employed persons do not face any restrictions to their labour market

access or mobility. Also in the US the entrepreneurs have access to the labour market.

However, this is coupled with the 2 year conditional period for the EB-5 visa. In terms of H1-

B visa, the holder has the right to work as an employee in his/her own company. Change of

job is only possible, if an application for another temporary visa is lodged. However, in Chile,

New Zealand and Singapore (as in most EU Member State schemes) the entrepreneurs

have no access to the labour market outside the entrepreneurship permit.

In most of the analysed countries the entrepreneurs are bound to their business through the

permit. How this influences the success of the different permits is difficult to assess, as the

permits in the countries attract a different amount of applicants, and subsequently have a

different amount of jobs created or investment attracted. As is the case with the majority of

the earlier discussed admission criteria, the right to access the labour market might not be as

important as the possibility to access capital easy and have connections to an ecosystem

including venture capital funds and/or business angel circles and a transparent access to

financial capital through accelerators, incubators, venture capitalists, business angels etc.

that can support the scale up of the business.

5.2 Family reunification rights

EU Member States

The right to family reunification in the European Union is regulated by Directive 2003/86/EC

on the right to family reunification. The Directive aims to enable family members of non-EU


V3: 20th 2016 72

nationals to join them in the EU country in which they are residing. The Directive applies to

all Member States, except Denmark, Ireland and the United Kingdom. TCNs who hold a

residence permit valid for at least one year in one of the EU Member States with an option of

long-term residence can apply for family reunification84. Therefore, in all the schemes in the

EU Member States85 (except for the French Tech Ticket where it is not addressed) family

reunification is possible and family members have immediate full access to the labour market

(except for the Tier 1 Graduate Entrepreneur Visa in the UK; the 12-month immigration

permission scheme and the business permission scheme in Ireland and the self-employment

and start-up permit in the Netherlands where this is not specified). The family members are

usually defined different between the countries. However, in all Member States they include

the spouse as well as children under the age of 18 who are living with the entrepreneurs. In

some Member States, also registered partners or cohabiting partners are considered (DK,

IE, NL, UK).

Generally the entrepreneurs must prove that they are able to support their family members

for the first year of stay. The application process is comparable to the one conducted by the

entrepreneur and the duration of the residence permit of family members is normally the

same duration as the permit of the entrepreneur.


Also in all the international schemes family reunification is possible and family members

including the spouse and children under 18 (21 in Singapore) have access to the labour

market. The rights and duties are comparable to the EU Member States. The family

members of the entrepreneurs are registered under the same application and the

entrepreneur must prove that she/he has sufficient funds to support the family members

once they arrive in the country. Further, in the international schemes the family members

receive usually immediately permanent residence. Only in the US, the family members

accompanying entrepreneurs under the EB-5 visa have access to the labour market after the

2 year conditional period.

Family reunification plays an important role in the long-term perspectives of the

entrepreneurs. As this is offered by all the schemes, there is no obvious advantage of one

scheme compared to another. However, it should be noted that in the case of the French

Tech ticket it remains unclear how entrepreneurs could pursue family reunification.

5.3 Facilitation/’fast-track’ to permanent residence/citizenship

EU Member States

The long term residence in the European Union is regulated by Directive 2003/109/EC

concerning the status of third-country nationals who are long-term residents (LTR). It

concerns TCNs who have resided legally and continuously within the EU territory for five

years immediately prior to applying for long-term residence. The Directive applies to all

Member States, except Denmark, Ireland and the United Kingdom.

The national entrepreneur permits offer no facilitation compared to other permits. The

entrepreneurs have the right to permanent residence only after 5 years of residence in the

Member States as set out by EU Directive 2003/109/EC on long term residence. Some

Member States might offer a shorter timeframe, however this is usually independent of the

entrepreneurs permit, meaning that the permit itself does not provide the holder with any

benefits concerning permanent residence or citizenship.

Only in the UK (Tier 1 entrepreneur visa) entrepreneurs have a fast-track to permanent

residence and subsequently citizenship. With a Tier 1 Entrepreneur visa to apply for

accelerated settlement (indefinite leave to remain) within the UK after their initial three years.

84 Council Directive 2003/86/EC of 22 September 2003 on the right to family reunification 85 Including Denmark, Ireland and the UK although these Member States don’t transpose Directive 2003/86/EC


V3: 20th 2016 73

For this to occur, they must prove that they have created at least ten full time jobs in the UK

business, or work in a business that has a net increase of GBP 5 million (approx. EUR 6.2

million).


The international schemes offer in most cases a longer period for the ‘short term visa’ (e.g. 4

years and 3 months in Australia) and immediate permanent residence in Canada. Also

naturalisation is usually facilitated. For example, in New Zealand, entrepreneurs have

facilitated access to the permanent Entrepreneur Residence Visa.

The US is an exemption, since the E-2 and H-1B visas do not offer the possibility for

permanent residence, but the applicant has to apply for a Green Card for permanent

residency. However, the EB-5 visa offers permanent residence after holding the visa for 2

years. A number of issues have been identified when applying for a Green Card from a H1-B

visa. Firstly, the waiting times can be quite long – on average 2-3 years but can be

prolonged in time even to 10 years. Secondly, once holders of H-1B have started the

process of filing for a green card they cannot change employers or even take a new job with

their current employer without getting pushed to the back of the queue.

The facilitated access to long term residence and citizenship differs largely between the

schemes in the EU Member States and the international schemes. However, Comparison

between the international countries and Europe is hard. The prerequisites are different, most

of the international countries are immigrant countries with a long history in attracting highly

skilled third country nationals, whereas EU Member States only recently started attracting

highly skilled third country nationals through specific schemes. However, permanent

residence is possible in the Member States after a period of 5 years, which might be a

reasonable period to start and scale-up a business.

Finally, a pathway to permanent residence and/or citizenship is certainly a point that

enhances the attractiveness of a particular scheme.


V3: 20th 2016 74

6 Statistical overview

Part of this study included collection of statistics and data for 13 countries (seven EU and six

third countries). This was done through national data collection exercise. Disaggregated

statistics were collected where available (by age, nationality, gender, industries/sectors,

refusals, etc.). Issues of comparability should be highlighted. Firstly, statistics were not

available in some cases for the same time period. Moreover, some of the EU schemes were

adopted very recently and statistics are therefore available only for 2015. The maturity of the

schemes should also be taken into account – i.e. when schemes have been introduced

rather recently, there could be some adjustment period until the schemes become more

broadly known. Secondly, as outlined in section 3, the schemes have different admission

criteria and vary in terms of eligibility, which should also be taken into account when

comparing the take-up numerically. Thirdly, some schemes are subject to quotas and thus,

the number of visas is already pre-determined. Finally, it should be noted that entrepreneurs

can use other migration routes and channels or switch from one type of visa to another

which have not been examined as part of this study.

To allow for better comparability, the statistics of the general self-employment schemes are

examined separately from the start-up visas/entrepreneurship residence permits.

6.1 Comparative analysis of statistical data for start-up visas/entrepreneurship residence permits under the examined EU schemes

6.1.1 Number of applications and start-up/entrepreneurship visa/residence permits issued

Table 6.1 below shows that the highest number of residence permits/visas for entrepreneurs

issued in the examined EU countries is recorded by far in the UK – a total number of 15,888

permits granted in the period 2010-2015. This is also the case when accounting for annual

averages, amounting at 2,648 on average per annum. The higher numbers of the UK

scheme are due to the fact that the scope of the UK scheme is much broader than the rest of

"Start-Up visas" (see also Annex 7 below).

The remaining EU start-up visas have issued fewer permits. UK is followed by a distant 300

permits issued in France under the residence permit for skills and competences and 50

Paris Tech tickets issued (the France Tech Ticket is an exception as it is capped at 50 per

year). This is followed by Spain (82), Italy (40), Denmark (52) and the lowest in the

Netherlands (21).

When accounting for residence permits per 100,000 of the total population (see also table

below), the ratio remains similar. The highest number of start-up visas have been granted in

the UK with 8.5 start-up visas granted per 100,000 of total population in 2014; followed by a

distant 0.7 in Ireland and 0.5 in Denmark. The lowest numbers issued per 100,000 of the

population is recorded in Italy with 0.06.

In terms of acceptance rate (from the number of applications submitted), this has been the

highest in Italy (65.6%), followed by Ireland (57%), the Netherlands (22%), Denmark

(18%) and France (3%). In the Netherlands, in total 95 applications were submitted in 2015

from which 21 residence permits were granted, 26 are in progress, 28 were denied and 20

were retracted. No information on acceptance rate is available for Spain and the UK. The

low acceptance rate in some countries (e.g. NL and DK) may mean that these schemes are

highly selective. In Denmark, although, there seems to be no limited target for the Start-up

Denmark scheme, it is clearly aimed at a limited number of participants, rather small scale to

attract innovative, tech-driven businesses. However, it should be noted that the schemes in

Denmark and the Netherlands have been introduced very recently in 2015 and an

adjustment period should be allowed when potential applicants become familiar with the

schemes in order to make more robust observations. Further analysis on the success of the

schemes in terms of the number of applicants attracted is presented in Section 7.1. Further


V3: 20th 2016 75

exploration of statistics, including through comprehensive data collection from relevant

stakeholders will contribute to filling the knowledge gaps of the available information.

Qualitative interviews will enhance the understanding of the success of the schemes.

6.1.2 Refusal rate of start-up projects

Reasons for refusals are only available for Italy. In 2015, 21 start-up projects were rejected

out of 61 in Italy86. As regards the rejection reasons, 11 applications presented a weak or

not innovative business plan, six applications were rejected because manifestly falling short

of the basic requirements, while four were in the assessment stage.

Further data on the refusal rate will be beneficial for the understanding of what type of

applicants are attracted and whether the criteria have been set too low/high to attract the

right audience.

6.1.3 Profile of visa/permit holders

In terms of the profile of visas holders, in the UK, a third of in-country applicants were from

Pakistan alone, followed by over a fifth from India, and a tenth from Nigeria and China

each87. In France, the top five applicants’ countries were India, US, Russia, Brazil and

Egypt.88. In Italy, the applicants were from 16 countries of origin: Armenia, Argentina,

Australia, Brazil, China, South Korea, Egypt, Japan, Iran, Israel, Lebanon, Nepal, Nigeria,

Pakistan, US, Uzbekistan89.

6.1.4 Gender rate of applicants

As for data on gender disparities not all country researchers managed to find available

information. This being said, we have captured these data in a descriptive manner for two

countries: in the UK 25.9% of migrant entrepreneurs were female (2014 data). In 2015, the

start-ups applicants in Italy were mostly men (45) compared to women (16).

86 Ibid, Sintesi dati Start-up Visae Start-up Hub, http://www.sviluppoeconomico.gov.it/images/stories/documenti/Sintesi_dati_Italia_Start-up_Visa_Hub_31_12_2015.pdf 87 https://www.gov.uk/tier-1-entrepreneur/overview 88 The Government of France (2016), “French Tech Ticket. Paris, the capital of start-ups!”, http://www.gouvernement.fr/en/french-tech-ticket 89 Ufficio centrale di statistica, http://ucs.interno.gov.it/FILES/AllegatiPag/1263/IMM_INT00048_DPS_2015.pdf

http://www.sviluppoeconomico.gov.it/images/stories/documenti/Sintesi_dati_Italia_Start-up_Visa_Hub_31_12_2015.pdf

http://www.sviluppoeconomico.gov.it/images/stories/documenti/Sintesi_dati_Italia_Start-up_Visa_Hub_31_12_2015.pdf

https://www.gov.uk/tier-1-entrepreneur/overview

http://www.gouvernement.fr/en/french-tech-ticket

http://ucs.interno.gov.it/FILES/AllegatiPag/1263/IMM_INT00048_DPS_2015.pdf


V1: 18th April 2016 76

Table 6.1 Start-up visas/residence permits entrepreneurs: Number of applications submitted, residence permits granted and top nationalities

Country/ scheme

Timeframe Applications Permits granted Permits granted per 100,000 population

Top nationalities

DK/

Start-up visa

2015-2016 238 applications (from 344 TCNs)90 52 (21%)91 0.5 India, United States,

Pakistan

FR/

Tech ticket

2015 722 startup projects were submitted, for a total of

1,372 applicants and 5,677 expressions of

interest from over 100 countries

50 (quota-based) 0.07 India, United States,

Russia, Brazil and

Egypt

FR/

Residence permit for

skills and talents

2008-2011 No information Less than 300 per annum 0.4 No information

IE/

STEP

1 January 2012

until 1 January

2015

52 applications 30

0.7

No information

IT/

Start-up visa

2014-2015 61 (43 of which in 2015) 40 0.06 18 countries of origin -

Russia and Ukraine

the highest

NL/

Residence permit for

start-up entrepreneurs

2015 95 21 0.1 US (6), Russia (4),

Canada (3)

ES/

Residence permit Law

14/2013

2014 No information 82 0.2 No information

UK/

Tier 1 Entrepreneur

2010-2015 No information 2010-2015: 15,888

2015 (Q2): 3,253

2014: 5,488

2013: 4,493

2012: 1,504

2011: 781

2010: 369

8.5 (2014) in 2014, Pakistan,

China, USA and India

accounted for around

half of all applicants

UK/ 2012-2015 No information 2012: 27 0.9 (2014) India, China and the

90 Possibility for joint applications of max. 2 candidates; Data 91 Data provided by a representative from the Danish Business Authority during the Expert Seminar on the Attraction of Entrepreneurial Talent to the EU, 23 June 2016, Brussels


V1: 18th April 2016 77

Country/ scheme

Timeframe Applications Permits granted Permits granted per 100,000 population

Top nationalities

Tier 1 Graduate

Entrepreneur

2013: 206

2014:564

2015 (Q2): 596

US

Australia/

Business Innovation and

Investment programme

(temporary)

2012- 2013 2012 : 429

2013: 739

2012: 46

2013: 342

0.04 (2013)

No information

Australia/

Business Innovation and

Investment programme

(permanent)

2012- 2013 2012: 5

2013: 12

2012: 0

2013: 11 0.2 (2013) No information

Australia/

Business Talent

(permanent)

2012- 2013 2012: 97

2013: 144

2012: 15

2013: 57

0.2 (2013) No information

Canada/

Start-up Visa Program

2013-2015 60 applications 16 0.04 No information

Chile/

Start-up Visa

2010-2012; 2015 2010-2012: 15,000

2015: 2,448

Quota set at 200-250 per

annum

0.14 2015

Chile (30%), USA

(20%), Argentina (6%),

Brazil (6%) and India

(6%)

New Zealand/

Entrepreneur Work Visa

2014 412 196 4.35 Chinese, South

Korean, British and

Japanese

Singapore/

EntrePass

2012-2013 2012: 1,300

2013:1,000

2012: 750

2013: 500

14 (2012)

9.4 (2013)

No information

Source: Country Fiches and Population from World Bank population statistics for the respective year

6.2 Comparative analysis of statistical data among international start-up schemes

The Table 6.2 below provides comparative evidence of the evolution of start-

up/entrepreneurship schemes rates over time in the countries compared. The findings report

the role of different schemes in terms of the number of applicants and permits issued under

a specific scheme. Application lodged/granted rates are more evident for some countries,

such as Chile, Singapore and New Zealand. In other economies, such as Australia, Canada

and the US, the rates exhibit more ambiguous patterns.

Given the cross-country evidence gathered, the statistical precisions are limited. The

information were in general not available in most of the countries.

Table 6.2 Permits lodged and granted by country

Permits under different international schemes

Countries/

Schemes

2010 2011 2012 2013 2014 2015

LG GR LG GR LG GR LG GR LG GR LG GR

Australia

Business

Talent

(permanent)

N/a 97 applications lodged 15 granted

144 applications lodged 57 granted

N/a N/a

Business

Innovation

and

Investment

programme

(temporary)

N/a

429 applications lodged and 46

granted N/a

Business

Innovation

and

Investment

programme

(permanent)

N/a 5 applications lodged and 0 were

granted 12 were lodged and 11 granted

N/a

Canada

Start-Up visa N/a 16 N/a N/a 60

Chile

Start-up visa 15,000 applications lodged N/a 2,448 1,000

Singapore

EntrePass N/a 1,300 N/a 1,000 N/a

New Zealand

Study for an Impact Assessment on a proposal for a revision of the Council Directive 2009/50/EC (‘EU Blue Card Directive’) – Request for Service №31 under Framework Contract VT/2012/024 Lot 2

79

Permits under different international schemes

Entrepreneur

Long Term

Visa

N/a

412 N/a

Long Term

Business Visa

N/a 491 N/a

US

US EB-592 N/a N/a

10,69

2 N/a 10,000

Main nationalities of applicants

Chile Chilean, American, Argentinian, Brazilian and Indian.

US Chinese, South Korean, Taiwanese, Vietnamese, Iranian, Russian, Indian, Mexican, Nigerian,

Japanese

New Zealand Chinese, South Korean, British and Japanese

Note: The data illustrate entry lodged and granted rate over the available years for each country scheme.

LG- Permits lodged; GR- Permits granted; N/A: not available

The table 6.2 above shows that there is substantial variation across countries in terms of

data on specific schemes. This is largely due to the adoption and implementation period of

the schemes as well as the availability of the information.

According to the data gathered, although not in the same year, the highest number of

applicants was found in Chile: 15,000 (2010-2013) and 2,488 (2015)93. In Australia, both

the number of visas lodged (144) and granted (57) under the Business Talent in 2014 was

much higher than during the period 2012-2013 (respectively 97 and 15).

When accounting for residence permits per 100,000 of the population (see also table below),

the highest number is recorded in Singapore 14 (2012) and 9.4 (2013) followed by New

Zealand 4.35 in 2015. The lowest number of start-up visas granted was in Australia and

Canada with 0.04. With regard to the nationality of applicants, the majority were Chinese

citizens (US and NZ). However, this tendency seems to be rather recent in the US,

considering that 10 years ago Chinese nationals only accounted for 13% of the EB 5 visas

issued.94 South Korean, Japanese and Indian nationals seem to be other top nationalities

lodging applications. In Chile, the most represented applicants under the Start-up scheme

are Chilean, American, Argentinian, Brazilian and Indian nationals.

As regards the gender of entrepreneurs, the information gathered in 2015 demonstrated

under the Chile Start-up scheme that 84% of entrepreneurs were men and 16% were

women.

92EB-5 is the visa applicable to Immigrant investors created by the Immigration Act of 1990. 93 Chile country fiche 94 CNN Money, “U.S. runs out of investor visas again as Chinese flood program” available at: http://money.cnn.com/2015/04/15/news/economy/china-us-visa-eb5-immigrant-investor/ (accessed 23 February 2016)

http://money.cnn.com/2015/04/15/news/economy/china-us-visa-eb5-immigrant-investor/


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7 Comparative success of the schemes

This section will provide an overview of the success of the schemes on a number of aspects,

including number of applications and permits granted; investment and jobs created and

attractiveness and branding. It concludes with some key points related to the success of the

schemes.

7.1 Number of applications and permits granted

Number of applications and permits granted can be one indicator of the success of the

scheme in terms of interest and take-up from applicants. However, there are certain

limitations of using number of applications/permits granted as a measure as there could be

other variables at play. Also, some permits are subject to quota (e.g. French Tech ticket and

Chile Start-up visa) and thus number of permits cannot be taken as a success measure.

Furthermore, some of these permits have been introduced very recently so it is still early to

evaluate their success until a relative degree of maturity and as they become more known to

potential applicants.

As it can be seen from Section 6, availability of data on the number of applications and

permits granted is patchy and in some cases it is not comparable due to different categories/

admission thresholds (see also Section 3). For the permits launched very recently (3 of the

residence permits in the EU were launched in 2015 or after) the number of permits issued

cannot yet be taken into account as a success measure.

The highest number of permits issued has by far been in the UK. However, as described

above the scope of the UK scheme is larger compared to the other schemes analysed. Since

2008 to 2014, 13,746 Tier 1 Entrepreneur and Tier 1 Graduate Entrepreneur visas have

been granted. The admission criteria – based on minimum capital and recently introduced

‘genuine entrepreneurship test’ are seen to have contributed to the number of visas granted.

The French Tech Ticket can also be considered successful. In terms of the application

numbers, the French Tech Ticket is highly selective and accepted only 3% of all applications.

Only a small number of entrepreneurs can be covered by this scheme. However, the

seemingly low acceptance rate is similar to the regular acceptance rate in private incubation

programmes and indicates indeed a thorough selection process. As the programme currently

accepts only 50 start-ups, one cannot argue a mass appeal, but rather explain the

programme in the context of good public relations for the French tech scene. In this context

the smaller scale and specialized scope of the scheme is obvious and was underlined by a

welcoming event the by the French President and the Minister for Economy at the Elysee

Palace in March 2016. The Minister of State for Digital Affairs explained in this context that

the goal is to continue with the programme and expand it to other French Tech Metropoles

throughout France. At the same time, the residence permit for competences and talentsfailed

to attract the numbers expected: roughly 300 annual applications were received when the

target was of 2000. This is in a strong contrast to the French Tech Ticket that attracted a

high number of applications in its pilot year 2015/16.

In comparison to France (where although the quota is set to 50 permits a lot of interest has

been generated) and the UK, a limited number of permits have been issued under the other

analysed EU schemes.

According to the experts consulted, many of the schemes have fallen short of the numbers of

entrepreneurs they are expected to attract. This is an indicator for the limited attractiveness

of these visas. As seen in Section 6 above (excluding France where fixed quotas apply),

when accounting for residence permits per 100,000 of the population, the relative amount of

issued visas remains similar with the highest number of start-up visas issued in the UK (with

8.5 in 2014 start-up visas granted per 100,000 of total population); followed by a distant 0.7

in Ireland and 0.5 in Denmark. The lowest numbers issued per 100,000 of the population is

recorded in Italy with 0.06.


81

Italy has experienced a low number of applications. Being introduced in 2014 and having

received only 61 applications up to December 2015, the scheme is too recent for a thorough

evaluation. However, the very low number of applications and the almost null percentage

that came through certified incubators (1 out of 61) indicates that the scheme falls short of its

objectives. The absolute number of applicants is low; even though the success rate is as

high as 66%. When compared to other EU start-up visa schemes, the Italian numbers do not

appear to be particularly daunting, yet the expectations in relation to its numbers were higher

and the scheme presents many characteristics that could lead to a successful scheme on

paper.

The number of extensions of the permit or switching to another permit can indicate if the

entrepreneur is staying in the country – the retention rate. However, this data is not readily

available for all countries. With regard to the UK, if approved, the applicant receives a three

year initial visa. At the extension stage the entrepreneur must demonstrate, among other

things, that s/he is employing at least two full-time equivalent workers. Almost three quarters

of those initially successful in being granted an entrepreneur visa do not go on to apply for

extension. Thus, retention rates have not been very high in the UK.95

With regard to the six international countries examined, of particular interest has been Chile

due to it’s the strong branding of the scheme and the numbers attracted. Despite Start-

Up Chile’s success, the scheme has faced a shortage of local venture capitalists and has

struggled to retain the program’s participants in Santiago96. Around 80% of Start-Up Chile

participants leave Santiago after the six month program and move on to the US97. In

addition, approximately 85% of the funding Start-Up Chile came from abroad, mainly from

the US98. Around, 300 new companies are accepted annually, but the large number are

facing the challenge that Chile has in fostering entrepreneurship and innovation99. Moreover,

some experts have questioned the long-term sustainability of the scheme. Compared to

other entrepreneurship initiatives in Chile, Start-Up Chile may appear to fall short in terms of

its benefits to the Chilean economy100. For instance, only 37% of Start-Up Chile participants

between 2010 and 2012 began activities in Chile). Chile has business-friendly regulations,

efficient immigration policies, and a relatively stable economy, but it lacks the entrepreneurial

spirit amongst its young people and Santiago is not a very international city101.

The success of the schemes in Australia and New Zealand – which are both points-based

systems geared towards established companies – can be seen as limited. The Canadian

start-up visa can also be seen with very limited success having attracted only 60

entrepreneurs while recent statistics were not available for Singapore. It is difficult to

establish any further findings without primary data collection.

Further exploration of statistics, including through comprehensive data collection from

relevant stakeholders will contribute to filling the knowledge gaps of the available

95

Migration Advisory Committee (September 2015) ‘Review of the Tier 1 Entrepreneur and Graduate

Entrepreneur routes https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf (Accessed on 1 April 2016) 96 Start-Up Chile Launches Follow-On Fund To Boost Local Growth, available at: http://techcrunch.com/2015/01/19/start-up-chile-launches-follow-on-fund-to-boost-local-growth/ (Accessed on 1 April 2016). 97 Start-Up Chile: A “start-up for start-ups” in Chilecon Valley, available at: http://www.brookings.edu/blogs/techtank/posts/2015/08/19-startup-chile-chilecon-valley (Accessed on 4 April 2016) 98 Ibid 99 Chile Keeps Nurturing Seeds for ‘Chilecon Valley’, available at: http://www.wsj.com/articles/chile-keeps-nurturing-seeds-for-chilecon-valley-1440371282 (Accessed on 1 April 2016). 100 http://www.wipo.int/wipo_magazine/en/2014/05/article_0006.html (Accessed on 6 April 2016). 101 Start-Up Chile: A “start-up for start-ups” in Chilecon Valley http://www.brookings.edu/blogs/techtank/posts/2015/08/19-startup-chile-chilecon-valley (Accessed on 1st April 2016).



http://techcrunch.com/2015/01/19/start-up-chile-launches-follow-on-fund-to-boost-local-growth/

http://www.brookings.edu/blogs/techtank/posts/2015/08/19-startup-chile-chilecon-valley

http://www.wsj.com/articles/chile-keeps-nurturing-seeds-for-chilecon-valley-1440371282


http://www.wipo.int/wipo_magazine/en/2014/05/article_0006.html



82

information. Qualitative interviews would enhance the understanding of the success of the

schemes.

7.2 Success of the scheme in terms of investment and jobs created

Statistics on the number of jobs created and investment generated is scarce due to the

difficulty in following up and accurately estimating the direct jobs/investment generated. Also

questions arise as to the indirect impact on jobs and investment, such as displacement and

substitution effects.

Table 7.1 below shows that statistics on jobs generated are available in three countries (ES,

UK, Canada). This number is the highest in the UK which has been ongoing for longer (also

when calculated on average per annum - 1,230), followed by Canada 1,100 (370 on average

per annum) and Spain 800 (400 jobs created on average per annum). It should be noted that

the data has been collected from different sources, which have aggregated it using different

methodologies and thus it is not comparable.

Statistics on investment generated are available in four countries (FR, IE, UK and Canada).

The investment generated has been by far the highest in the UK – also when accountings for

annual averages – i.e. in total £1.45 (€1.81) billion have been generated in the timespan on

8 years.

Table 7.1 Jobs created and investment generated under the schemes

Country/scheme Timeframe Jobs created Investment generated

France Since its launch in 2016 No information On average the

selected projects have

raised €250,000

Ireland 2013-2015 No information over €6 million

Spain 2013-2014 800 No information

UK 2008-2015 9,850 £1.45 billion

(€1.81billion)

Canada 2013-2015 1,100 CA$350 million (€308

million)

Further information on economic impact of the schemes for entrepreneurs is available for UK

and Chile. In the UK, the biggest 15 companies account for about two thirds of the turnover

generated. On average, one migrant supports six members of staff. In terms of sectors, the

business share of professional, scientific and technical activates, and information and

communication sectors are higher for Tier 1 Entrepreneurs than the UK average. These

sectors count for 36% of Tier 1 Entrepreneur activity. It is estimated that a quarter of start-

ups in Tech City, the leading company in London supporting digital technology business

across the UK, were founded by migrant entrepreneurs. In Chile, the Start-Up Chile scheme

has helped to drive a big increase in the number of Chilean firms applying to other seed-

capital funds run by the government, as well as a rise in the number of universities that teach

students about enterprise (The Catholic University of Chile, for instance has open an

innovation centre to enable academics and entrepreneurs to work side by side). Start-Up

Chile created incentives for Chilean newspapers to devote a specific space to entrepreneurs.

7.3 Attractiveness and branding of the schemes

The prospect of attracting talented migrant entrepreneurs is attractive to many governments around the world. This is evident by the number of countries which have introduced special schemes in place. However, having the scheme in place is only one part of the coin while efforts to brand the scheme and ensure the prerequisites its attractiveness is the other side of the coin.


83

Two of the schemes – namely those two with support schemes in place (France and Chile)

have been identified as having powerful brands. This has been done not only through the

funding these schemes provide but also through other support elements – e.g. fast-track

application processes. In addition, the three strands of the Chile Start-up visa, including a

special strand for female entrepreneurs has attracted attention and served to enhance the

brand. In France, the French Tech Ticket is widely advertised through the online platform as

well as through the Government Agency Créative France that aims at promoting France and

the scheme for innovative start-up. The success of the French Tech Ticket is a confirmation

for the French Government that France has ‘international appeal’. Start-Up Chile is also very

well-known and has become the radar of start-ups coming from all over the world, giving to

Santiago, its capital, the nickname ‘Chilecon Valley’.

In Spain, the scheme has been promoted through various channels, including through a

special web-site but also through actively involving national and regional agencies, employer

associations and universities. In contrast, other countries, such as Italy and Canada, which

have not carried out active promotion campaigns and branding efforts to attract

entrepreneurs have suffered lower application rates and general interest in their schemes. In

Italy, the main obstacle for active promotion is reported to be the lack of funding and

personnel.

7.4 Further considerations related to the success of the schemes

A number of further considerations related to the success of the examined schemes are

outlined in this subsection:

■ Measuring success: Further considerations highlighted at the experts’ workshop

include that that it is difficult to measure the success of the schemes. Several of the

schemes introduced are new and it takes some time to evaluate their impact.

Furthermore, limited information from official evaluations has been found which could

have been illuminating as to the schemes’ results and impacts102. In Denmark and the

Netherlands, the schemes are planned to be evaluated within the next 2 years. A

comprehensive evaluation has been undertaken in the UK by the Migration Advisory

Committee (MAC)103. With regard to the Tier 1 Entrepreneur scheme, MAC has opined

that the UK’s offer to migrant entrepreneurs is relatively competitive; however, there is

some concern that the criteria are not suitable for smaller innovative businesses and

there is some uncertainty around the application process which can act as a deterrent. A

much broader range of activity being undertaken by Tier 1 (Entrepreneur) migrants was

found, which suggested that a substantial proportion of these entrepreneurs are using

the route in ways contrary to what may have been intended when it was introduced. In

addition, businesses with low growth potential and low innovation rates have been a

large proportion of the businesses created through Tier 1. With regard to the Tier 1

Graduate Entrepreneur, MAC evaluated that the scheme works well due to the limited

numbers and attraction of ‘high quality’ graduate entrepreneurs. Recently also the

Business Innovation and Investment Programme in Australia has been reviewed by the

Australian Joint Standing Committee on Migration104. Results show that most businesses

were established in retail, service and manufacturing sectors and no evidence was found

that the programme is meeting the set objectives. The Committee issued a

recommendation to review the operation of the programme.

102 Although the scheme in Ireland has been evaluated, the results are not publicly available. 103 Migration Advisory Committee (September 2015) ‘Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf (Accessed on 1 April 2016) 104 Parliament of the Commonwealth of Australia (2015). Report of the Inquiry into the Business Innovation and Investment Programme. Joint Standing Committee on Migration, March 2015. Available at: http://www.aph.gov.au/~/media/02%20Parliamentary%20Business/24%20Committees/244%20Joint%20Committees/Migration/BIIP/Report/Final%20Report.pdf?la=en (Accessed on 3 June 2016)



http://www.aph.gov.au/~/media/02%20Parliamentary%20Business/24%20Committees/244%20Joint%20Committees/Migration/BIIP/Report/Final%20Report.pdf?la=en

http://www.aph.gov.au/~/media/02%20Parliamentary%20Business/24%20Committees/244%20Joint%20Committees/Migration/BIIP/Report/Final%20Report.pdf?la=en


84

■ Transparency of the schemes: Issues of transparency need to be highlighted. The way

the assessment for the schemes are conducted in the Member States are often not

transparent (decisions are made by a group of people in ministries without real

transparency on how the defined evaluation criteria is used. This could also reflect onto

the success of the schemes – i.e. if there are any implicit exclusion criteria or the

assessment threshold is set too high, the schemes will only admit a limited number of

applicants (as it seems to be the case in DK and NL). Further exploration through

stakeholder consultation is necessary to obtain a more nuanced picture.

■ Abuse of the system: Issues of abuse may be present whereby applicants attempt to

use the start-up visa as an immigration channel with no real intentions of setting up a

business. In the UK’s evaluation report by MAC, the types of abuse included ‘shell

businesses’ established only to meet the entre criteria, non-compliant and non-genuine

applications. In addition, businesses with low growth potential and low innovation rates

have been a large proportion of the businesses created through Tier 1.The history of a

high rate of abuse could be linked to the criteria based solely on certain amount of funds

and the fact that there is no particular scrutiny into the business nature and the business

plan. To address this issue, the UK has introduced more scrutiny on the types of

business and business plan, including the ‘genuine’ entrepreneurship test.

■ Status change: Data should be collected on third country nationals whose

entrepreneurs permit is not renewed to understand their subsequent movements – i.e.

whether they go back to their country of origin and whether they change their status.

■ Failure rates: Start-ups have a high failure rate that must be taken into account when

measuring their success. Picking successful entrepreneurs also has a high failure rate,

even among people who do this for a living.

■ Knowledge spill-overs and innovation vs. displacement effects: It could be argued

that migrant entrepreneurs displace native entrepreneurs due to the potential of limited

resources in terms of human capital and credit supply105. In addition the long-term

consequences should be considered: the possibility that new entrants might disrupt

industries, putting firms founded by nationals/EU nationals (and perhaps their workers)

out of business. However, another consideration is whether displacement effects can be

smaller if there is an element of innovation in the selection. A study undertaken in 2008

in the US shows that natives are not crowded out by immigrants, and that immigrants do

have positive spill-overs, resulting in an increase in patents per capita of about 15% in

response to a one percentage point increase in immigrant college graduates106. several

studies have also explored the possibilities of migrant networks on knowledge spill-overs

as migrant entrepreneurs may be able to use these supra-national connections to access

new ideas and technologies107 On the contrary, other studies 108 find evidence to suggest

that an increase in migrant entrepreneurship decreases the propensity of natives to

105 Migration Advisory Committee (September 2015) ‘Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf (Accessed on 1 April 2016)

106 Hunt, Jennifer; Gauthier-Loiselle, Marjolaine "How much does immigration boost innovation?", 2010

107 NIESR (2013). The Economic and Labour Market Impacts of Tier 1 entrepreneur and investor migrants. NIESR report to the Migration Advisory Commitee. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/257258/economic-research.pdf (Accessed on 3 June 2016). 108 OECD (2010). Entrepreneurship and Migrants. Report by the OECD Working Party on SMEs and Entrepreneurship. http://www.oecd.org/cfe/smes/45068866.pdf; Fairlie, R. & Meyer, B. (2000). The effect of immigration on native self-employment. NBER working paper 7561. Available at: https://escholarship.org/uc/item/7bq2h9rh.pdf (both accessed on 3 June 2016)



https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/257258/economic-research.pdf

http://www.oecd.org/cfe/smes/45068866.pdf

https://escholarship.org/uc/item/7bq2h9rh.pdf


85

engage in self-employment activities, thus suggesting that there may be some

“crowding-out” of native entrepreneurs. However in their analysis of the UK, the MAC

argues that the country as a whole might be expected to gain from any competitive

effects that the admission of more entrepreneurs might generate, provided that they do

not undermine economies of scale. Further evaluations on the displacement effects in

light of an introduction of a possible EU wide scheme need to be carried out.


86

8 Analysis of a potential EU-wide scheme

The analysis in the present section focuses on identifying advantages and disadvantages of

the existing national schemes which could be replicated into a potential EU start-up scheme.

As already explained in the previous sections of this report, the lack of data and other

evidence of the performance of the different schemes (such as available evaluation results)

represents an obstacle in the analysis of elements of these schemes that can be replicated

to a possible EU-wide scheme. This chapter presents a tentative analysis of a potential EU-

wide scheme and is based on four secondary data collection from available resources and

expert input from commissioned experts:

■ Literature review and mapping presented in the earlier sections of this report

■ Specific national review of the selected countries presented in country fiches of seven

EU and six non-EU countries (completed on the basis of secondary data collection)

■ Views of experts from the expert workshop carried out on the 7th March 2016

■ Follow up with individual experts and validation of country fiches from experts

It follows the structure of the previous sections and is divided into four main areas:

■ Scope of a potential EU-wide visa

■ Admission criteria

■ Application process

■ Rights to be granted under a potential scheme

An additional element to explore is whether the EU start-up scheme could substitute or run in

parallel to the existing national schemes and assess the added-value of mobility rights.

There is no conclusive evidence that the elements discussed in this analysis and identified

as possible ‘good practices’ at EU level would work at EU level as explained above. The

following identified elements are important to be considered in terms of an EU wide

implementation, however the practical implementation of these remains to be tested. For a

more complete and nuanced picture of how a potential EU-wide initiative could look like, a

comprehensive data collection should be carried out, including a stakeholder consultation.

Aspects to be explored and formulated with further analysis based on more comprehensive

primary data collection are:

■ Problems that the scheme would be aiming to address: As highlighted at the expert

workshop, any EU-wide scheme should respond to a clearly specified need, so it should

be better analysed which need(s) determine the objectives

■ The particular objectives an EU-wide visa may serve

■ The specific profile(s) of entrepreneurs from third-countries an EU-wide visa would aim

to attract

■ Assessment of potential impacts (including economic analysis) of the introduction of a

EU-wide visa

■ Contribution to the EU-added value and principles of competence – such as the

principles of subsidiarity and proportionality in the EU acquis

■ A comprehensive review of the EU policy background and initiatives in the area of

entrepreneurship, including in key policy documents (e.g. European Entrepreneurship

2020 Action Plan, EU Digital Agenda, European Small Business Portal, etc.)

■ A comprehensive analysis of all EU Member States’ entrepreneurship policies, including

any policies on attraction of entrepreneurs from third countries

■ Political feasibility: Many EU countries have restrictive immigration laws; it would need to

be seen how an EU-wide visa would fit into existing migration frameworks

■ Degree of flexibility to align with individual Member States’ economic policies and a more

comprehensive visa approach

■ Factoring the attractiveness of the business environment/entrepreneur


87

As per the Terms of Reference under ‘Study for an Impact Assessment of the EU Blue Card’,

these aspects fall beyond the scope of the current assignment109.

8.1 Scope of a potential EU-wide scheme

The scope of a potential EU-wide scheme refers to the categories of TCN it would aim to

address.

Lessons learned

As highlighted in Sections 1 and 2, there is no common definition of entrepreneur or start-

up. The examined schemes aim to attract ‘innovative’ entrepreneurs; however, as seen in

Section 3, the ‘innovativeness’ is an abstract concept defined (and also may be

understood) differently in different countries. The schemes are also more predicated on

certain admission criteria than on definitions. However, the lack of a clear definition of

entrepreneurs and the scope of the categories who are eligible to apply might lead to a

large number of poor quality applications (as was the case in the UK, which does not

necessarily target innovative entrepreneurs) or applications that do not contribute to a set

goal of the potential scheme.

A lesson learned from the recent evaluation of the UK scheme by the MAC is certainly to

define more precisely who an entrepreneur is and what the aim of the scheme is, i.e. what

the EU would want to gain by introducing a scheme.

Considerations of scope take account of which categories of TCN would be

included/excluded under the EU-wide visa, including whether it would be open to all self-

employed workers or whether it would be limited to particular ‘innovative’ start-

ups/entrepreneurs. Further, the question arises whether the ‘innovativeness’ would be

limited to certain sectors, as is the case in Denmark and Ireland. If so, the issue of defining

these to a comprehensive entrepreneurship visa across EU Member States remains.

Further considerations of potential categories consist of whether it would include graduates

of European universities, whether the scheme would be open to investors and whether

there would be any special incentives for minorities or particular profiles of entrepreneurs

(e.g. women entrepreneurs, disabled entrepreneurs, ethnic minorities, etc.).

The table below provides some considerations which could be further explored following a

more comprehensive study based on impact assessment/stakeholder consultation.

Table 8.1 Scope of EU-wide visa: considerations

Category Considerations

All self-employed workers

■ This could also include medium and low skilled self-employment

businesses;

■ Proof of subsistence is commonly required where self-

employment visas are in place;

■ Political sensitivity very likely from Member States whether this

potentially ‘very wide’ (meaning opened to a large number of

potential TCNs) migration channel could be opened.

‘Innovative’ start-ups ■ Issues around how ‘innovative’ could be defined

■ Should it be limited to certain sectors/industries? As highlighted in

Section 3.1.5, limiting to certain sectors have a number of

disadvantages, the main is that industries can be dynamic;

109 Under Task 2 in the Terms of Reference the contractor shall “ Map and assess the existing situation regarding

entrepreneurs (in particular innovative startups) in the national legislation of Member States with regards to entry and stay requirements and programmes of support measures to attract, facilitate and stimulate entrepreneurship.”


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Category Considerations

innovation in traditional industries (e.g. Uber taxis)

Graduates ■ Some schemes also successfully target graduates (e.g. IE, UK)

and this category could be included in a potential EU-wide

scheme.

■ Universities are increasingly establishing entrepreneurial hubs

and accelerator programmes (e.g. in DK, NL, UK)

■ Many successful entrepreneurs have started their business while

still in university, thus it could be potentially beneficial to allow for

foreign students to engage in start-ups110

Nationals/EU entrepreneurs

■ Support schemes/structures should ensure equal access for

nationals and EU entrepreneurs.

■ Considerations of displacement effects of national/EU population

Investors ■ Schemes when higher capital is required (e.g. UK, US) could de

facto target investors, instead of start-ups. Provisions of requiring

a lower capital (e.g. UK) when investors have been secured

■ Physical presence and full time engagement of the entrepreneur

in the business is required in some countries (e.g. DK)

Start-up vs. scale-up businesses

■ Start-up and scale-up businesses have two different business

models and the link between these two stages of the life of an

enterprise should be analysed, for instance with regard to entry

and renewing possibilities and the role of incubators

Minorities ■ Studies point out to benefits (economic and social) when

entrepreneurship by minorities (e.g. women, disabled persons,

ethnic minorities, etc.) is encouraged111

■ Example of Chile ‘S Factory Programme’ strand of Chile Start-up

visa for women entrepreneurs

■ Potential to develop a framework like Minority owned business

and consider diversity as a plus

■ Whether these categories could be tackled with special, smaller

scale programmes

Considering the different categories which could be included in an EU-wide scheme as

outlined in the table above, a EU-wide visa could predominantly focus on ‘innovative start-

ups’ with a potential to include graduate entrepreneurs in its scope. As explained in

section 4.5 above Directive 2016/801 (recast) enables (among others) graduates to stay on

the territory of the Member State after finishing the studies for a period of at least nine

months in order to look for work or set up a business (Article 25) and thus facilitates

entrepreneurial activities for graduates112.

With regard to all self-employed workers, this would include to a large extent low value/ low

growth businesses (as in the case of UK Tier 1 Entrepreneurs), which will not be particularly

beneficial for the knowledge/entrepreneurial economy in terms of innovativeness. In addition,

there are issues around potential abuse of a wider self-employment scheme. Thus, limiting

the scope to ‘innovative’ start-ups would make more sense for the EU economy (including

boosting the knowledge economy, technological hubs and clusters, etc.) and be prone to

greater political feasibility and acceptance of the Member States.

110 Goube, Josephine (2015), “Worldwide start-up visa policies compared”, Migreat. 111 E.g. Lee, Neil and Nathan, Max (2013) Cultural diversity, innovation and entrepreneurship: firm-level evidence from London. Economic Geography, 89 (4). pp. 367-394. ISSN 0013-0095 112 See also: European Commission Communication ‘Towards a reform of the common European asylum system and enhancing legal avenues to Europe’, COM(2016) 197 final


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A EU-wide scheme could include both start-up businesses (with no or little track record) and

scale-up businesses (with existing operations and track record) as long as these are defined

in terms of activities of the business, number of employees and revenue to prevent abuse of

this channel.

Special provisions/incentives for minorities may be optional to Member States (such as

more favourable provisions for particular minorities) to boost an inclusive economy. – i.e. as

per Europe 2020 Strategy one of the priorities is inclusive growth for particular categories,

especially vulnerable segments of the population and those likely to be at risk of exclusion.

In conclusion, having in mind a number of considerations outlined, the EU-wide visa would

be best focussed targeting innovative start-ups with the inclusion of graduates and

potentially, minorities.

8.2 Admission criteria for a potential EU-wide scheme

This section discusses a range of admission criteria of a potential EU-wide scheme and their

advantages and disadvantages based on the information collected from the 13 Country

Fiches and experts’ opinions (expert workshop carried out on 7th March 2016). It should be

noted that four of the EU schemes have been adopted very recently (France in 2016;

Denmark and the Netherlands in 2015 and Italy in 2014) and thus it is too early to assess

any results or impact in order to recommend that this be replicated in a potential EU-wide

scheme.

The table 8.2 below comprises considerations provided by the experts during the expert

workshop and in a separate consultation on a number of admission criteria of the existing

start-up visas.

Table 8.2 Admission criteria for a potential EU–wide scheme

Admission criteria Considerations in adopting this criterion

Setting up quotas ■ As with other EU level instruments in the field of labour

migration (e.g. EU Blue Card), Member States could be

able to set up quotas and limit the admission of migrant

entrepreneurs should it be deemed necessary to do so.

■

Relocating entrepreneurs to certain underdeveloped areas – geographical redistribution (e.g.US, Canada)

■ Difficult to manage at EU-level due to issues of

determining ‘disadvantaged’/economically

underdeveloped regions

■ Could be left optional to Member States

Sectoral approach ■ As highlighted in Section 3, a sectoral approach aims at

attracting only a narrow group of third country nationals

mainly in the ICT sector. Such an approach might ignore

other entrepreneurs from different sectors (such as

design). A possible EU wide scheme should therefore

consider the implications of an 'elitist' approach to

innovation and entrepreneurship and perhaps widen the

scope of candidates compared to the schemes currently

in place.

Business plan ■ Due to the fact that residence permits are in the national

competences (including their criteria for admission),

business plans could only be assessed at national level.

This would require common EU guidelines to ensure

consistency. Methodological issues of how the business

plan should be written and which points to include would

pose practical difficulties.


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■ One expert highlighted that business plans should

include a technical and a financial proposal

■ The assessment of candidacies by a technical

committee made up of practitioners and not only by

ministerial bureaucrats is also a sensible point.

■ Add the connection with endorsement bodies that can be

private (accelerators NL, IT) but also public (DK)

■ The recent MAC review of the UK scheme also

suggested the involvement of experts and third parties in

the evaluation of the business plan during the selection

process, making this a desirable condition for a possible

EU wide scheme.

Support schemes ■ Providing funding such as in FR and Chile seems to

work successfully

■ Given that residence and immigration are under national

jurisdiction, the MS may agree to provide funding.

However, as with the examples of FR and Chile, this is

likely to be at a very limited scale and thus result in

restrictive no. of people to come in

■ Feasibility to be assessed whether there is an EU-wide

funding instrument which could provide support to

entrepreneurs (e.g. ‘Erasmus-based’ instrument)

■ As a support scheme, a similar support as for Erasmus

scholars can be imagined however substantial support

should always be business driven and not come from

government.

Education/qualification levels/ background of entrepreneurs

■ Background (e.g. whether the applicants have

management experience, experience in particular fields,

experiences with businesses, etc.) and training of

applicants is considered important although (formal)

educational qualifications and diplomas are seen as less

important. The background of the entrepreneur can be

set out in the Business plan.

■ To find viable projects, there must be an evaluation of

the background and training of candidates in relation to

said project, and this assessment must score and impact

on the approval.

■ Entrepreneurial skills are hard to observe. In theory one

could go on past activity / experience, assets; business

plans; formal qualifications; attitude / character. These

are probably best used as threshold criteria. The first

three of these are probably more useful than the last

two.

Facilitator/endorses/incubators

■ As highlighted in the recent evaluation of the UK scheme

and in this report, several of the introduced schemes

(e.g. FR or NL) for start-ups have partnerships with

accelerators, angel investors or venture capital firms.

The involvement of endorsement bodies/private actors,

in general, was perceived as a positive factor.

■ These third parties are assessing the proposals and in

some cases choosing to invest their own funds in the

applicants they endorse. The reasoning behind this

appears to be to drive up the average quality of


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entrepreneurs admitted and to limit a large influx of bad

quality applications.

■ The incubator/accelerator might serve as the port of

entry. This facilitates compliance control by the

government and limits the risk of abuse.

■ The selection process could be carried out by incubators

and accelerators, the final decision could be left to the

government, which should be able to reject the

application only under specific circumstances

■ Third parties involved should be available in lists

approved by the EU governments, similarly to the

current approaches in Canada or the Netherlands.

■ Potential risk that corporate-backed incubators could buy

potential competitors before they are fully developed.

■ Strong relations between entrepreneurs and investors

may cause that due to a major funding the start-up has

to move to the same location (i.e. Member State) where

its investor(s) are based. This is common since investors

are also mentors/facilitators (e.g. NL) to the start-up. A

similar situation may be caused if the start-up is

accepted to an incubation or acceleration programme.

■ If the aim in the EU is to attract the top-potential

entrepreneurs, then the focus of the policy should be on

incubators/accelerators. However, it can result in

problems: If too much emphasis is placed on incubators,

the risk is that the number of applications from start-up

entrepreneurs is very low, as in fact it happens in Italy,

where only 1 out of 60 applications were made through

an incubator.

■ If a more relevant role is given to private actors, public

authorities are likely to insist on elements of control over

admission.

■ Difficult to achieve harmonization between countries –

different cultures of incubators and other elements of the

overall ecosystem.

Funding ■ Requirement for funds should be rather framed as third

party endorsement in contrast to imposing a minimum

investment threshold. The funds could thus be provided

by the endorser

■ Sources of funding might include:

accelerators/incubators, angel investors, venture capital

or crowdfunding (see also box below).

Having taken into account the considerations presented in the table above, the concept of

‘innovation’ is key as the scope of a potential EU-wide visa would best be suited in targeting

‘innovative start-ups’ and this should be defined in practical terms with some degree of

flexibility for Member States. However, if a EU-wide visa was to be based on a minimum

investment requirement (as in the case of the EU Blue Card), this would be more of an

investor type of visa and deter potential start-ups which would not have secured the required

capital yet.

Conditions may include working with an endorsement body/facilitator, including accelerators,

universities, technology hubs and clusters as in the case of the Netherlands and/or having

an investor (such as venture capital firms) as in the case of Italy and the UK (in Italy it is


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optional but preferable to have an investor on board, while in the UK the requirement for

funds is significantly reduced from £200,000 to £50,000 if an investor is on board).

Limiting the visa to particular industries as in the case of Denmark and Ireland could be

another option. However, limiting to certain sectors has a number of disadvantages, the main

is that industries can be dynamic or innovation can occur in traditional industries not

regarded as innovative in combination with an innovative technology (e.g. taxi transportation

transformed by Uber taxis through innovative mobile phone systems). Expert proposals

include circumventing this in terms of limiting the businesses to particular technologies (e.g.

bio technology, information technology etc.) but this should be further explored for any

potential limitations. Furthermore, sectors and industries differ significantly by countries and

spelling out certain sectors might limit some EU countries in terms of their industries (e.g.

fashion in Italy, food production in some countries, etc.).

Whether the entrepreneurs would have the equal access to already existing support

schemes in place for EU nationals and whether EU nationals will have equal access to any

support schemes the visa may offer are crucial considerations for a possible EU-wide

scheme. There are already support and funding opportunities available for young and

aspiring entrepreneurs across the EU. These could be utilized by innovative entrepreneurs

when applying for a possible EU wide visa and support scheme as seen in the box below.


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EU wide support scheme for entrepreneurs – possible elements

■ Cooperation with already existing networks through ‘Startup Europe’

As for the access to networks, the EU is already making efforts in connecting the various

existing networks and ecosystems. Startup Europe113 aims to connect the different

ecosystems in Europe. For example ‘connectors’114 have been established across Europe

connecting small scale ecosystems. For migrant entrepreneurs access to these larger

ecosystems might be crucial to be able to scale up their business. In such a context, a

pan-European start up visa could serve as an enabler for these start-ups to access the

European-wide ecosystems without the need for several national visas.

■ Cooperation with research centres/universities

As emphasised earlier in this report, the EU could attract innovative entrepreneurs from

third countries who are already residing in Europe as students or researchers. Hence, a

cooperation with research centres and universities is advisable. Good examples for the

development of such cooperation are:

EIT ICT Labs115 who aim to develop entrepreneurial ICT top talent in higher

education through promoting innovation and entrepreneurial spirit. The Labs have

mobility programs that bring people from different countries, disciplines and

organisations together.

Erasmus for Young Entrepreneurs116, which is a cross-border exchange

programme connecting young with experienced entrepreneurs running small

businesses in European countries.

A welcome desk for (aspiring) entrepreneurs

As seen from this report there are several schemes available in Europe. Any EU-wide

scheme could utilize the existing schemes and leave freedom to Member States how to

best adapt the pan-European scheme to their needs. Hence, an online ‘welcome

desk/platform’ at EU level explaining the possibilities in different countries could be a

possible element. The platform would give information about different

accelerator/incubator programmes, connections to national authorities and investors. It

could be connected with Startup Europe to utilize the existing synergies.

■ Events across Europe for aspiring entrepreneurs

To better connect young entrepreneurs, events across Europe are organised. An example

is ‘Tech All Stars117’ that invites 12 of the best young European start-ups to the most

prestigious start-up events across Europe and connects them to successful entrepreneurs,

influential individuals and top EU funding sources. Such events could be a possible source

for contacts and funding for migrant entrepreneurs that enter Europe under a possible EU-

wide visa.

113 http://ec.europa.eu/digital-agenda/startupeurope (Accessed 1 June 2016) 114 http://startupeuropeclub.eu/connectors/ (Accessed on 1 June 2016) 115 http://www.eitdigital.eu/for-entrepreneurs/ (Accessed on 1 June 2016) 116 European Commission, DG Growth (2016). Erasmus for Young Entrepreneurs. http://ec.europa.eu/growth/smes/promoting-entrepreneurship/support/erasmus-young-entrepreneurs/index_en.htm (accessed 10 May 2016) 117 http://techallstars.eu/ (Accessed on 1 June 2016)

http://ec.europa.eu/digital-agenda/startupeurope

http://startupeuropeclub.eu/connectors/

http://www.eitdigital.eu/for-entrepreneurs/

http://ec.europa.eu/growth/smes/promoting-entrepreneurship/support/erasmus-young-entrepreneurs/index_en.htm


http://techallstars.eu/


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■ Support in accessing the (Digital) Single Market

The access to a single market118 of 500 million customers is a strong benefit for

companies to operate in the EU. There are several initiatives at EU level aiming to support

companies in operating across the European Market, including the introduction of a ‘digital

single market119’. The Digital Single Market strategy120, adopted in 2015, aims at making it

easier for innovative entrepreneurs to start their own company. Further, information about

the single market should be more accessible through high quality online public services.

This could reduce the administrative burden for entrepreneurs operating across Europe.

■ Funding

Transparent information about the possibilities in accessing funding through accelerators,

incubators, venture capitalists, business angels etc. in Europe is necessary to support

entrepreneurs in navigating the system and scale up their company faster. The EU is

putting strong emphasis on venture capital for start-ups as this type of capital enables

particularly young firms to grow. The Capital Markets Union Action Plan has therefore a

proposal for a European venture capital funds-of-funds121 making more private capital

accessible for start-ups in Europe.

8.3 Application process for a potential EU-wide scheme

In terms of the admission process, several points might be worth considering for a potential

EU start-up scheme. Issues such as the length of the procedures, the general red-tap, the

duration of the permit (short vs. long-term permits) and inclusion of private bodies into the

decision-making process certainly influence the attractiveness and potential success of a

scheme. However, they are only part of the overall process and must be considered jointly

with even more pressing issues such as available ecosystems and possibilities for

funding as shown in Section 8.2 above.

As already emphasised, generally a shorter processing time, and an overall reduction of

red tape is positive for the applicants. This is however, only one of the factors that

contribute to the attractiveness and ultimately the success of a scheme. It can be described

as beneficial for the applicants that might be favourable for a country, if other features (such

as a present ecosystem and easy access to funding) are easily available (see also sections

2 and 4). This is the logic behind programmes such as StartUp Chile and the French Tech

Ticket, which are less visa programmes than tech accelerator schemes aimed at nascent (or

established, in the French case) out-of-country entrepreneurs. The success of these

schemes proves the point that existing business support weighs more compared to

easing entry criteria.

Overall, a mixture of the criteria is what attracts entrepreneurs, including funding

opportunities and a supportive ecosystem. A good example in this regard is certainly Start-

up Denmark. Although the scheme has not attracted nearly as many applicants as France

(140 in DK vs. 722), the Danish ecosystem provides several benefits for innovative

entrepreneurs. Further, Denmark has clear criteria for defining an innovative start-up (see

explanation in section 8.1.1 above), and a relatively short and straight forward application

process. Another important point worth mentioning here is that Denmark (compared to

France) does not offer a direct financial contribution to the entrepreneurs, or a direct link to

118 http://ec.europa.eu/growth/single-market/index_en.htm (Accessed on 3 June 2016) 119 https://ec.europa.eu/digital-single-market/en/startup-europe (Accessed on 3 June 2016) 120 https://ec.europa.eu/digital-single-market/en/news/digital-single-market-strategy-europe-com2015-192-final (Accessed on 3 June 2016) 121 https://ec.europa.eu/programmes/horizon2020/en/news/assessing-potential-eu-investment-venture-capital-and-other-risk-capital-fund-funds (Accessed on 1 June 2016).

http://ec.europa.eu/growth/single-market/index_en.htm

https://ec.europa.eu/digital-single-market/en/startup-europe

https://ec.europa.eu/digital-single-market/en/news/digital-single-market-strategy-europe-com2015-192-final

https://ec.europa.eu/programmes/horizon2020/en/news/assessing-potential-eu-investment-venture-capital-and-other-risk-capital-fund-funds

https://ec.europa.eu/programmes/horizon2020/en/news/assessing-potential-eu-investment-venture-capital-and-other-risk-capital-fund-funds


95

an ecosystem. However, in practice an expert panel consisting of incubators and other

experts evaluates the submissions. Depending on the set-up of an EU wide scheme, offering

a support scheme in cooperation with ecosystems in Europe might be more feasible then

offering a financial contribution, as is the case in France and Chile. The main conclusions

derived from the Danish scheme for a possible future scheme at EU level are:

■ The residence and work permit under this Start-up scheme is granted for a

maximum of two years with the possibility of extension for three years, which gives

the business enough time to scale up including applying for funding, and also employing

a certain number of staff. Also after 5 years in the country, the entrepreneurs have the

possibility to apply for permanent residency. However, as already pointed out, it is

questionable to what extent the perspective of long-term residence contributes to the

attractiveness of a country for ‘innovative’ entrepreneurs, as the main factors influencing

the decision are most likely support-related (in terms of connections to ecosystems and

access to capital).

■ Denmark is considered an attractive country by start-up foreigners due to its

minimal bureaucracy, high education and social security system. The submission

procedure is fast track and the application is made online. The processing time is around

2.5 months, which is a reasonable time considering the 2 step process of the application

(see section 4 for a detailed overview). This feeds into the argument that a combination

of positive factors contributes to the attractiveness of a given scheme.

■ Start-ups submit their business plan to a panel of experts, which will assess the

potential of the idea. If the business idea is approved, the entrepreneur may apply for a

residence and work permit. This contributes to quality assurance, because the

applications are not only assessed by government authorities, but also by experts from

the field.

■ Since January 2015, international students who have completed a Danish master

or PhD program can be granted a special permit to remain in Denmark with rights

to full-time employment. Similarly Ireland has envisaged a better cooperation with

universities after the first revision of STEP. This is a major point to be considered in light

of an EU wide scheme, also taking into consideration that a large number of students

from third countries is present in the EU. These are potential entrepreneurs that should

be part of any envisaged scheme, as emphasised by experts during the workshop on 7

March 2016 in Brussels.

8.4 Rights for a potential EU-wide scheme

In terms of rights granted under the scheme, several rights might play a role in the success

of the scheme.

Certainly family reunification rights are important for the entrepreneurs. As explained

above in section 5.2 family reunification is possible across the EU (except in Denmark,

Ireland and the UK) as set out in Directive 2003/86/EC. However, considering that most

countries (e.g. DK, FR, IE, UK) try to attract young innovative entrepreneurs from the ICT

sector (including recent graduates), the chances that these TCNs have already a family are

slim. Nevertheless, all schemes offer family reunification rights in some form (except for the

French Tech ticket where information about family reunification was not available). Hence a

comparison of which scheme is more successful based on these rights is not possible.

A pathway to permanent residence is probably more important in terms of attractiveness.

Generally permanent residence in the EU is regulated by the Directive 2003/109/EC as

explained above in section 5.3. Comparing EU wide schemes, only the UK offers the

possibility of a facilitated permanent residence after 2 years in the country (the UK

does not transpose Directive 2003/109/EC). The other schemes offer no facilitated

permanent residence compared to Directive 2003/109/EC. The UK has certainly attracted

many entrepreneurs (see also section 7.1), but the number attracted through the tier 1


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entrepreneur route is still smaller compared to e.g. France, which has no facilitated access to

permanent residence in place. Hence, also this right alone does not contribute to a higher

attractiveness or success of a scheme. It is once more important to emphasise that the

attractiveness and success of a potential EU wide scheme will depend on a mixture of the

admission criteria, the reduction of red tape and the rights granted. Most importantly, it will

depend on access to ecosystems and to financial support, either through a direct support (as

is the case in France or Chile) or indirect support through networks of ecosystems (as is the

case in Denmark or the Netherlands).

The right of intra-EU mobility is a strong argument for introducing an EU-wide scheme. This

could create a strong brand and international appeal due to its EU-wide nature. The real

benefit for the start-up is the EU common market – if they can scale up their product and

services EU-wide. Through intra-EU mobility, entrepreneurs could benefit from an easier

access to existing EU wide networks and clusters. In general entrepreneurs are attracted by

clusters, especially at the early stages when the entrepreneurs try to get the attention of

investors, while at the same they technically develop their product further. At EU level a

process of connecting different clusters is ongoing. This is the main aim of the Start-up

Europe122 initiative, which created already a connection between different ecosystems in

different European cities (e.g. Berlin and Madrid) to support start-ups to set-up their business

in one of the cities. In case of intra-EU mobility, migrant entrepreneurs could help

entrepreneurs to expand their networks, enhance cooperation between entrepreneurs in

different European regions and subsequently gain easier access to clients and capital. The

intra-EU mobility could build up on the existing Start-up Europe system. However, it could

further capitalise from the experience gained through the 'Erasmus for Young Entrepreneurs'

scheme described in the blue box in section 8.2 above. Currently the scheme is focused on

young entrepreneurs from EU countries (and on entrepreneurs from certain countries outside

the EU123), but could be expanded to entrepreneurs from third countries to enable these

entrepreneurs to gain experience in different EU contexts.

The notion of intra-EU mobility is connected with the necessity for entrepreneurs to access a

wider support scheme, as described in section 8.2 above. The added value of this mobility

for the entrepreneurs needs to be further assessed, i.e. whether this would enable

entrepreneurs to set-up branches / subsidiaries easier in other EU Member States, whether

they could gain easier access to existing networks and clusters as described above and after

which period it would be possible for the entrepreneurs to benefit from the mobility.

In more practical terms, the question would need to be answered after which period of stay

in the first Member State it should be possible for the entrepreneur to be mobile within the

EU. Another consideration is that there could be evidence of existing competition for

entrepreneurs among EU countries and these countries may not show real commitment to

the EU-wide scheme – as per the EU Blue Card experience where the Directive has been

transposed but few tangible efforts to promote the scheme have been made by Member

States. Furthermore, according to one expert, migrant entrepreneurs are likely to gravitate

where funding is provided/where the accelerator programmes are and thus, migrate to a

particular EU country without the intention to migrate to another country.

Further, intra-EU mobility could be ‘misused, e.g. the entrepreneurs could apply for a permit

in one EU country, where the administrative burden is lower and further on establish

themselves in another EU country that might be more attractive for them, but where at the

beginning it might be more difficult to enter. Still, it remains to be identified whether the

122 European Commission (2016). Startup Europe. http://ec.europa.eu/digital-agenda/startupeurope (accessed 10 May 2015) 123 Liechtenstein, Norway, the Former Yugoslav Republic of Macedonia, Iceland, Montenegro, Turkey, Albania,

Serbia and Israel; http://ec.europa.eu/growth/smes/promoting-entrepreneurship/support/erasmus-young-entrepreneurs/index_en.htm

http://ec.europa.eu/digital-agenda/startupeurope




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entrepreneurs are likely to move their business across the EU, or would they rather stay

connected to an ecosystem that suits their needs. It would be certainly positive for the

entrepreneurs, if they were allowed to make experiences in other Member States, to stay

close to potential business angels and mentors. In this regard it is necessary to further

research, whether access to different support from ecosystems across Europe (e.g. financial

support in France and support to scale up in Denmark) would require the entrepreneurs to

move their company across Europe, or whether the possibility of short term movement is

sufficient.

8.5 Summary: considerations in adopting a possible EU-wide scheme for innovative entrepreneurs

In sum, this mapping addressed the conditions currently in place for attracting innovative

entrepreneurs to Europe and internationally, and discussed advantages and disadvantages

of the existing national schemes which could be replicated into a potential EU

entrepreneurial scheme.

Generally, innovation and entrepreneurship are ‘hot topics’ in the current debate about highly

qualified migration at EU and Member States level. In order to stay competitive at the global

markets, the EU certainly aims to attract and support innovative migrant entrepreneurs124.

There are several reasons arguing in favour of introducing an EU wide scheme, but also

obstacles in the introduction, as summarized below:

■ The EU is aiming to catch up with international developments in the start-up field and

aims as part of the Single Market Strategy to improve the environment for start-ups in

Europe. A public consultation has been launched in this regard and the results will feed

into the further development of the EU single market for start-ups125. The introduction of

an EU wide scheme to attract innovative migrant entrepreneurs would fit into the EU's

aim to further develop the European Single Market and the EU’s economy into a

‘knowledge economy’. The EU has put forward several goals in the development of the

future Single Market, including increasing the use of e-commerce; focus on data and

digital products; ICT pervasiveness in business; remedy location issues and enhance

knowledge flows. An EU wide start-up visa could form a crucial part of this strategy126.

Through the Entrepreneurship 2020 Action Plan127 the European Union aims to foster

entrepreneurship by removing obstacles and improving the entrepreneurial culture

across Europe, which could enhance Europe’s attractiveness as a market for innovative

entrepreneurs from abroad.

■ A priority for the current Dutch EU Presidency is innovation. Innovation can strengthen

the knowledge economy of the EU’s internal market. In addition to the innovative

potential of Europe’s inhabitants, encouraging start-ups including those from third

countries is a key element highlighted.128 The Special Envoy of the Start-up Delta Neelie

Kroes highlighted that the Startup Delta is an “essential cluster within the greater

European ecosystem” offering “a great business climate for European and non-European

124 European Commission (2016). Towards a reform of the common European asylum system and enhancing legal avenues to Europe. COM (2016)/197. 125 For further information see: http://ec.europa.eu/growth/tools-databases/newsroom/cf/itemdetail.cfm?item_id=8723&lang=en&title=Public-consultation-under-the-Start-up-Initiative (Accessed on 2 June 2016). 126 For more information see: http://ec.europa.eu/growth/single-market/index_en.htm (Accessed on 2 June 2016) 127 For more information see: http://ec.europa.eu/growth/smes/promoting-entrepreneurship/action-plan/index_en.htm (Accessed on 2 June 2016). 128 http://english.eu2016.nl/latest/news/2016/04/12/constantijn-van-oranje-%E2%80%98let-innovative-startups-in-europe-find-their-own-way%E2%80%99

http://ec.europa.eu/growth/tools-databases/newsroom/cf/itemdetail.cfm?item_id=8723&lang=en&title=Public-consultation-under-the-Start-up-Initiative



http://ec.europa.eu/growth/single-market/index_en.htm

http://ec.europa.eu/growth/smes/promoting-entrepreneurship/action-plan/index_en.htm

http://ec.europa.eu/growth/smes/promoting-entrepreneurship/action-plan/index_en.htm

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investors and startups, here on the ‘West Coast of Europe’.”129 The initiative of Startup

Fest Europe130 has been initiated by Start-up Delta and will take place in November in

Amsterdam. It will feature more than 30 events spread over 16 locations, showcasing

sectors in which the Netherlands excels: water, cleantech, agri-food, energy, medtech

and e-health. We’ll also connect that to what’s happening in the rest of Europe. In this

context, the initiatives of the Dutch Presidency may act as a springboard for the potential

EU-wide visa and its visibility to all Member States.

■ Further, the EU could benefit from the current lack of a start-up visa in the US. As the

US country fiche shows, the current system in the US is highly bureaucratised and

certainly an EU start-up visa could attract entrepreneurs that might find it challenging to

get a visa to start their business in the US.131

■ Attracting more entrepreneurs to the EU could strengthen the EU’s role as an

‘innovation region’, giving more exposure to innovation hubs that might not be on the

radar of entrepreneurs as of now. Synergies between existing schemes at regional /

country level could be created and the local entrepreneur scenes could be fostered as

well as existing networks strengthened. EU wide access to mentoring and other support

that is already existing in different regions / countries could significantly boost Europe’s

attractiveness for innovative entrepreneurs132.

■ Strengthening the cooperation with other regions might enable the EU to better

connect with innovative entrepreneurs from abroad. In October 2016 the first meeting of

EU and Indian Start-ups will take place as part of the ‘Start-up-EU-India-Summit’133

bringing together the European and Indian Start-up ecosystems, including start-ups,

investors, and Policy Makers and exploring growth and investment opportunities and

insights about the European and Indian digital markets.

■ Besides the already described schemes in the seven Member States, other Member

States such as Lithuania, Slovakia and Portugal aim to introduce similar schemes134. To

facilitate immigration procedures to establish a business in Lithuania, an inter-

institutional agreement was signed providing for consultations on a one-stop-shop basis

and assistance to the person in completing all the necessary immigration formalities135.

Lithuania plans to introduce a temporary residence permit for innovative business (start-

ups). The characteristics of this permit would be a quick examination procedure, access

to family reunification and the possibility of renewal for a period of 1 year. Portugal

announced a national public strategy to foster entrepreneurship in March 2016 aiming

inter alia to “attract the best investors from all over the world”136. In Slovakia, a Concept

of Supporting Startups and Startup Ecosystem in the Slovak Republic137 was published

in June 2015 and was envisaged to be fully implemented by the Ministry of Economy by

the end of March 2016138. The Concept envisages the introduction of a Startup visa for

third-country nationals enabling persons with innovative ideas from outside the EU to

129 http://www.computerweekly.com/feature/Netherlands-takes-steps-to-become-startup-friendly-West-Coast-of-Europe (Accessed on 2 June 2016) 130 https://www.startupfesteurope.com/site/ 131 http://tech.eu/features/6500/european-startup-visa/ 132 ibid 133 For more information see: http://startupeuindiasummit.com/ (Accessed on 2 June 2016). 134 Presidency discussion paper for the lunch debate during the Informal meeting of Ministers responsible for research and innovation 27 January 2016, Amsterdam: “Access to talent: a European visa/permit for start-up founders” 135 Information provided in the EMN National Annual Policy Report 2015 136 http://startupportugal.com/about-index 137 http://www.rokovania.sk/File.aspx/ViewDocumentHtml/Mater-Dokum-189244?prefixFile=m_ 138 Information provided by the MoE SR.

http://www.computerweekly.com/feature/Netherlands-takes-steps-to-become-startup-friendly-West-Coast-of-Europe

http://www.computerweekly.com/feature/Netherlands-takes-steps-to-become-startup-friendly-West-Coast-of-Europe

https://www.startupfesteurope.com/site/

http://tech.eu/features/6500/european-startup-visa/

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stay in the Slovak territory during one year on the basis of a national visa139. Applicants

of start-up projects will be able to use all existing services for the implementation of their

projects under the condition of establishing a company in Slovakia.

■ In light of the initiatives at Member States’ level, the momentum for introducing an EU-

wide scheme is certainly right. However, drawing also on the EU Blue Card evaluation,

one point for consideration is that these Member States have already their national

schemes in place with a possible EU-wide scheme potentially running in parallel to the

national schemes. The overall attitude of EU Member States is comparable to the results

identified in the research conducted concerning the EU Blue Card, and a number of

Member State representatives stress the need to keep sovereignty regarding the way

entrepreneur visas are introduced and regulated. This could lead to similar issues as

already encountered with the Blue Card (i.e. watering down of EU wide rules) and would

certainly need to be taken into consideration if the EU aims to move forward with a pan-

European scheme for entrepreneurs. It should be considered how the EU-wide scheme

could add value to these Member States and not only having a similar/replicated

scheme, which would run in competition to the national schemes.

■ Other obstacles for an EU-wide scheme such as a possible abuse of the system as well

as differences in the varying attractiveness of EU countries have been addressed in the

earlier sections in this report.

Once again, it is noteworthy that the admission criteria discussed in this analysis can only be

a part of a wider support effort at EU level in the area of innovative entrepreneurship,

including not only a visa as an entry ticket but also support in terms of access to

ecosystems to enable the entrepreneurs to scale up their business in the EU.

Certainly, an EU wide scheme could build on the discussed schemes in the EU Member

States and create synergies between existing schemes. However, as emphasised in Section

8.2 above the exact composition of such a scheme, including harmonised admission criteria

at EU level as well as the introduction of an EU wide support scheme requires further

analysis.

Figure 8.1 below provides a summary of the main elements of a possible ‘European Union

Entrepreneur Scheme’ that were discussed in this report.

139 A third-country national may enter Slovakia on the basis of a national visa which must be requested at the diplomatic mission abroad. The applicant for national visa is required to submit together with the application and required documents a statement issued by the respective committee (selection committee) composed of the representatives of state administration? (in particular the MoF SR, MoE SR and MoESRS SR) and the private sector confirming that the project was approved by the committee as part of the startup programme. The applicant is also required to present a bank account balance statement with a minimum of EUR 8,000 for the purposes of operating in Slovakia. In the case of a favourable opinion of the MoI SR, the applicant is issued a national visa in Slovakia´s interest for a period of 12 months. The diplomatic mission must decide on the application within ten days. The national visa is issued in Slovakia´s interest. If the third-country entrepreneur plans to stay in Slovakia for more than 12 months, s/he is required to apply for temporary residence for the purpose of business by the last day of the visa validity at the latest.


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Figure 8.1 Elements of a possible EU-wide scheme for attracting and retaining innovative entrepreneurs from third countries

In sum the underlying policy aims of the Member States to facilitate entrepreneurship and

attract foreign entrepreneurs as described in Section 2 hold true for the EU as a whole.

The aim of a pan-European start-up visa including a support scheme would be to contribute

to economic growth across the EU by enabling businesses to expand in different EU

countries; contribute to international competitiveness by creating a strong single market for

international entrepreneurs; and boost innovative industries across the EU.

This might be best achieved with a scheme enabling entrepreneurs to work in the single

European Market and as Andrus Ansip, Vice President for the Digital Single Market140

pointed out:

“Innovative businesses must be helped to grow across the European Union, not

remain locked into their home market.

This will be an uphill struggle all the way, but we need an ambitious start.”

The development of an EU-wide scheme for attracting and supporting innovative

entrepreneurs might be this ambitious start!

140 http://europa.eu/rapid/press-release_IP-15-4653_en.htm (Accessed on 3 June 2016)

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Annex 1 Country Fiche: Denmark

Key Messages:

The Start-up Denmark scheme for innovative entrepreneurs from third countries was

introduced on 1 January 2015.

The aim is to attract talented entrepreneurs and high-impact start-ups to Denmark.

The term ‘innovative’ is not particularly defined, although the aim is to attract businesses that

are ideally tech-driven.

Restaurants, retail shops, consultancy firms, import or export enterprises or similar are

excluded.

The application process is conduced online through a dedicated web portal.

The permit is granted for two years and is renewable. No investment capital is necessary.

The government does not directly provide a support scheme with the residence permit under

the Start-up Denmark scheme. However, the start-up landscape in Denmark is favourable for

entrepreneurs.

A second route for entrepreneurs is the Establishment Card for graduates from Danish

universities, which has no sector restrictions.

It is valid for two years, but not renewable. The entrepreneur has the possibility to apply for

the Start-up Denmark scheme.

The success of the schemes is yet to be evaluated.


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Introduction and overview of the scheme

Denmark introduced the scheme ‘Start-up Denmark’ on 1 January 2015 for entrepreneurs with an

innovative business idea to “grow high-impact start-ups in Denmark”141. The Start-up Denmark

scheme replaces the previous ‘Residence and work permit for the purpose of self-employment and to

operate an independent company’142.

Denmark is one of the most active countries in the European Union (EU) in attracting highly skilled

third country nationals (TCN), with the aim not only to fill gaps in the labour market, but also to develop

the country’s competitiveness143. Denmark ranks third on the World Bank ‘ease of doing business

index’ (out of 189 economies), after Singapore and New Zealand144. The ease of doing business is

measured through indicators such as ease of starting a business, registering a property, getting credit,

protecting minority investors or trading across borders145. In 2015 Denmark introduced an online

platform for entrepreneurs enabling them to simultaneously complete a business and tax registration.

Entrepreneurs that want to start a business can complete their application in four days146. The

framework conditions for entrepreneurship in Denmark are ranked 10th among the OECD countries

and the public system is considered as one of the least bureaucratic worldwide147.

The Start-up Denmark scheme was introduced by the Danish Government in a joint initiative of the

Danish Ministry of Business and Growth and the Ministry of Employment. The Danish Business

Authority was largely responsible for the development and implementation of the scheme.

Entrepreneurs to be attracted by the Start-up Denmark scheme are start-ups with an innovative

business idea, which can contribute to growth and new employment in Denmark. The business

environment in Denmark is described as progressive and open with a large number of creative

entrepreneurs. Further, several hubs in the creative industry and Information and Communication

Technologies (ICT) are present148. The geographical location is favourable and Denmark is connected

with other Scandinavian countries in the field of technology start-ups. The authorities praise the

flexible working culture and the high standards of living in Denmark as favourable for innovative

entrepreneurs149.

Before the introduction of Start-up Denmark, TCNs who wanted to enter Denmark for the purposes of

establishing a business, applied for a residence and work permit for the purpose of self-employment

and to operate an independent company150. However, this permit was converted into the self-

employment permit within the Start-up Denmark scheme. Besides the Start-up Denmark scheme,

TCNs that want to establish a business in Denmark can do this, if they are eligible for the

‘Establishment Card’151, which was introduced simultaneously with the Start-up Denmark scheme on 1

January 2015.

141 Start-up Denmark(2016), “About - What is Start-up Denmark?”, http://www.startupdenmark.info/ (accessed 15 February 2016) 142 For more information see: Desiderio, M.V. and Mestres-Domènech, J. (2011), “Migrant Entrepreneurship in OECD Countries”, p. 182 143 CARIM-India (2013), “An overview of highly skilled labour migration in Denmark with a focus on Indian nationals”, Short Research Report Highly-Skilled Migration Series CARIM-India RR2013/43 144 The World Bank (2016a), “Economy Rankings” http://www.doingbusiness.org/rankings (accessed 15 February 2016) 145 The World Bank (2016b), “Doing Business 2016, Economy Profile Denmark 2016”, The World Bank 146 ibid 147 https://danishbusinessauthority.dk/role-authority, accessed 16 February 2016 148 See also section 2.1.2 in this report 149 http://www.startupdenmark.info/why-denmark/ (accessed 16 February 2016) 150 https://www.nyidanmark.dk/en-us/coming_to_dk/work/self_employement.htm (accessed 16 February 2016) 151 https://www.nyidanmark.dk/en-us/coming_to_dk/work/Establishment-card/Establishment-card.htm (accessed 16 February 2016)

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Design of the scheme

The specific requirements for the Start-up Denmark scheme as well as the Establishment Card are

described in detail in the following sections.

Admission criteria

Requirements to obtain the residence permit

Start-up Denmark

Entrepreneurs from third countries may apply for the Start-up Denmark scheme, if they have an

‘innovative’ business idea that can contribute to growth and new employment in Denmark. The terms

innovative and start-up are not particularly defined, although the aim is to attract businesses that are

“scalable and, ideally tech-driven start-ups”152 mainly in the fields of life science, ICT, design and

clean-tech & sustainable energy. Businesses such as restaurants, retail shops, consultancy firms,

import or export enterprises or similar are not eligible for the permit153. The evaluation criteria are

outlined in table 2.1 providing more detail on the expectations for start-ups.

Through the scheme an entrepreneur is granted a residence and work permit simultaneously. Also,

two entrepreneurs who want to establish a company together, may apply jointly for a permit154.

Before a TCN can submit the application for the residence and work permit, the business idea must be

approved by an expert panel appointed by the Danish Business Authority. The experts are selected by

the Danish Ministry of Business and Growth. They are start-up and business experts who are

voluntarily on the selection panel for Start-up Denmark155.

The entrepreneurs apply online through the ‘YouNoodle’ platform156. The business idea is evaluated in

terms of the following criteria157:

Table A1.1 Evaluation criteria

Criteria Description

Innovative business

model

Particular Danish professional or labour market interests in the establishment of the

company in Denmark;

Business models that “seize an opportunity and accelerate the development of a new

market or industry”158

The level of innovation and introduction of new products, services or processes within

their field.

Attractive market Market size, potential and entry barriers

Level of competition at the market and planned response by the applicant

Capable applicant /

team

Innovative business model

Assessment of skills, competences and experience in building and leading a business

Scalable business

model

Significant potential to create jobs and growth

Highly expandable

Recommendation

score

Degree to which start-ups are growth-oriented, innovative, tech-driven and bring

ideas, networks and knowledge about new markets

Overall perception of the quality of the business model and the applicants.

Further conditions

152 http://www.startupdenmark.info/faq/ (accessed 10 February 2016) 153 http://www.startupdenmark.info/apply/ (accessed 10 February 2016) 154 https://www.nyidanmark.dk/en-us/coming_to_dk/work/Start-up-denmark/Start-up-denmark.htm (accessed 10 February 2016) 155 http://www.startupdenmark.info/faq/ (accessed 10 February 2016) 156 https://www.younoodle.com/ (accessed 12 February 2016) 157 http://www.startupdenmark.info/apply/, (accessed 10 February 2016) 158 ibid


http://www.startupdenmark.info/apply/

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https://www.younoodle.com/

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Criteria Description

Financial requirements Proof of self-support159.

The amount necessary equals one year’s social benefits for single persons over 30;

In 2016 the amount is DKK 131,616 for the main applicant.

Physical presence Participation in the day-to-day operation of the business;

TCN who only have financial interest in the business (e.g. shareholders) are

excluded160.

Assessments are based on scores from 1 to 5 in relation to five evaluation criteria. To receive an

approval the entrepreneur needs at least 3.0 in average score for all five criteria and additionally at

least 4.0 in the recommendation criteria161.

Establishment Card

Since 1 January 2015, third country nationals who have a Danish master’s or PhD degree can be

granted the residence permit ‘Establishment Card’ to establish themselves in Denmark after

graduating from university. The Establishment Card gives the holder the right to take up employment

without a separate work permit and the right to work as an entrepreneur162.

The applicant must be able to support him/herself during the first year under the Establishment Card.

The annual amount is DKK 84,828 in 2016 and equals one year’s social benefits for single persons

under 30163.

The Establishment Card is not connected to Start-up Denmark and is open for Danish graduates who

want to establish a business, with no sector limitations.

Support scheme

In terms of support for the innovative entrepreneurs there is no particular scheme in place in Denmark.

The application for the Start-up Denmark scheme is not connected to an ecosystem or other support

for the scale up of the company.

Although Start-up Denmark is described as “a gateway for talented foreign entrepreneurs to

Denmark’s vast start-up opportunities, such as accelerators, co-working spaces, investment funds,

research centers, as well as grassroots initiatives”, the connection between the residence permit that

entrepreneurs get via the Start-up Denmark scheme and a broader support scheme is not obvious.

The start-up scene in Denmark is diverse and there are many options for new start-ups to be involved

in a network or an ecosystem. An example is the ‘Danish Start-up Council’164 aiming at increasing

Denmark’s visibility for entrepreneurs. Members include educational institutions, co-working spaces

and social networks. The council was developed by the largest start-up ecosystem in Scandinavia, the

‘Rainmaking Loft’165 that includes co-working spaces, contact to business angels as well as

connections to the British accelerator ‘Start-upbootcamp’166 and other start-ups. The Danish

ecosystem further includes ‘Accelerace’167, one of the main accelerator programmes in Europe, the

159 https://www.nyidanmark.dk/en-us/coming_to_dk/work/Start-up-denmark/Financial-requirements.htm (accessed 12 February 2016) 160 https://www.nyidanmark.dk/en-us/coming_to_dk/work/Start-up-denmark/Start-up-denmark.htm (accessed 10 February 2016) 161 http://www.startupdenmark.info/faq/ (accessed 10 February 2016) 162 https://www.nyidanmark.dk/en-us/coming_to_dk/work/Establishment-card/Establishment-card.htm (accessed 16 February 2016) 163 https://www.nyidanmark.dk/en-us/coming_to_dk/work/Establishment-card/Financial-requirements.htm (accessed 17 February 2016) 164 For further information see here: http://www.danishstartupcouncil.com/ (accessed 17 February 2016) 165 For further information see here: http://www.rainmakingloft.dk/ (accessed 17 February 2016) 166 For further information see here: http://www.startupbootcamp.org/ (accessed 17 February 2016) 167 For further information see here: http://accelerace.dk/ (accessed 16 February 2016)

https://www.nyidanmark.dk/en-us/coming_to_dk/work/Start-up-denmark/Financial-requirements.htm




https://www.nyidanmark.dk/en-us/coming_to_dk/work/Establishment-card/Financial-requirements.htm

http://www.danishstartupcouncil.com/

http://www.rainmakingloft.dk/

http://www.startupbootcamp.org/

http://accelerace.dk/


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‘Silicon Vikings’ network168 aiming to connect Nordic start-ups with Silicon Valley and the start-up

network ‘Øresund Start-ups’169 connecting tech entrepreneurs in Denmark and Sweden.

There is no information available of support offered from the Danish authorities for entrepreneurs who

hold an Establishment Card.

Application Procedure

Start-up Denmark

The procedure length for the Start-up Denmark scheme is maximum ten weeks:

■ The first step is submitting the application online to the expert panel appointed by the Danish

Business Authority for review. The experts review the application within six weeks.

■ The second step includes the application for the residence permit under the Start-up Denmark

scheme, if the evaluation submitted by the expert panel is positive. Four weeks after the second

step in the application, the applicant receives the results.

A positive evaluation from the experts is not a guarantee for receiving the residence permit170. The first step in the application procedure is online through the webportal ‘YouNoodle’. The second step of the actual application for the residence permit is done online as well through the webpage171 of the Danish Agency for International Recruitment and Integration172. The application is the same regardless whether the applicant is already in Denmark or abroad173. The applicant must create a Case order ID174 and pay a processing fee to the Danish Agency for International Recruitment and Integration, before submitting an application175. The fee for application under the Start-up Denmark scheme is set at DKK 1,845 (Euro 248) in 2016176. When applying for the visa and residence permit the TCN must submit:

■ The positive evaluation from the expert panel of the Danish Business Authority

■ The ownership structure of the company (if there are multiple owners)

■ Proof that the applicant can support him/herself during the first year in Denmark.

After a successful application the residence and work permit under the Start-up Denmark scheme is issued for a maximum duration of two years177. The permit can be extended for three years, if all the conditions of the original residence permit are still met. The entrepreneurs receive a residence permit letter outlining the exact conditions for the permit. The application for an extension may be submitted three months before the original permit expires. In order to be granted an extension, a new evaluation from the expert panel must be

168 For further information see here: http://siliconvikings.com/#about-us (accessed 16 February 2016) 169 For further information see here: http://oresundstartups.com/about-us/ (accessed 16 February 2016) 170 http://www.startupdenmark.info/faq/ (accessed 10 February 2016) 171 https://www.nyidanmark.dk/xform/formularer/sd12.form.aspx (accessed 16 February 2016) 172 https://www.nyidanmark.dk/en-us/authorities/agency-retention-recruitment/, accessed 16 February 2016 173 Applicants from abroad who require a visa to enter Denmark must apply separately for the visa. See here: https://www.nyidanmark.dk/en-us/coming_to_dk/work/how-to-apply/the-application-process.htm (accessed 16 February 2016) 174 https://www.nyidanmark.dk/en-us/coming_to_dk/fee/Payment/SBOrderID, accessed 16 February 2016 175 https://www.nyidanmark.dk/en-us/coming_to_dk/fee/about_fees/three-steps-of-application-process.htm, accessed 16 February 2016 176 https://www.nyidanmark.dk/en-us/coming_to_dk/fee/about_fees/overview-of-case-categories-and-fees.htm, accessed 16 February 2016 177 https://www.nyidanmark.dk/en-us/coming_to_dk/work/how-to-apply/self-employed-person.htm, accessed 16 February 2016

http://siliconvikings.com/#about-us

http://oresundstartups.com/about-us/


https://www.nyidanmark.dk/xform/formularer/sd12.form.aspx

https://www.nyidanmark.dk/en-us/authorities/agency-retention-recruitment/

https://www.nyidanmark.dk/en-us/coming_to_dk/work/how-to-apply/the-application-process.htm

https://www.nyidanmark.dk/en-us/coming_to_dk/fee/Payment/SBOrderID

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included178. The fee for the extension is the same as for the original permit and has to be submitted to the Danish Agency for International Recruitment and Integration179.

Establishment Card

The length of procedure for the Establishment Card is four weeks in total starting with the application

submission until the decision of the authorities. The graduate must submit the application six months

after the completed educational programme at the latest180.

The application process is comparable to the process of obtaining a residence permit under the Start-

up Denmark scheme. The application is submitted online. However, there is no evaluation of the

business plan through an expert panel. Furthermore, there are no restrictions in terms of type of

business an Establishment Card holder may run. The card is granted for a maximum of two years and

cannot be extended. However, after having a residence in Denmark for two years under scheme, the

entrepreneurs who are eligible may apply for a residence permit under the Start-up Denmark

scheme181.

Rights granted under the scheme

An entrepreneur may establish a business under the Start-up Denmark scheme. The available

information about the scheme does not indicate that the entrepreneur has other rights at the labour

market, i.e. take up employment in another company. Generally, a work permit is necessary to take up

employment in Denmark. This implicates that the entrepreneur is only allowed to take up employment

in another company, if he/she changes from the original permit under the scheme to a work permit in

Denmark182. A change of status is possible; the entrepreneur may apply for a six months visa (green

card) to look for a job183.

From the obtained information, no facilitation to permanent residence can be identified184. The basic

requirements that all applicants for a permanent residence permit must fulfil include:

■ residence in Denmark for at least six years or four years (if supplementary requirements are met)

■ full-time employment or self-employment of at least two years and six months within the last three

years

■ being employed at the time of application185.

In addition to the basic requirements at least two of four supplementary requirements must be fulfilled,

including passing an active citizen exam test186. Supplementary requirements are full-time

178 https://www.nyidanmark.dk/en-us/coming_to_dk/work/Start-up-denmark/Start-up-denmark.htm (accessed 10 February 2016) 179 https://www.nyidanmark.dk/en-us/coming_to_dk/fee/about_fees/overview-of-case-categories-and-fees.htm, accessed 16 February 2016 180 https://www.nyidanmark.dk/en-us/coming_to_dk/work/Establishment-card/Establishment-card.htm (accessed 16 February 2016) 181 ibid 182 For more information on the different types of permits see here: https://www.nyidanmark.dk/en-us/coming_to_dk/work/work.htm (accessed 16 February 2016) 183 https://www.nyidanmark.dk/en-us/coming_to_dk/work/greencard-scheme/greencard-scheme.htm (accessed 16 February 2016) 184 For detailed information about the requirements, see here: https://www.nyidanmark.dk/en-us/coming_to_dk/permanent-residence-permit/permanent-residence-permit.htm (accessed 16 February 2016) 185 The basic requirements further include: all requirements for the current residence permit are met; over the age of 18; certain crimes cannot be committed; no overdue public depts; no public benefits received within the last 3 years; accepted the declaration of integration and passed the Danish language test 2, see here https://www.nyidanmark.dk/en-us/coming_to_dk/permanent-residence-permit/permanent-residence-permit.htm (accessed 16 February 2016) 186 The active citizen exam is a new written exam that will be introduced from June 2016 onwards. Before the introduction, the applicants for citizenship have to prove that they are active citizens in Denmark via e.g. participating in a board, organisation or similar. When it is introduced, the exam will include questions about daily life in Demark, the social system, labour market, geography, history and culture. It will be a multiple choice test




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employment or self-employment for at least 4 years within the last 4 years and 6 months; yearly

taxable income over the last two years of at least DKK 270.000 (2016 level) or above on average and

passing a Danish language test level three or equivalent187..

Family reunification for certain family members is possible: the spouse, registered partner or

cohabiting partner as well as children under the age of 18, who are living with the entrepreneur. The

entrepreneur must prove that he/she can support the family members during their first year of stay188.

The application is submitted online for each accompanying family member and a case processing fee

of DKK 1,720 (Euro 231) must be paid upon applying189. The processing time is two months190.The

residence permit of the family members includes the right to reside and work in Denmark. The duration

of the residence permit of family members is normally the same duration as the permit of the

entrepreneur (maximum four years)191.

The same rights and conditions apply for the Establishment Card. However, the financial support for

accompanying family members is lower compared to the amount necessary under the Start-up

Denmark scheme192.

The following table provides a summary of the requirements for the Start-up Denmark scheme and the

Establishment Card.

Table A1.2 Start-up Denmark and Establishment Card compared

Overview Start-up Denmark Establishment Card

Admission criteria

Innovative business model

Financial requirements (DKK

131,616; EUR 17,684)193

Physical presence

Danish Degree

Financial requirements (DKK 84,828;

EUR 11,397)

Support scheme None None

Procedure

Submitting the business plan to the

expert panel

Applying for the residence permit

online

Apply for the residence permit online

Duration of procedure (max.) Ten weeks Four weeks

Application fee DKK 1,845 (approx. EUR 235)

and a textbook in Danish is provided. See here: https://www.nyidanmark.dk/en-us/coming_to_dk/permanent-residence-permit/active_citizen.htm (accessed 16 February 2016) 187 The Danish language test has to be passed in both, the basic and the supplementary requirements. In the basic requirements, the test 2 must be passed, which is mid-level and in order to fulfil the supplementary requirements, the test 3 must be passed, which is the equivalent to language knowledge necessary to pass the Danish ‘gymansium’ final exams, See here: https://www.nyidanmark.dk/en-us/coming_to_dk/permanent-residence-permit/language_skills.htm (accessed 16 February 2016) 188 https://www.nyidanmark.dk/en-us/coming_to_dk/work/Start-up-denmark/Financial-requirements.htm (accessed 12 February 2016) 189 https://www.nyidanmark.dk/en-us/coming_to_dk/fee/about_fees/overview-of-case-categories-and-fees.htm (accessed 20 April 2016) 190 https://www.nyidanmark.dk/en-us/authorities/agency-retention-recruitment/service-goals/service-goals.htm (accessed 16 February 2016) 191 https://www.nyidanmark.dk/en-us/coming_to_dk/work/accompanying-family-members.htm (accessed 16 February) 192 The amount depends on the type of family member and whether the family members apply jointly with the applicant or at a later stage, If there is a joint application of main applicant and spouse (with or without children), the amount is DKK 169,656 (DKK 84,828 / EUR 11,398, if spouse (with our without children) applies alone). If the main applicant applies with a child/children only, the amount is DKK 167,172 / EUR 22,463 (DKK 82,344 / EUR 11,064, if child/children apply alone). , See here: https://www.nyidanmark.dk/en-us/coming_to_dk/work/Establishment-card/Financial-requirements.htm (accessed 16 February 2016) 193 Conversion made on 20 April 2016. Please note that the actual amount might change.

https://www.nyidanmark.dk/en-us/coming_to_dk/permanent-residence-permit/active_citizen.htm

https://www.nyidanmark.dk/en-us/coming_to_dk/permanent-residence-permit/active_citizen.htm

https://www.nyidanmark.dk/en-us/coming_to_dk/permanent-residence-permit/language_skills.htm

https://www.nyidanmark.dk/en-us/coming_to_dk/permanent-residence-permit/language_skills.htm

https://www.nyidanmark.dk/en-us/coming_to_dk/work/Start-up-denmark/Financial-requirements.htm


https://www.nyidanmark.dk/en-us/authorities/agency-retention-recruitment/service-goals/service-goals.htm

https://www.nyidanmark.dk/en-us/coming_to_dk/work/accompanying-family-members.htm




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Overview Start-up Denmark Establishment Card

Duration of permit (max.) Two years Two years

Extension possible Yes

for three years

No

Change of status possible Yes Yes

Facilitation of permanent

residence No No

Rights Self-employment Access to the labour market

Self-employment

Restrictions on economic

activity

Restricted to innovative, ideally tech-

driven sectors

Businesses such as restaurants,

consultancy firms, retail shops and

import/export enterprises are

excluded

No sectoral restrictions

Family members

Family reunification possible Yes

Requirements Financial requirements (sufficient funds for one year)

Application procedure Applying for the residence permit online

Duration of procedure Two months

Duration of permit Same as permit holder, max. four years

Rights of family members Full access to the labour market

Statistical overview

In 2015 in total 211,769 third country nationals have been residing in Denmark194. In 2015 10,129

residence permits for work purposes were granted195. There is only limited disaggregated data

available on what types of permits are issued under ‘work permits’. Statistics Denmark provided only

information about the number of permits issued under the green card work permit: 1,243 issued in

2015196. The Danish , including . According to the Eurostat labour force survey a total of 17,300 self-

employed third country nationals were registered in Denmark197.

The Start-up Denmark scheme was introduced on 1 January 2015. There is limited data available for

the scheme as of now. In the period of January-December 2015 the scheme received 140 applications

(from 200 TCNs). Only 37 applications were evaluated positively (18%) and the top three nationalities

were Canada, India and the United States198. Although, there seems to be no limited target for the

Start-up Denmark scheme, it is clearly aimed at a limited number of participants, rather small scale to

attract innovative, tech-driven businesses. There seem to be no similar restrictions in place for the

Establishment Card, as it is open for all graduates of Danish universities. There is no disaggregated

official statistical data available for the Establishment Card.

194 http://www.dst.dk/Site/Dst/Udgivelser/GetPubFile.aspx?id=20195&sid=popu, p. 19 (accessed 17 February 2016) 195 Own calculations from Statistics Denmark available at: http://www.dst.dk/en/Statistik/nyt/relateret.aspx?psi=1934 (accessed 16 February 2016) 196 Data provided via email by Statistics Denmark on 13 April 2016. 197 Eurostat Self-employment by sex, age and citizenship (1 000) [lfsa_esgan] 198 Council of the European Union (2016) “Access to talent: a European visa/permit for start-up founders”, Presidency discussion paper for the lunch debate during the Informal meeting of Ministers responsible for research and innovation 27 January 2016, Amsterdam

http://www.dst.dk/Site/Dst/Udgivelser/GetPubFile.aspx?id=20195&sid=popu

http://www.dst.dk/en/Statistik/nyt/relateret.aspx?psi=1934


109

Evaluation of the scheme

Generally Denmark can be described as an attractive destination for entrepreneurs and the Danish

authorities are promoting the quality of life and the close network of Nordic countries that are

favourable for entrepreneurs199.

The Start-up Denmark scheme may certainly attract entrepreneurs from third countries. The branding

of the scheme is done mainly through the online portal from the Danish Business Authority:

‘http://www.start-updenmark.info/’.

In sum, several issues of Start-up Denmark remain to be addressed:

■ The selection process of the Start-up Denmark scheme can generally be evaluated as positive.

The selection decisions are left to expert panel, and not government officials. At the strategic level

it seems to be clear that the Start-up Denmark scheme aims to attract high-impact start-ups from

innovative sectors. However, it remains unclear how transparent the entry criteria are in practice

and how the selection process is conducted in practice. It seems is not clear how the different

selection criteria are weighted. The decision making process lacks transparency; there is no

information available about the process itself and how the decisions made by the experts are

justified. It remains open whether these issues will be part of an evaluation of the scheme.

■ The lack of a connection to a support scheme might not be favourable for the Start-up Denmark

scheme. The tech start-up scene in Denmark strives to be a global one and there are several

examples of co-working spaces, accelerators and networks that entrepreneurs can join after their

successful application for the Start-up Denmark scheme200. However, none of these come as a

‘package’. The entrepreneurs need to build up their networks and connections to the Danish start-

up ecosystems without specific support from the government. On the official website of Start-up

Denmark “free tailored counselling in public business development centres” is mentioned with the

aim to boost the start-ups and guide the entrepreneurs through Denmark’s ecosystems201. It

remains unclear how the connection to the existing ecosystems is supposed to happen: whether it

is supposed to happen organically, or whether it will be led by the experts in the panel evaluating

the applicants. Considering the size of Denmark, an organic connection to ecosystems might be

feasible, as it is likely that the start-ups cluster in one or two regions. Currently, the way the

inclusion of start-ups under the Start-up Denmark scheme into ecosystems should work remains

unclear.

■ The Start-up Denmark scheme is a highly targeted start-up visa model, in line with the country’s

general pro-entrepreneurship stance. The stated aim is to ‘grow high-impact start-ups in Denmark’.

It remains unclear whether the policy makers in Denmark are assessing possible consequences

for start-ups from Danish founders and the long term consequences for the economy: the

possibility that new entrants might disrupt industries, putting Danish-founded firms (and perhaps

their workers) out of business202.

■ The Start-up Denmark scheme and the Establishment card might attract a similar type of

applicants, namely highly skilled third country nationals. However, the Start-up Denmark scheme

has a focus on innovative businesses, whereas the focus of the Establishment card is broader.

However, the connection between the two schemes is to be explored. It is unclear whether the

Establishment card is seen as an entrance permit for the Start-up Denmark scheme or more

broadly as an entrepreneurship / talent retention scheme. An open issue is how entrepreneurs

under the Establishment Card can switch to the Start-up Denmark scheme and what possibilities

those entrepreneurs out of scope of the Start-up Denmark scheme have.

199 http://www.startupdenmark.info/why-denmark/ (accessed 16 February 2016) 200 See section 2.1 in this report 201 Start-up Denmark(2016), “About - What is Start-up Denmark?”, http://www.startupdenmark.info/ (accessed 15 February 2016) 202 See Nathan, M. (2014), “The wider economic impacts of high-skilled migrants: a survey of the literature for receiving countries”, IZA Journal of Migration 3 (4): 1-20.




110

■ There are sector restrictions in place for the Start-up Denmark scheme, excluding restaurants,

retail shops or similar. However, it is not clear what happens, if a start-up identifies a market in a

sector outside the scope. Further open points are the review of the sectors, including when they

are reviewed (e.g. once per year) and how the sectors are identified by the government.

■ The evaluation criteria concerning the success of the start-ups two years after the initial permit

under the Start-up Denmark scheme are not clearly outlined. The measurement of the criteria is

currently unclear as well. In order to be granted an extension for the permit, the initial conditions

must be fulfilled. As the exact conditions are outlined in the residence permit letter, the extension

decisions seem to be made on a case by case basis.

The evaluation of the success of the Start-up Denmark scheme terms of the number of start-ups and

entrepreneurs attracted, investment and job creation is currently not possible, since the scheme was

introduced quite recently, on 1 January 2015. The Danish Government has not published any data on

the number of permits granted, or on the number of total applications yet.

The permit under the Start-up Denmark scheme is granted for two years and only after these two

years the permit holder is evaluated by an expert panel. The first evaluation results might be available

in 2017. This evaluation might shed light on some of the open issues outlined above.

References

■ CARIM-India (2013), “An overview of highly skilled labour migration in Denmark with a focus on

Indian nationals”, Short Research Report Highly-Skilled Migration Series CARIM-India RR2013/43

■ Council of the European Union (2016) “Access to talent: a European visa/permit for start-up

founders”, Presidency discussion paper for the lunch debate during the Informal meeting of

Ministers responsible for research and innovation 27 January 2016, Amsterdam

■ Danish Business Authority (2016), “Entrepreneurship: Role of the Authority”,

https://danishbusinessauthority.dk/role-authority , accessed 16 February 2016

■ Desiderio, M.V. and Mestres-Domènech, J. (2011), “Migrant Entrepreneurship in OECD

Countries”, International Migration Outlook, OECD SOPEMI

■ Nathan, M. (2014), “The wider economic impacts of high-skilled migrants: a survey of the literature

for receiving countries”, IZA Journal of Migration 3 (4): 1-20.

■ New to Denmark, dk (2016), “Establishment card” https://www.nyidanmark.dk/en-

us/coming_to_dk/work/Establishment-card/Establishment-card.htm (accessed 16 February 2016)

■ New to Denmark, dk (2016), “Self-employment” https://www.nyidanmark.dk/en-

us/coming_to_dk/work/self_employement.htm (accessed 16 February 2016)

■ New to Denmark, dk (2016), “Start-up Denmark (self-employment)” https://www.nyidanmark.dk/en-

us/coming_to_dk/work/Start-up-denmark/Start-up-denmark.htm , accessed 10 February 2016

■ Statistics Denmark (2016), “Asylum applications and residence permits”

http://www.dst.dk/en/Statistik/nyt/relateret.aspx?psi=1934 (accessed 16 February 2016)

■ Start-up Denmark (2016), “About - What is Start-up Denmark?”, http://www.start-updenmark.info/

(accessed 15 February 2016)

■ The World Bank (2016a), “Economy Rankings” http://www.doingbusiness.org/rankings (accessed

15 February 2016)

■ The World Bank (2016b), “Doing Business 2016, Economy Profile Denmark 2016”, The World

Bank

https://danishbusinessauthority.dk/role-authority







http://www.dst.dk/en/Statistik/nyt/relateret.aspx?psi=1934


http://www.doingbusiness.org/rankings


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Annex 2 Country Fiche: France

Key Messages:

In May 2015 France announced the introduction of a start-up programme for foreign

entrepreneurs: ‘The Paris French Tech Ticket’.

The overall business environment in France is favourable for innovative entrepreneurship.

Especially the city of Paris is seen as a world leader in the innovation economy.

Entrepreneurs who are accepted for the French Tech Ticket enjoy a substantial support

during the 6-month programme, including funds of €12,500.

The application procedure is detailed and includes a twofold process.

In the period of June – September 2015, 722 startup projects were submitted, for a total of

1,372 applicants and 5,677 expressions of interest from over 100 countries

The programme is highly selective and accepted only 3% of all applications (50 start-ups).

The aim of the French Government is to continue with the programme and expand it to other

French Tech Metropoles throughout France.

A second scheme aiming at attracting entrepreneurs (but also investors) from third countries

to France is the ‘Carte de séjour compétences et talents’ (‘residence permit for skills and

talents’).

On 7 March 2016 the French government introduced a new law on immigration entailing the

permit ‘La carte passeport-talent (talent passport)’, which is support to remedy the current

residence permit for skills and talents. However, the ‘talent passport’ will not be issued

before November 2016.


112


In May 2015 France announced the introduction of a start-up programme for foreign entrepreneurs:

‘The Paris French Tech Ticket’. Applications for the programme opened in June 2015 and the

programme is officially running since January 2016. The aim of the programme is to attract

entrepreneurs from third countries to set-up their start-up in Paris. Through the programme the French

Government wants to attract foreigners 'who have innovative entrepreneurial projects with

international potential'203. The scheme has a quota of 50 entrepreneurs for six months up to one year

and is targeted at innovative and scalable start-ups to contribute to a fast development of innovation

and start-up ecosystems in the country204.

The overall business environment in France is favourable for innovative entrepreneurship. Especially

the city of Paris is seen as a world leader in the innovation economy and the third most appealing city

for foreign investment205. Many successful start-ups such as the car sharing platform Blablacar being

one of the five most valuable start-ups in Europe206 or the streaming platform Deezer207 have been

developed in France. There are around 4,000 start-ups located in Paris, and in 2016 the world’s

largest digital business incubator is scheduled to open its doors to 1,000 start-ups with support of the

Paris municipality208. The ecosystem ‘La French Tech’ that is made up of entrepreneurs, investors,

engineers, designers, developers, media, and government agencies is working towards start-up

growth in France and international promotion of France as desirable location for high growth start-

ups209

Entrepreneurship is a desirable career choice in France and it is perceived positively in the French

society210. France ranks 27th on the World Bank ‘ease of doing business index’ (out of 189

economies), which is measured through the ease of starting a business, registering a property, getting

credit, protecting minority investors or trading across borders211. In recent years the French

Government introduced several initiatives aimed to encourage start-up creation and to boost

innovation. Besides tax incentives whereby start-ups are exempt of paying social taxes for up to eight

years, the French Government invested around €200 million in accelerators and incubators in 2015212.

In the same year the French Tech Ticket was introduced to help entrepreneurs to develop their start-

up businesses. It was developed by the Ministry of the Economy, Industry and the Digital Sector in

partnership with the City of Paris, Business France the Ministry of the Interior and the Ministry of

Foreign Affairs and International Development and 10 leading incubators in Paris213. The first round of

203 French Tech Ticket (2016), “Get your ticket to Paris and launch your startup in a unique tech ecosystem”, http://www.frenchtechticket.paris/ (accessed 26 February 2016) 204 Goube, Josephine (2015), “Worldwide start-up visa policies compared”, Migreat. 205 Goube, Josephine (2015), “French Startup Visa: 1,400 foreign entrepreneurs knocking on the doors of Paris”, http://blog.migreat.com/2015/09/21/french-startup-visa-1400-foreign-entrepreneurs-knocking-on-the-doors-of-paris/?preview_id=3622 (accessed 26 February 2016) 206 BlaBlaCar (2016), “BlaBlaCar at a Glance” https://www.blablacar.co.uk/blog/blablacar-about (accessed 29 February 2016) 207 Deezer (2016), “About”, http://www.deezer.com/company/about (accessed 29 February 2016) 208 1000start-ups (2016), “Welcome to the world’s largest digital business incubator”, http://1000startups.fr/?lang=en (accessed 29 February 2016) 209 La French Tech (2016), “What is “La French Tech”?”, http://en.lafrenchtech.com/what-is-la-french-tech/ (accessed 29 February 2016) 210 GEM (2013), “High entrepreneurial desires but very low perception of entrepreneurial competences”, http://gemconsortium.org/country-profile/62 (accessed 29 February 2016) 211 The World Bank (2016), “Ease of doing business in France”, http://www.doingbusiness.org/data/exploreeconomies/france (accessed 29 February 2016). 212 Bloch, François (2016), “Rise of entrepreneurship in France”, https://home.kpmg.com/xx/en/home/insights/2016/02/rise-of-entrepreneurship-in-france.html (accessed 29 February 2016) 213 French Tech Ticket (2015), “Rules of the pilot version of the Paris French Tech Ticket”.







http://en.lafrenchtech.com/what-is-la-french-tech/


http://www.doingbusiness.org/data/exploreeconomies/france

https://home.kpmg.com/xx/en/home/insights/2016/02/rise-of-entrepreneurship-in-france.html


113

start-ups included in the pilot scheme of the French Tech Ticket was selected by the end of 2015.

Since January 2016 the 50 winning French Tech Ticket entrepreneurs are working in Paris and will

remain in the Programme for six months214.

A second scheme aiming at attracting entrepreneurs (but also investors) from third countries to France

is the ‘Carte de séjour compétences et talents’ (‘residence permit for skills and talents’) created in

2006 to attract a wide array of ‘foreign talents’. In February 2016 the French Government announced

the revision of the Immigration Law and on 7 March 2016 the revised ‘Law on the rights of foreigners

in France’ was published215. The law is a reform of the Carte de séjour compétences et talents’. The

law entails a provision for a new multi annual residence permit for highly skilled third country nationals

for the duration of 4 years, after one year. The permit titled ‘La carte passeport-talent (talent passport)’

was established to attract talented third country nationals and their family members. Job search or

business creation by students after completion of their studies in France are facilitated. The permit is

not tied to a job offer216. The permit will be valid from November 2016.

Due to the fact that the ‘talent passport’ has not been implemented yet, there is limited information

available concerning the design of the scheme. The present country fiche focuses on the ‘residence

permit for skills and talents’ and refers to the ‘talent passport’ where possible.


The specific requirements for the French Tech Ticket and the residence permit for skills talents are

described in detail in the following sections.

Admission criteria

Generally, third country nationals who want to enter France to start a business have to apply for a

long-stay visa at a French consulate in their current place of residence. Upon entering France the

entrepreneurs have two months to apply for a residence permit depending on the type of their

activities217.


Paris French Tech Ticket218

In order to be eligible for the Paris French Tech Ticket, the aspiring entrepreneurs must fulfil the

following criteria:

■ Early stage start-up or have a project for a start-up

■ Develop the start-up in Paris and be based in Paris for at least six months from January 2016

■ Be up to three people in a team (with maximum one French citizen in the team)

■ Speak English and / or French (the programme runs in English)

■ Have a valid visa to enter France

214 French Tech Ticket (2015), “Programme benefits“, http://www.frenchtechticket.paris/1/about (accessed 26 February 2016) 215 Legifrance (2016), “LOI n° 2016-274 du 7 mars 2016 relative au droit des étrangers en France (Law No. 2016-274 of 7 March 2016 on the right of foreigners in France)”, https://www.legifrance.gouv.fr/affichTexte.do;jsessionid=579834932897A953D49D0B631497EE84.tpdila22v_2?cidTexte=JORFTEXT000032164264&categorieLien=id (accessed 18 March 2016). 216 Ministère de l'Intérieur (Ministry of the Interior, 2016) “Loi 7 mars 2016 relative au droit des étrangers en France (The March 7 Law on the Rights of Foreigners in France)” http://www.immigration.interieur.gouv.fr/Immigration/Loi-du-7-mars-2016-relative-au-droit-des-etrangers-en-France (accessed 18 March 2016) 217 EMN (2014), “Ad-hoc query 565. Requirements for Operating a Business Activity” 218 Unless otherwise indicated the information stem from http://www.frenchtechticket.paris/7/faq (accessed 26 February 2016)

http://www.frenchtechticket.paris/1/about

https://www.legifrance.gouv.fr/affichTexte.do;jsessionid=579834932897A953D49D0B631497EE84.tpdila22v_2?cidTexte=JORFTEXT000032164264&categorieLien=id


http://www.immigration.interieur.gouv.fr/Immigration/Loi-du-7-mars-2016-relative-au-droit-des-etrangers-en-France


http://www.frenchtechticket.paris/7/faq


114

■ Be dedicated to the project

– Full time work in the programme (no other professional activity)

– Long term absences from the incubator only after agreement

The terms innovative and start-up are not particularly defined, but generally the start-up must be a

young and innovative company (not necessarily a tech company) with high growth potential.

Consulting firms, import-export businesses and franchise are not eligible for the programme. Further,

teams in which one of the founders has a side job or is returning to school next term are not eligible.

Finally, teams that cannot relocate to Paris for at least six months and those that have more than one

French cofounder cannot participate in the programme.

Carte de séjour compétences et talents (Residence Permit for Skills and Talents)219

The residence permit skills and talents is open to nine categories including entrepreneurs and

investors, but also young graduates, scientists, highly qualified workers, executive officers, inter-

company transferees, artists, as well as foreign workers with an international reputation in a scientific,

literary, intellectual, educational or sporting field.

The eligibility criteria are defined by the Commission Nationale des Compétences et Talents twice a

year assessing220:

■ The project’s contribution to the economic growth and the international outreach of France and the

country of origin;

■ The applicant’s motivation

■ Skills (university degree) and qualifications (3 to 5 years professional experience)

■ Means to carry out the project

Entrepreneurs and investors in an economic project need minimum investment of €300,000 or proof of

capacity to create a minimum of two sustainable jobs in France.

La carte passeport-talent (talent passport)221

The new ‘talent passport’ permit is supposed to summarize the existing policies for economic migration and be open for talented third country nationals and their family members with a maximum validity of four years. It will include 10 categories, out of which three include entrepreneurs. The first 7 categories include:

■ Third country nationals who are either in employment and who have obtained a master degree

from a national university or from a qualification awarding body mentioned in a list approved by

decree or recruited into a start-up company for undertaking research and development activities.

The start-up is defined by the fiscal administration as a company in business for less than 8 years,

employing less than 50 staff, with a yearly turnover of less than €50 million or assets of less than

€43 million and involved in applied research.

■ Third country nationals who are highly qualified workers for a duration of at least one year, with a

diploma of at least three year of further education (3 years after baccalaureate) or with at least five

year professional experience into a similar position. The residence permit is marked as the EU

Blue Card in France.

219 Unless otherwise indicated the information stem from http://www.consulfrance-washington.org/spip.php?article519 (accessed 29 February 2016) 220 EMN (2014), “Ad-hoc query 565. Requirements for Operating a Business Activity” 221 Unless otherwise indicated the information stem from: Legifrance (2016), “LOI n° 2016-274 du 7 mars 2016 relative au droit des étrangers en France (Law No. 2016-274 of 7 March 2016 on the right of foreigners in France)”, https://www.legifrance.gouv.fr/affichTexte.do;jsessionid=579834932897A953D49D0B631497EE84.tpdila22v_2?cidTexte=JORFTEXT000032164264&categorieLien=id (accessed 18 March 2016).

http://www.consulfrance-washington.org/spip.php?article519





115

■ Third country nationals who come to France as part of a project between branches of the same

company or between companies in the same group and who have been employed for at least

three months in the group or the company established outside France, and who have a signed

employment contract with the company or branch based in France (inter company transfer).

■ Third country nationals who hold a diploma equivalent to a master and who conduct research or

provide lectures at university level, as part of a hosting agreement signed with a public or private

organization with a remit for undertaking research or higher education body designated as such by

law. This residence permit is marked researcher (in line with Directive 2005/71 EC ).

■ Third country nationals who are legal representatives of an institution or a company established in

France, as long as they are employees or officers in an institution or an affiliated company of the

same group.

■ Third country nationals who are performers involved in arts or literature.

■ Third country nationals who are renowned internationally and who have an activity in France in

science, literature, arts, education or sports.

The categories referring to entrepreneurs include:

■ Third country nationals who obtained a degree equivalent to the Master degree or demonstrate a

professional experience of at least five years at comparable level and who create a company in

France with a business plan.

■ Third country nationals who create an innovative start up in France recognised by a public body.

■ Third country nationals who directly invest in France in an “economic project” (making a significant

contribution to the French economy i.e. bringing at least 50 Full Time Equivalent Jobs, invest at

least €10,000,000 in assets), which can be described as investors / entrepreneurs.

Support scheme

Paris French Tech Ticket

Entrepreneurs who are accepted for the French Tech Ticket enjoy a substantial support during the 6-

month programme. The support includes222:

■ Fast-track procedure to obtain the VLS-TS residence permit

■ Funds of €12,500 (6 months) as the competition prize.

■ If the start-up remains in the programme for another 6 months, it will be possible to get a second

prize of 12,500€ at the end of the 6 months. Each team member will get a prize.

■ Free space in a partner incubator, including a dedicated workspace, training sessions and events

by the incubator network and access to a senior mentor to support the growth of the start-up

■ Tailored programme of events

■ Help desk for assistance with the administration

■ A ‘landing pack’ to help entrepreneurs relocate to Paris

■ Lower prices on Air France flights, a Gold loyalty card and advertising for the start-up via Air

France

The incubators who are hosting the start-ups are partners of the programme. The selected start-ups

cannot choose the incubators, but are allocated to one of the partner incubators by the Final Selection

Committee of the French Tech Ticket. The incubators are223:

222 Unless otherwise indicated the information stem from http://www.frenchtechticket.paris/7/faq (accessed 26 February 2016) 223 http://www.frenchtechticket.paris/6/incubators (accessed 22 April 2016)

http://www.frenchtechticket.paris/7/faq

http://www.frenchtechticket.paris/6/incubators


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1. La Paillase: a community-oriented lab focused on fostering participatory, open-source and hands-

on projects

2. Usine IO: unique space that helps individuals design prototypes and supports them in the run-up

to manufacturing

3. Numa: an incubator focused on startups and digital innovation

4. StartUP42: aims to help early-stage technology startups go from the initial stage to the launch

stage under a four month acceleration programme

5. Starburst Accelerator: aerospace startups accelerator

6. 50 Partners: French incubator funded by 50 successful web/IT/media entrepreneurs

7. Construction & Energy Accelerator by Impulse Labs: identifies the most innovative startups that

propose breakthrough solutions to future challenges

8. 104factory: an incubator for startups in the arts and creative industries

9. Paris&CO: development and innovation agency for the city of Paris

10. Paris Pionnières: the leading incubator and network for women entrepreneur

The incubators were selected by the French Ministry of the Economy, Industry and the Digital Sector

in partnership with Bpifrance Financement, the City of Paris, Business France, the Ministry of the

Interior and the Ministry of Foreign Affairs and International Development, supported by the French

Tech Mission224. They offer professional workspace and services for the development of the start-up.

Since the selected projects are effectively installed in one of the partner incubators, they benefit from

the incubators’ experience and networks. Further, each start-up gets coaching by an advisor within the

receiving partner incubator225.

No support scheme for the residence permit for skills and talents is in place and there is no

information available on support as part of the talent passport as of now.


The Paris French Tech Ticket

The applications are submitted online on the French Tech Ticket website via an online submission

form. Further, applicants must upload a video pitch for their project. The applications are reviewed by

the partner incubators and a Final Selection Committee. The Final Selection Committee includes

experts from the Ministry of the Economy, Industry and the Digital Sector (Directorate General for

Enterprise), the Ministry of Foreign Affairs and International Development (Directorate of Enterprise

and the International Economy), the Ile de France Regional Directorate for Enterprises, Competition,

Consumption, Work and Employment (DIRECCTE), Bpifrance Financement, Business France, the

City of Paris French Tech Mission and other qualified individuals226.

Applications will be reviewed in a two stage process by the above described independent panel.

Successful applicants will be interviewed by at least one accelerator before being offered a spot.

The selection is conducted based on the following criteria:

■ Team competences

– Technical, business and other competences

– The mix of complementary professional skills in the team and interpersonal skills

– Possibility to develop a project on an international scale

– Quality of application

224 French Tech Ticket (2015), “Rules of the pilot version of the Paris French Tech Ticket”. 225 ibid 226 French Tech Ticket (2015), “Rules of the pilot version of the Paris French Tech Ticket”.


117

■ Market prospects and potential of the business227

– Understanding of the market and the business environment

– Response to market requirements and analysis of market challenges

– Business plan, anticipated market share

– Business strategy for France, Europe and internationally

■ Offer and feasibility

– Innovative project; differentiation from the competition

– Feasibility studies carried out

– Intellectual property strategy

– Funding envisaged

In the first stage the above criteria are evaluated through the partner incubators via an online interview

between the applicants and two experts from the partner incubators. In a second stage the Final

Selection Committee selects the maximum 50 start-ups from the preselected applicants.

Selected entrepreneurs who require a Visa have to apply for a VLS-TS Visa, which is the only visa

that can only be used as a residence permit. The visa is usually issued for the duration of a contract.

In the case of entrepreneurs under the French Tech Ticket this would be six months (with a one-time

extension for another six months)228.

Carte de séjour compétences et talents (Residence Permit for Skills and Talents)

Applications for the residence permit for skills and talents have to be submitted before entering France at the embassy or consulate in the country of origin. The application requires a number of supporting documents, including a detailed letter describing the project and specifying its interest for France and for the applicant’s country of origin229. The application should broadly demonstrate that the applicant’s project is meeting the criteria set forth by the National Commission of Competences and Talents and prove that the applicant is capable of carrying out this project.

La carte passeport-talent (talent passport)

Currently there is limited information available on the application procedure for the ‘talent passport’. According to the law on the rights of foreigners in France, for the three categories of entrepreneurs described above, the following criteria must be fulfilled:

■ The following documents:

– Long Stay Visa application form

– Long stay visa fee

– Picture ID

– Valid Passport and a copy thereof

– Proof of address in France

– Utility bill

– Non criminal record certificate

– Detailed resume

227 The applicants have to conduct a business analysis similar to a SWOT analysis (strengths – weaknesses – opportunities – threats) for a new market 228 Migreat (2015),”Which French visas can also be used as residence permits?”, https://www.migreat.com/en/what-french-visa-is-valid-as-a-residence-permit-a139 (accessed 29 February 2016) 229 Further requirements are described here : http://www.consulfrance-washington.org/spip.php?article519 (accessed 29 February 2016)

https://www.migreat.com/en/what-french-visa-is-valid-as-a-residence-permit-a139



118

– Detailed letter describing the professional project and specifying its interest for France and for

the applicant’s country of origin

– Any document confirming the applicant’s likelihood of completing the project, experience in the

field, publications, exhibitions etc.

– Proof that of funds to cover own stay in France as well as to support the project. (reliable

detailed business plans may be admitted, but proof of significant funds to jump start the activity

will be required)

– a birth certificate fully translated to French

■ Sufficient knowledge of French Language and or engagement to learn French while residing there

■ Medical examination after coming to France or before departure depending on country of origin

However, so far exact criteria on how the start-ups are selected and what the requirements are to be recognized as a start-up under the ‘talent passport’ are missing.



The entrepreneurs have the possibility to renew their participation in the programme for another six

months. They are re-examined by the Final Selection Committee. The committee decides on the basis

of a new application form and the development prospects for the project. The committee is supported

from the incubators hosting the start-ups, in their decision on whether those start-ups can extend their

stay in the programme230. It is not clear whether family reunification is possible.


The visa is issued for three years and is renewable, if the conditions of the first permit are still valid.

Family reunification is possible and in any case the family members including the spouse and

underage children are issued a ‘Vie Privée et Familiale’ card giving them the right to legally reside and

work in France. In order to be granted the visa, the accompanying family (spouse and children) has to

file an application, and enclose civil registry documents showing family connections with the main

applicant231.

None of the available schemes provides a faster access to permanent residence or French citizenship.

The following table A2.1 provides a summary of the requirements for the schemes in France.

Table A2.1 The Paris French Tech Ticket, the residence permit for skills and talents and the talent passport compared

Overview Paris French Tech Ticket Carte de séjour compétences et talents (residence permit for skills and talents)

La carte passeport-talent (talent passport) from November 2016232

230 French Tech Ticket (2015), “Rules of the pilot version of the Paris French Tech Ticket”. 231 http://www.consulfrance-washington.org/spip.php?article519 (accessed 29 February 2016) 232 This information is tentative and might change after the law has been fully implemented in November 2016.



119

Overview Paris French Tech Ticket Carte de séjour compétences et talents (residence permit for skills and talents)

La carte passeport-talent (talent passport) from November 2016232

Admission

criteria

Early stage start-up or have a project

for a start-up

Develop the start-up in Paris and be

based in Paris for at least six months

from January 2016

Be up to three people in a team (with

maximum one French citizen in the

team)

Speak English and / or French (the

programme runs in English)

Have a valid visa to enter France

Be dedicated to the project

The project’s contribution to

the economic growth and the

international outreach of

France and the country of

origin;

The applicant’s motivation

Skills (university degree) and

qualifications (3 to 5 years

professional experience)

Means to carry out the

project

Documents (see above)

Sufficient knowledge of

French Language and

or engagement to learn

French while residing

there

Medical examination

after coming to France

or before departure

depending on country of

origin

Support

scheme

Admission to the programme

provides access to an incubator in

Paris offering a professional

workspace, experience and

networks, coaching by an advisor

within the receiving partner incubator

No No

Duration of

procedure

(max.)

3-4 months 2-3 months N/A

Application

fee233

€99 for the visa €99 for the visa N/A

Duration of

permit (max.)

Six months Three years Maximum 4 years

Extension

possible

Yes

for another six months

Yes N/A

Change of

status possible

Yes Yes N/A

Facilitation of

permanent

residence

Not obvious

Fast-track procedure to obtain a

French residence permit is

mentioned, but no explanation is

provided

No N/A

Family

reunification

possible

N/A Yes Yes

Duration of

permit

N/A Same as for permit holder Same as for permit

holder

Rights of family

members

N/A Full access to the labour

market

Full access to the

labour market

233 Migreat (2015), “What are the French work visa requirements?”, https://www.migreat.com/en/what-do-i-need-to-apply-for-a-work-visa-s145 (accessed 29 February 2016)

https://www.migreat.com/en/what-do-i-need-to-apply-for-a-work-visa-s145



120



The call for the French Tech Ticket was launched in June 2015 and ended in September 2015. During

this period 722 startup projects were submitted, for a total of 1,372 applicants and 5,677 expressions

of interest from over 100 countries234. According to the French Government the top 5 applicants’

countries of origin (excluding France) were India, United States, Russia, Brazil and Egypt. Around

86% of the applicants were from outside EU, 14% from within the EU and another 15% from North

America. Most applicants are highly educated, 93% of applicants have a bachelor’s degree or higher

and they are on average 31 years old235.


According to the Ministry of Interior, the (Residence Permit for Skills and Talents did not meet its

objectives. In the period 2008-2011, less than 300 Residence permits for competences and talents

were issued on average per year. Since its creation in 2006 and up until the end of 2012, only 1,364

permits were granted to TCNs. This represents an average of 200 cards a year when the initial

estimations were of 2,000 permits a year236.


The Carte de séjour compétences et talents failed to attract the numbers expected: roughly 300

annual applications were received when the target was of 2000. This is in a strong contrast to the

French Tech Ticket that attracted a high number of applications in its pilot year 2015/16. The reasons

for that might be twofold, first the comprehensive support programme via the French Tech Ticket

including mentoring and connections to leading incubators; and second the funds of €12,500, which

can be regarded as a personal soft-landing benefit for the entrepreneur and less as an investment in

the company. On average the selected projects have raised €250,000. In total one out of every five

project has raised funds. The programme can also be described as a reminiscent of a programme

launched by Chile – Start-Up Chile - in 2010 that is attracting around 200 – 250 start-ups per year237.

The French Tech Ticket scheme has a powerful brand. It is widely advertised through the online

platform as well as through the Government Agency Créative France that aims at promoting France

and the scheme for innovative start-ups238. The success of the French Tech Ticket is a confirmation

for the French Government that France has ‘international appeal’. As the programme currently accepts

only 50 start-ups, one cannot argue a mass appeal, but rather explain the programme in the context of

good public relations for the French tech scene. In this context the boutique character of the scheme is

obvious and was underlined by a welcoming event the by the French President and the Minister for

Economy at the Elysee Palace in March 2016239. The Minister of State for Digital Affairs explained in

234 Goube, Josephine (2015), “French Startup Visa: 1,400 foreign entrepreneurs knocking on the doors of Paris”, http://blog.migreat.com/2015/09/21/french-startup-visa-1400-foreign-entrepreneurs-knocking-on-the-doors-of-paris/?preview_id=3622 (accessed 26 February 2016) 235 The Government of France (2016), “French Tech Ticket. Paris, the capital of start-ups!”, http://www.gouvernement.fr/en/french-tech-ticket (accessed 29 February 2016) 236 Ministère de l’intérieur (Ministry of the Interior, 2013), “Document préparatoire au débat sans vote sur l’immigration professionnelle et étudiante (Preparatory document for a discussion without voting on professional and student immigration)”, http://www.immigration.interieur.gouv.fr/Info-ressources/Documentation/Rapports-publics/Document-preparatoire-au-debat-sans-vote-sur-l-immigration-professionnelle-et-etudiante (accessed beginning of January 2016). 237 For more information see: http://startupchile.org/ 238 For more information see: http://creative.businessfrance.fr/ 239 For an informal overview see Varza, Roxanne (2016)” France opens its door to foreign entrepreneurs”, http://techbaguette.com/2016/03/02/france-foreigners/ (accessed 18 March 2016)




http://www.immigration.interieur.gouv.fr/Info-ressources/Documentation/Rapports-publics/Document-preparatoire-au-debat-sans-vote-sur-l-immigration-professionnelle-et-etudiante


http://startupchile.org/

http://creative.businessfrance.fr/

http://techbaguette.com/2016/03/02/france-foreigners/


121

this context that the goal is to continue with the programme and expand it to other French Tech

Metropoles throughout France240.

Taking into account the components of the scheme, the aim is clearly to attract early stage start-ups,

provide them with funds to scale up their business and preferably keep them in France afterwards.

The issues regarding a residence permit are supposed to be minimized, the entrepreneurs receive a

dedicated support in a dynamic ecosystem and are connected with different partners from the

beginning. The programme is highly selective and accepted only 3% of all applications. Only a small

number of entrepreneurs can be covered by this scheme. However, the seemingly low acceptance

rate is similar to the regular acceptance rate in private incubation programmes and indicates indeed a

thorough selection process.

As the French Tech Ticket was introduced fairly recently, it has not been evaluated yet. Several issues

remain open that could be the subject of a future evaluation:

■ The reasoning for the selection criteria, including having a maximum of one French team member

and the need to have a video application is unclear. Further the time to process the application (3-

4 months) seems very long, also in comparison to the residence permit for skills and talents (2-3

months). It would be beneficial for entrepreneurs, if the decision making time was shortened,

enabling them to move forward faster with their start-up.

■ The length of the programme is rather short (6 months) and although an extension after a new

application procedure is possible, it seems unlikely since the application period is long (3-4

months) and a successful entrepreneur/team would not need the same services again. It remains

unclear whether after a successful extension of the permit other services are included in the

package.

■ Although the scheme aims at easing the procedure for a residence permit, it does not seem to

facilitate the permit issuance for the entrepreneurs. The scheme description includes a mention of

a fast-track procedure to obtain a French residence permit’. There is no further description of this

fast track procedure. The selected entrepreneurs must obtain a valid residence permit within three

weeks of selection. The residence permit must be valid a minimum of one year. The selection

criteria for the French tech ticket specifically mention that the selected entrepreneur will not be

issued a residence permit automatically. The facilitation aspect of the scheme is therefore not

obvious. A clarification of the exact ‘benefit’ of the scheme for obtaining a residence permit is

necessary.

■ It is unclear whether the entrepreneurs are eligible for family reunification within the French Tech

Ticket (as they are when holding a residence permit for skills and talents). Also the ‘talent

passport’ entails provisions on family reunification, offering the same rights to family members as

under the residence permit for skills and talents241.

■ The close cooperation with incubators and entrepreneurs in both, the selection of the candidates

and the programme itself is a strong positive aspect of the programme. For the involved incubators

being part of the programme is regarded as prestigious, with low cost for them. The incubators are

reimbursed a small amount for their participation242. However, the setup of the collaboration

between incubators and the government lacks transparency. It is unclear how the collaboration

with the government and incubators looks in detail, but it can be assumed that incubators investing

services and money close deals similar to their usual terms and conditions. It is too early to say

whether there is a business case for incubators to be involved on a long term.

240 Goube, Josephine (2015), “French Startup Visa: 1,400 foreign entrepreneurs knocking on the doors of Paris”, http://blog.migreat.com/2015/09/21/french-startup-visa-1400-foreign-entrepreneurs-knocking-on-the-doors-of-paris/?preview_id=3622 (accessed 26 February 2016) 241 Legifrance (2016), “LOI n° 2016-274 du 7 mars 2016 relative au droit des étrangers en France (Law No. 2016-274 of 7 March 2016 on the right of foreigners in France)”, https://www.legifrance.gouv.fr/affichTexte.do;jsessionid=579834932897A953D49D0B631497EE84.tpdila22v_2?cidTexte=JORFTEXT000032164264&categorieLien=id (accessed 18 March 2016). 242 Expert input provided by Lenard Koschwitz






122

The programme can finally be evaluated as a good example of collaboration between public and

private sectors and as a good soft landing programme for foreign entrepreneurs in France. However, it

remains to be evaluated how effective the scheme is to retain talented entrepreneurs. In line with this,

uncertainties concerning the ‘fast track procedure for a residence permit’ and a possible change of

status of entrepreneurs should be clarified. It also remains open whether the entrepreneurs are able to

locate their company outside of Paris after (or during) their participation within the scheme. Finally, it

seems detached from the ‘talent passport’ scheme which is supposed to be implemented in November

2016. It is unclear whether and how both might be harmonised. This finally depends on the content of

the new talent passport and the announced development of the French Tech Ticket, including an

expansion to 200 entrepreneurs and the implementation of further hubs outside of Paris243.

References

■ BlaBlaCar (2016), “BlaBlaCar at a Glance” https://www.blablacar.co.uk/blog/blablacar-about


■ Bloch, François (2016), “Rise of entrepreneurship in France”,






■ Consulate General of France in Washington (2016) “The “Skills and Talent” Card visa (Carte

Compétences & Talents)”, http://www.consulfrance-washington.org/spip.php?article519 (accessed

29 February 2016)

■ Deezer (2016), “About”, http://www.deezer.com/company/about (accessed 29 February 2016)

■ EMN (2014), “Ad-hoc query 565. Requirements for Operating a Business Activity”, European

Migration Network

■ European Commission (2015), “Report of the meeting on a support scheme for non-EU

entrepreneurial innovators”, Directorate General for Research and Innovation (unpublished).

■ French Tech ticket (2016), “Get your ticket to Paris and launch your startup in a unique tech

ecosystem”, http://www.frenchtechticket.paris/ (accessed 26 February 2016)

■ French Tech Ticket (2015), “Rules of the pilot version of the Paris French Tech Ticket”.

■ French Tech Ticket (2015), “Programme benefits“, http://www.frenchtechticket.paris/1/about


■ GEM (2013), “High entrepreneurial desires but very low perception of entrepreneurial

competences”, http://gemconsortium.org/country-profile/62 (accessed 29 February 2016)

■ Goube, Josephine (2015), “French Startup Visa: 1,400 foreign entrepreneurs knocking on the

doors of Paris”, Migreat, http://blog.migreat.com/2015/09/21/french-startup-visa-1400-foreign-

entrepreneurs-knocking-on-the-doors-of-paris/?preview_id=3622 (accessed 26 February 2016)

■ Goube, Josephine (2015), “Worldwide start-up visa policies compared”, Migreat.

■ La French Tech (2016), “What is “La French Tech”?”, http://en.lafrenchtech.com/what-is-la-french-

tech/ (accessed 29 February 2016)

■ Legifrance (2016), “LOI n° 2016-274 du 7 mars 2016 relative au droit des étrangers en France

(Law No. 2016-274 of 7 March 2016 on the right of foreigners in France)”,

https://www.legifrance.gouv.fr/affichTexte.do;jsessionid=579834932897A953D49D0B631497EE84

.tpdila22v_2?cidTexte=JORFTEXT000032164264&categorieLien=id (accessed 18 March 2016).

243 Varza, Roxanne (2016)” France opens its door to foreign entrepreneurs”, http://techbaguette.com/2016/03/02/france-foreigners/ (accessed 18 March 2016)






http://www.frenchtechticket.paris/1/about










123

■ Migreat (2015),”Which French visas can also be used as residence permits?”,

https://www.migreat.com/en/what-french-visa-is-valid-as-a-residence-permit-a139 (accessed 29

February 2016)

■ Migreat (2015), “What are the French work visa requirements?”, https://www.migreat.com/en/what-

do-i-need-to-apply-for-a-work-visa-s145 (accessed 29 February 2016)

■ Ministère de l'Intérieur (Ministry of the Interior, 2016) “Loi 7 mars 2016 relative au droit des

étrangers en France (The March 7 Law on the Rights of Foreigners in France)”

http://www.immigration.interieur.gouv.fr/Immigration/Loi-du-7-mars-2016-relative-au-droit-des-

etrangers-en-France (accessed 18 March 2016)

■ Ministère de l’intérieur (Ministry of the Interior, 2013), “Document préparatoire au débat sans vote

sur l’immigration professionnelle et étudiante (Preparatory document for a discussion without

voting on professional and student immigration)”, http://www.immigration.interieur.gouv.fr/Info-

ressources/Documentation/Rapports-publics/Document-preparatoire-au-debat-sans-vote-sur-l-

immigration-professionnelle-et-etudiante (accessed beginning of January 2016).

■ The Government of France (2016), “French Tech Ticket. Paris, the capital of start-ups!”,

http://www.gouvernement.fr/en/french-tech-ticket (accessed 29 February 2016).

■ The World Bank (2016), “Ease of doing business in France”,

http://www.doingbusiness.org/data/exploreeconomies/france (accessed 29 February 2016).

■ Varza, Roxanne (2016)” France opens its door to foreign entrepreneurs”,

http://techbaguette.com/2016/03/02/france-foreigners/ (accessed 18 March 2016).

■ 1000start-ups (2016), “Welcome to the world’s largest digital business incubator”,

http://1000startups.fr/?lang=en (accessed 29 February 2016)

https://www.migreat.com/en/what-french-visa-is-valid-as-a-residence-permit-a139









http://www.doingbusiness.org/data/exploreeconomies/france




124

Annex 3 Country Fiche: Ireland

Key Messages:

In 2012 Ireland introduced the ‘Start-up Entrepreneur Programme (STEP)’ to attract high

potential start-ups in the field of information and communication technology (ICT).

Through STEP the government aims to tap into the entrepreneurial pool of the migrant

population that is already residing in Ireland as well as to attract potential entrepreneurs from

abroad.

The overall business environment in Ireland seems favourable for entrepreneurship.

The Irish government has issued a national strategy for entrepreneurship in 2014 including

support measures and policy initiatives to attract talented entrepreneurs intending to create

global companies.

STEP was first revised in 2014, which resulted in the introduction of a pre-track of STEP.

This is a 12 month visa for start-ups that attend incubators or innovation boot camps in order

to prepare a STEP application.

Entrepreneurs qualify for STEP, if they apply with an innovative business idea or a high

potential start-up and have a secured funding of €50,000.

The applications are evaluated by an application committee chaired by the Department of

Justice and Equality in Ireland.

After a successful application, entrepreneurs receive a residence permit for two years, which

can be renewed for another three years.

Since its introduction on 1 January 2012 until 1 January 2015 there have been 52

applications for STEP and 30 were approved.

The Irish Government is aiming at constant improvement of the programme. It was reviewed

a second time in May 2015. The results of this revision are to be published yet.


125


In 2012 Ireland introduced the ‘Start-up Entrepreneur Programme (STEP)’ to attract third country

nationals (TCN) who have a business idea for a high potential start-up. The aim of the Programme is

to “stimulate productive investment in Ireland” by attracting high potential start-ups in the field of

information and communication technology (ICT)244.

The overall business environment in Ireland seems to be favourable for entrepreneurship. According

to the Global Entrepreneurship Monitor, 15% of new businesses in Ireland are focused on medium to

high technology sectors245. Entrepreneurs are supported through development agencies of the

government, namely Enterprise Ireland that helps high-potential start-up enterprises to ‘start, grow,

innovate and win export sales on global markets’246. Further Ireland has a supportive entrepreneurial

culture through positive media coverage on entrepreneurs247. Ireland ranks 17th on the World Bank

‘ease of doing business index’ (out of 189 economies), which is measured through the ease of starting

a business, registering a property, getting credit, protecting minority investors or trading across

borders248. In 2014 Ireland published its ‘National Policy Statement on Entrepreneurship’, being the

first European government to publish a comprehensive national strategy for entrepreneurship249. The

three main goals of the national strategy are: i) increasing the number of start-ups by 25% (3,000

more start-ups each year); ii) increasing the survival rate of start-ups in the first five years by 25%

(1,800 more survivors each year) and iii) improving the capacity of start-ups to grow to scale by

25%250.According to the Minister for Jobs, Enterprise and Innovation Ireland seeks “to create a vibrant

environment for start-ups” across the country as start-ups in their first five years of existence

contribute two-thirds of all new jobs in Ireland251.

The STEP was introduced by the Department of Justice and Equality in conjunction with other relevant

departments, in particular the Department of Jobs, Enterprise and Innovation on 1 January 2012.

Through the programme the government aims to tap into the entrepreneurial pool of the migrant

population that is already residing in Ireland as well as to attract potential entrepreneurs from abroad.

The rate at which people aspire to create a business in Ireland has been at 14.7% in 2013 (compared

to 8% in 2012). Early stage entrepreneurship was higher among migrants (11%) compared to the non-

migrant population (8.8%) in 2013. However, in 2013 the overall share of migrant entrepreneurs

(8.5%) in Ireland was lower compared to the non-migrant entrepreneurs (13.4%), which could lead to

the conclusion that business run by migrant entrepreneurs have a lower survival rate252. In the national

strategy for entrepreneurship the Irish government puts particular emphasis on support measures and

policy initiatives to “attract to Ireland talented entrepreneurs intending to create global companies”253.

STEP was first revised in 2014, which resulted in the introduction of a pre-track of STEP, which is a

244 INIS (2015), “Start-up Entrepreneur Programme Guidelines 2015”, Irish Naturalization and Immigration Service 245 Fitzsimons, Paula; O’Gorman, Colm (2015), “Entrepreneurship in Ireland 2014”, GEM, p. 51. 246 https://enterprise-ireland.com/en/ (accessed 19 February 2016) 247 Fitzsimons, Paula; O’Gorman, Colm (2015), “Entrepreneurship in Ireland 2014”, GEM, p. 22. 248 The World Bank (2016), “Ease of doing business in Ireland”, http://www.doingbusiness.org/data/exploreeconomies/ireland#close (accessed 23 February 2016). 249 DJEI (2014), “Entrepreneurship”, https://www.djei.ie/en/What-We-Do/Business-Sectoral-Initiatives/Entrepreneurship-/ (accessed 22 February 2016) 250 DJEI (2014), “National Policy Statement on Entrepreneurship in Ireland 2014”, Department of Jobs, Enterprise, and Innovation, Ireland. 251 Fitzsimons, Paula; O’Gorman, Colm (2015), “Entrepreneurship in Ireland 2014”, GEM, p. 17. 252 GEM (2013), “Country Profile Ireland”, http://gemconsortium.org/country-profile/72 (accessed 23 February 2016) 253 DJEI (2014), “National Policy Statement on Entrepreneurship in Ireland 2014”, Department of Jobs, Enterprise, and Innovation, Ireland.

https://enterprise-ireland.com/en/

http://www.doingbusiness.org/data/exploreeconomies/ireland#close

https://www.djei.ie/en/What-We-Do/Business-Sectoral-Initiatives/Entrepreneurship-/




126

12-month visa for start-ups that attend incubators or innovation boot camps in Ireland to prepare a

STEP application254.

There are two other schemes that aim to attract third country nationals for business purposes255:

■ the Immigrant Investment Programme (IIP) aimed at attracting investors with a starting capital of

EUR 500,00;

■ the Business Permission Scheme for businesses with a minimum capital of EUR 300,000.

Since the Immigrant Investment Programme does not particularly attract high-impact start-ups and

innovative entrepreneurs, but investors it is not in the scope of this report.

The Business Permission Scheme has been suspended on 16 March 2016 as part of an ongoing

review of migration schemes in Ireland256. For comparative reasons the scheme will be included in this

fiche.


The specific requirements for STEP and the business permission scheme are described in detail in the

following sections.

Admission criteria


Start-up Entrepreneur Programme (STEP)

TCN may qualify for the STEP, if they (along with other conditions outlined below):

■ apply with an innovative business idea or a high potential start-up,

■ have a secured funding of €50,000 (which was lowered from initially €75,000 in 2014). If the start-

up has more than one owner, each applicant is required to demonstrate access to €30,000

funding.

The start-ups are supported in acquiring residency in Ireland for the purposes of developing their

business. The programme is focused on innovative start-ups mainly from the tech industry (ICT). The

focus is rather a niche market and the programme and is not intended for retail, personal services,

catering or other similar businesses. Entrepreneurs who are eligible for the programme are granted a

residence and work permit simultaneously257.

The Irish Government has specifically defined the high potential start-ups that are eligible for STEP.

These are start-ups that are258:

■ Introducing a new or innovative product or service to international markets;

■ Capable of creating 10 jobs in Ireland and realising €1 million in sales within three to four years of

starting up;

■ Led by an experienced management team;

■ Headquartered and controlled in Ireland;

254 INIS (2014), “Minister Shatter announces targeted changes in the Start-up Entrepreneur Programme”, http://www.inis.gov.ie/en/INIS/Pages/Minister%20Shatter%20announces%20targeted%20changes%20in%20the%20Start-up%20Entrepreneur%20Programme (accessed 22 February 2016) 255 For further information on the schemes, see: Gusciute, Egle; Quinn, Emma and Barrett, Alan (2015), “Business Migration to Ireland”, Research Series, No. 43,The Economic and Social Research Institute (ESRI) 256 INIS (2016), “Business Permission”, http://www.inis.gov.ie/en/INIS/Pages/WP09000012 (accessed 22 April 2016) 257 INIS (2015), “Start-up Entrepreneur Programme Guidelines 2015”, Irish Naturalization and Immigration Service 258 Ibid, pp. 4-5

http://www.inis.gov.ie/en/INIS/Pages/Minister%20Shatter%20announces%20targeted%20changes%20in%20the%20Start-up%20Entrepreneur%20Programme


http://www.inis.gov.ie/en/INIS/Pages/WP09000012


127

■ Less than six years old.

How the experience of the management team is measured in the applications process is not

elaborated in the application guidelines. No minimum qualifications level (education or professional

skills) are specified. However, information about work experience and educational background has to

be included in the application259.

Further conditions include:

■ A statement of character from police authorities of each country in which the entrepreneur resided

for more than six months during ten years prior to the application;

■ A statement affirming that the applicants have no criminal convictions (only successful applicants);

■ Private medical insurance for the duration of the residence under the programme.

12 month immigration permission

The 12 month immigration permission is led by Enterprise Ireland helps future high potential start-ups

to enter the market and develop the business through a residence permit that is issued for one year.

The permit enables these potential entrepreneurs to participate in start-up boot camps across the

country to prepare their application for STEP. Foreign students with an Irish degree in STEM (Science,

Technology, Engineering, and Mathematics) are also eligible for the 12 month immigration permission.

Business Permission Scheme

Before it’s recent suspension, the Business Permission Scheme enabled third country nationals to

establish a business mainly in retail, personal services, catering or similar businesses. In contrast to

STEP it had no focus on innovative entrepreneurs. However, applicants who were not successful in

their application for STEP were referred to this scheme for assessment. The business permission was

issued by the Minister for Justice and Equality260.

Support scheme

The application for the STEP is not connected to an ecosystem or other support for the scale up of the

company. However, the 12 month immigration permission scheme is meant as a support scheme for

early stage high potential start-ups to apply for STEP and it is connected to support from an incubator.

Although the issuance of the residence permit under STEP is not directly connected to a support

scheme from a start-up ecosystem, the high potential start-ups under the programme have the

possibility to benefit from support provided by Enterprise Ireland. Enterprise Ireland has developed the

‘New Frontiers programme’, which is a development programme for innovative, early-stage start-ups.

The programme is based in 14 campus incubation centres across the country, which help high

potential start-ups to scale up their business. It targets entrepreneurs and and early stage start-up

companies located across Ireland. The programme does not only focus on entrepreneurs from tech

sectors such as ICT, but is also open for entrepreneurs in other sectors including: food & consumer

products, engineering & electronics, medical devices, biotechnology, pharma, digital media,

cleantech/renewable energy and eligible internationally traded services261. Start-ups apply via an

online application form. The first step includes registering the interest in the programme with a specific

incubator (Institute of Technology) that the applicant wants to attend. In a second step the programme

manager contacts the applicant and discusses the business idea. If there is an agreement, the

259 Ibid 260 Gusciute, Egle; Quinn, Emma and Barrett, Alan (2015), “Business Migration to Ireland”, Research Series, No. 43,The Economic and Social Research Institute (ESRI) 261 For further information see: https://www.enterprise-ireland.com/en/Start-a-Business-in-Ireland/Supports-for-High-Potential-Start-Ups/New-Frontiers-Entrepreneur-Development-Programme.html (accessed 24 February 2016)

https://www.enterprise-ireland.com/en/Start-a-Business-in-Ireland/Supports-for-High-Potential-Start-Ups/New-Frontiers-Entrepreneur-Development-Programme.html



128

applicant receives the appropriate application forms262. Non-Irish entrepreneurs are eligible to apply

for the programme, if they fulfil the following conditions263:

■ The start-up is in the process of introducing a new or innovative product or service to international

markets;

■ The start-up is involved in manufacturing, technology or other services that are internationally

traded

■ The start-up is capable of creating 10 jobs in Ireland and reaching €1 million in sales 3-4 years

after set-up

■ The start-up is led by an experienced management team who have a residence permit for Ireland

(with reference to the start-up entrepreneur visa).

■ The start-up must be headquartered an controlled in Ireland, meaning that at least one of the

founders must be present in Ireland264.

The programme is three-phased, including testing the business idea, business planning and business

development. In the first phase the market potential of the business idea is validated in a 8-10 week

period through workshops and networking. At the end of phase one a go/no-go decision is made on

the particular start-up. Start-ups eligible for the second phase go on to business planning. This is the

main phase and includes key benefits, such as full-time incubation support for 6 months, a €15,000

tax-free grant, peer to peer networking, web hosting and support from Amazon and access to

Microsoft’s BizSpark platform for software developers. After the second phase, start-ups are guided to

the most relevant government support for their particular stage of development as well as ongoing

support from the programme for 2-3 months265.

The accelerator ‘Start-up Ireland’ is also supporting early stage start-ups by providing them with

necessary services, resources and connections to key stakeholders, such as the government,

investors, incubators and other start-ups to accelerate their growth266. The support is open for start-

ups that “have the potential to best support and grow the Irish startup community”. Start-up Ireland

specifically defines start-ups as “high impact businesses that have the potential to grow rapidly

internationally thereby creating significant jobs and innovation in Ireland”267. Start-ups apply via an

online form268 and their application is reviewed by Start-up Ireland269. Start-up Ireland organises each

year a ‘startup gathering’ that is supported by the Department of Jobs, Enterprise and Innovation and

is part of the ‘Action Plan for Jobs’270 published by the Irish Government.

Generally, the applicants under STEP are expected to already have a connection to a start-up

ecosystem and therefore this is not part of the programme. The additional 12 month immigration

262 See http://www.newfrontiers.ie/apply (accessed 22 April 2016) 263 https://enterprise-ireland.com/en/Start-a-Business-in-Ireland/Startups-from-Outside-Ireland/Are-you-Eligible-/Are-you-eligible.html (accessed 22 April 2016) 264 It is important to note that the criteria for start-ups from Ireland is less restrictive on the turnover (€500,000) and the number of jobs created (more than 5) in 3-5 years. 265 New Frontiers (2016), “About New Frontiers”, http://www.newfrontiers.ie/about (accessed 22 April 2016) 266 For further information see: http://startupireland.ie/ (accessed 24 February 2016) 267 Start-up Ireland: http://startupireland.ie/about/ (accessed 22 April 2016) 268 Accessing the form was not possible at the time of writing the country fiche. The last unsuccessful attempt to access the form was made on 22 April 2016. 269 It is not specified whether the board of Start-up Ireland is reviewing the applications or whether they are reviewed by the wider network of Start-up Ireland, including startups and their supporters in Research Centres, Tech Transfer Offices, Incubation/CoWorking Space Providers, Commercial Attaches at Embassies, Professional Services Providers (Accountants, Lawyers, Patent Agents), Innovation Managers at large Corporates, Investors, State Enterprise Support Agencies, Country Network Associations/Chambers, Mentor/Angel Investors and the Diaspora. 270 For further information see: https://www.djei.ie/en/News-And-Events/Department-News/2016/January/18012016.html (accessed 24 February 2016)

http://www.newfrontiers.ie/apply

https://enterprise-ireland.com/en/Start-a-Business-in-Ireland/Startups-from-Outside-Ireland/Are-you-Eligible-/Are-you-eligible.html

https://enterprise-ireland.com/en/Start-a-Business-in-Ireland/Startups-from-Outside-Ireland/Are-you-Eligible-/Are-you-eligible.html

http://www.newfrontiers.ie/about

http://startupireland.ie/

http://startupireland.ie/about/

https://www.djei.ie/en/News-And-Events/Department-News/2016/January/18012016.html



129

permission introduced in 2014 is the preparatory permit connected with a support scheme to enable

early stage high potential start-ups to scale up their business in the Irish start-up ecosystem.

There was no support in place for the business permission scheme.


The applicants submit all relevant documents per post to the Investment and Entrepreneur Unit of the

Irish Naturalisation and Immigration Service. The applications are evaluated by an application

committee chaired by the Department of Justice and Equality and including experts from Enterprise

Ireland that has a dedicated team focused on high potential start-ups from abroad271. Further

members of the committee are experts (not immigration officials) 272 from the Department of Jobs,

Enterprise and Innovation; the Irish Development Agency; the Department of Foreign Affairs and

Trade and the Department of Finance. It is noteworthy that there seem to be no persons from the

industry (e.g. ICT) on the application committee, although it is possible that individual members have

prior business experience. The committee makes recommendations to the Minister for Justice and

Equality on applications that should be accepted under the programme273. The committee evaluates

whether the criteria, such as the financial requirements are met, but especially if the start-up is

innovative and if it has export potential. The following documents are required by the application

committee274:

■ most recent audited accounts (if the business is relocating to Ireland);

■ a comprehensive business plan for the innovation start-up proposal (completed in the template

issued by INIS);

■ Evidence of funding through either own resources, business loan, Business Angel/Venture Capital

funding or a grant from an Irish State Agency.

The business plan has to be completed in the Sample Business Plan template issued by INIS. The

template is a 19 page document including detailed instructions on what the business plan has to

entail. The plan has 8 core chapters:

1. company description, including information on shareholders, products, objectives and a SWOT

analysis

2. Market analysis, including a description of the target market and the trends

3. Marketing / sales strategy

4. Research and Development, including planned or pending patents, and product developments

5. Staffing and operations, including a management organisation chart

6. Financial projections, including key projections, and cash flow projections

7. A sales pipeline, and

8. Funding requirements275.

The application committee convenes four times per year (February, May, September and December)

to access applications. Hence, the procedure length is three to four months on average. The

271 DJEI (2014), “National Policy Statement on Entrepreneurship in Ireland 2014”, Department of Jobs, Enterprise, and Innovation, Ireland. 272 European Commission (2015), “Report of the meeting on a support scheme for non-EU entrepreneurial innovators”, Directorate General for Research and Innovation 273 Gusciute, Egle; Quinn, Emma and Barrett, Alan (2015), “Business Migration to Ireland”, Research Series, No. 43,The Economic and Social Research Institute (ESRI) 274 INIS (2015), “Start-up Entrepreneur Programme Guidelines 2015”, Irish Naturalization and Immigration Service 275 The sample business plan is included in annex 1.


130

application fee is €350 and is non-refundable276. The final decision is made by the Minister for Justice

and Equality277.

After a successful application, entrepreneurs receive a residence permit for two years, which can be

renewed for another three years. In order to qualify for a renewal the following conditions are

required278:

■ The start-up has remained in place;

■ Assessment by the Evaluation Committee of the success or viability of the investment;

■ Entrepreneurs maintain good character;

■ Entrepreneurs maintain the private medical insurance and not having recourse to publicly funded

welfare programmes.

The final decision on the renewal is made by the Minister for Justice and Equality as well.

After five years of residence under STEP in Ireland the entrepreneurs are eligible for permanent

residence. The residence permit under STEP may be renewed in 5 year instalments after the initial

renewal.

12 month immigration permission scheme

In order to apply for the 12 month immigration permission scheme, early stage high potential start-ups

are required to first ensure a place on an accelerator. The accelerator is then supposed to support the

entrepreneurs with the visa application. The visa has been granted so far in an ‘informal way’.

According to Enterprise Ireland the Irish Government has issued visas for entrepreneurs that enable

them to attend start up accelerators and bootcamps in Ireland consistently “even in the absence of a

formal system”279. However, the system for granting the 12 month immigration permission has been

formalised in 2014280. The new 12 month immigration permission scheme allows entrepreneurs with a

place on a suitable281 acceleration programme to stay for 12 months in Ireland and scale up their

business, even if the programme’s duration is only 3 months. Subsequently, the entrepreneurs have

the possibility to apply for a permit under STEP after the initial 12 months under the 12 month

immigration permission scheme have passed. Entreprise Ireland explains that an entrepreneur “could

come to Ireland, attend an accelerator, stay on in Ireland to grow the business and raise funds, and

once [the entrepreneur] had raised enough funds could apply for the Start up Entrepreneur visa”282.

Business permission scheme

The application process for the business permission scheme was submitted to the Business

Permission Unit, Residence Division of INIS. Eligible business had to fulfil the following criteria283:

■ A minimum investment of €300,000.

■ Create employment for at least two EEA nationals for a new project or, at the very least, maintain

employment in an existing business.

276 Gusciute, Egle; Quinn, Emma and Barrett, Alan (2015), “Business Migration to Ireland”, Research Series, No. 43,The Economic and Social Research Institute (ESRI) 277 INIS (2015), “Start-up Entrepreneur Programme Guidelines 2015”, Irish Naturalization and Immigration Service 278 ibid 279 Enterprise Ireland (2015), “Visas and Residency Permission”, p. 2 280 INIS (2014), “Minister Shatter announces targeted changes in the Start-up Entrepreneur Programme”, http://www.inis.gov.ie/en/INIS/Pages/Minister%20Shatter%20announces%20targeted%20changes%20in%20the%20Start-up%20Entrepreneur%20Programme (accessed 22 April 2016) 281 Note: It is not defined what a suitable acceleration programme is. 282 Enterprise Ireland (2015), “Visas and Residency Permission”, p. 2 283 Gusciute, Egle; Quinn, Emma and Barrett, Alan (2015), “Business Migration to Ireland”, Research Series, No. 43,The Economic and Social Research Institute (ESRI)




131

■ Business had to provide the applicant with sufficient income to maintain themselves and any

dependants without resorting to social security or paid employment which would require an

employment permit.

■ A statement of character from the police authorities of each country in which he/she has resided

for more than six months during the ten-year period prior to making an application and references

from former employers.

■ A detailed proof of the entrepreneurial skills.

No specific minimum level of educational achievement/professional skills were required for a Business

Permission, but applicants had to provide proof of their own skill level in establishing a business

including, where applicable, academic and professional qualifications.

The scheme was also open for Writers, Artists and Crafts persons. They did not have to fulfil the

financial or employment requirements; however they had to demonstrate that they are internationally

renowned in their chosen field and in a position to fully support themselves from their chosen craft

without recourse to alternative employment and/or social assistance. Successful applicants were

issued a permission for business activity for 12 months. It could be renewed for another 12 months, if

the business satisfied all relevant criteria for the initial permit284.


Successful applicants are given a multiple-entry visa for the period of two years to facilitate business

travel285.

There is no facilitation of permanent residence or citizenship for STEP permit holders. The

entrepreneurs have the possibility to apply for permanent residence after only after five years under

programme. These conditions also applied for the business permission scheme.

According to the application guidelines for STEP, the programme does not provide a fast track path to

citizenship. The STEP permit holders may apply for the citizenship according the criteria set out in the

Irish Nationality and Citizenship Acts286. This was also the case for the business permission scheme.

However, since the permit was issued only for 1 year (and also renewed only for 1 year), it might have

been harder to accumulate the residence required for either long term residence or citizenship,

compared to STEP287.

Family reunification is possible for the spouse/ partner and children under the age of 18. The

application is submitted to the Irish Naturalisation and Immigration service and the processing time is

the same as for the main applicant. The duration is the same duration as the permit of the

entrepreneur. The residence permit of the family members includes the right to reside and work, study

or start a business in Ireland288. The same applied for the business permission scheme. Family

reunification was possible, as long as the entrepreneurs could provide sufficient income to support the

family members as they had no possibility to access social welfare (neither the entrepreneurs, nor

their family members). The visa for family members had the same duration as the one from the main

applicant.

The following table provides a summary of the requirements for the STEP, the 12-month immigration

permission scheme, and the business permission scheme.

284 ibid 285 Ireland is not part of the Schengen Area and thus STEP holders must apply for a Schengen Visa to enter other EU Member States. 286 INIS (2015), “Start-up Entrepreneur Programme Guidelines 2015”, Irish Naturalisation and Immigration Service 287 Gusciute, Egle; Quinn, Emma and Barrett, Alan (2015), “Business Migration to Ireland”, Research Series, No. 43,The Economic and Social Research Institute (ESRI) 288 INIS (2015), “Start-up Entrepreneur Programme Guidelines 2015”, Irish Naturalisation and Immigration Service


132

Table A3.1 STEP and the 12-month immigration permission scheme compared

Overview STEP 12-month

immigration permission

Business permission Scheme

Admission criteria

Innovative business

model

Minimum

investment €50,000

Job creation

STEM degree from

Ireland

Connection to an

incubator

Preparation for STEP

A minimum investment of €300,000.

employment for at least two EEA

nationals

sufficient income to maintain

themselves and any dependants

A statement of character

A detailed proof of the

entrepreneurial skills.

Support scheme None Access to incubator None

Duration of procedure

(max.) 3-4 months

3-4 months N/A

Application fee €350 N/A N/A

Duration of permit

(max.) Two years

One year One Year


for three years

No Yes

for one year

Change of status

possible Yes

Yes No

Facilitation of

permanent residence No

No No

Family reunification

possible Yes

N/A Yes

Duration of permit Same as for permit

holder

N/A Same as for permit holder

Rights of family

members

Full access to the

labour market

N/A N/A


According to the global entrepreneurship monitor a total of 20,400 persons started a new business in

Ireland in 2014289. In 2014 a total of 26 business permission were granted in Ireland, whereby only 10

were new permits and 16 were renewed290. According to Enterprise Ireland, 102 new high potential

start-ups have been developed through their support programme in 2014291.

The statistical data concerning STEP is limited. The government provides general information about

the number of start-ups, however other information such as the origin of the entrepreneurs, the sectors

where the start-ups are created and more detailed information about the start-ups themselves is not

available as of now. The number of start-ups attracted through STEP is low. Since its introduction on 1

January 2012 until 1 January 2015 there have been 52 applications for the STEP, out of which 30

(applicants/start-ups) were approved, 18 rejected, 2 had withdrawn their application and 2 were under

289 Fitzsimons, Paula; O’Gorman, Colm (2015), “Entrepreneurship in Ireland 2014”, GEM, p. 20. 290 Gusciute, Egle; Quinn, Emma and Barrett, Alan (2015), “Business Migration to Ireland”, Research Series, No. 43,The Economic and Social Research Institute (ESRI) 291 Enterprise Ireland (2014), “The high potential start up class of 2014”, p. 2.


133

consideration292. According to a report issued by Migreat in 2015, until 2014 the start-ups under STEP

created 220 jobs in Ireland293.


STEP was evaluated in the first year after its introduction and the evaluation resulted in a number of

changes to the programme. The aim of the changes was to “improve its appeal to potential migrant

entrepreneurs”294. In March 2014 the government introduced a number of changes to the programme,

including295:

■ A reduced minimum investment from €75,000 to €50,000;

■ A 12 month immigration permission as a supporting measure to enable entrepreneurs to better

prepare for a STEP application;

■ Timeframe to create jobs has been removed, on the basis that for businesses can take longer to

get off the ground than others296

The revision showed the need for better links with the university sector. The universities can help to

create a network, through e.g. campus incubators297. This contributed to the decision to open the 12

month immigration permission also for foreign STEM graduates in Ireland. According to the

Government, this enables Ireland to not only attract new entrepreneurs to the country, but also to keep

highly educated graduates in Ireland, which in turn benefits the Irish economy in the long run298.

Nevertheless, information about the exact way the process is conducted is not available. Open

questions regarding the process include the decision making process, i.e. is the accelerator effectively

making the selection decision and the government bodies approve it; or is the decision made by the

same committee as within STEP? Regarding the participating accelerators, it is unclear what their

incentives are to participate in the 12 month immigration permission scheme (as a preparation towards

STEP). Do they all take equity stakes in participating firms, and if not, what are other incentives for

them to participate?

The success of the main STEP programme can be measured through the investments made in Ireland

through the scheme. According to the Government, the investment in Ireland amounted to over €6

million through projects realised through start-ups in STEP299. In total an investment of €40 million was

realised through projects in the Immigrant Investor Programme and STEP jointly300. However, the

numbers remain low in the first two years of issuance (30 start-ups). This might be connected with the

quite high administrative burden for applicants (see also section 2 in this report). The minimum

investment of €50,000 might still be a high threshold (although it was amended from €75,000

previously). Compared to other countries that do not demand a minimum investment (such as France)

this might have a negative effect on the application numbers. Concerning the 12 month immigration

scheme as a pre-track for STEP, the prerequisite to have an Irish STEM degree certain limits the

292 Gusciute, Egle; Quinn, Emma and Barrett, Alan (2015), “Business Migration to Ireland”, Research Series, No. 43,The Economic and Social Research Institute (ESRI) 293 Goube, Josephine (2015), “Worldwide start-up visa policies compared”, Migreat. 294 Department of Justice and Equality (2014), ‘Minister Shatter announces targeted changes in the Start-up Entrepreneur Programme’, Press Release. 295 Gusciute, Egle; Quinn, Emma and Barrett, Alan (2015), “Business Migration to Ireland”, Research Series, No. 43,The Economic and Social Research Institute (ESRI) 296 Goube, Josephine (2015), “Worldwide start-up visa policies compared”, Migreat. 297 European Commission (2015), “Report of the meeting on a support scheme for non-EU entrepreneurial innovators”, Directorate General for Research and Innovation 298 INIS (2015), “Start-up Entrepreneur Programme Guidelines 2015”, Irish Naturalization and Immigration

Service. 299 Goube, Josephine (2015), “Worldwide start-up visa policies compared”, Migreat. 300 There is no disaggregated data about the investments generated only through STEP as of now. See here: http://www.inis.gov.ie/en/INIS/Pages/Immigration%20in%20Ireland%20–%202014 (accessed 24 February 2016)

http://www.inis.gov.ie/en/INIS/Pages/Immigration%20in%20Ireland%20–%202014


134

number of eligible candidates. Also the lack of an extension before trying to apply for the main STEP

track might be unfavourable, as some companies might need more time to scale up.

As for the business permission scheme, the number of permits issued is low (as seen in section 2.4),

showing a rather low attractiveness of the scheme. In March 2016 INIS decided in March 2016 to

suspend and review the scheme. So far no results are known301.

Given the low number of entrepreneurs it can be questioned whether the country is as entrepreneur-

friendly as it seems at first glance. A possible explanation for the low number could be that the

perception of Ireland as a stable country have been altered for potential entrants due to the recent

developments in the economic crisis, where Ireland had to rely on an EU bailout. Generally it can be

stated that the information that is available on the scheme allow only rudimentary conclusions about

its success. Nevertheless, the Irish Government is aiming at constant improvement of the programme.

It was reviewed a second time in May 2015. However, there are no information available on the

second revision or its outcome so far302.

Generally Government goals remain strongly focused on making Ireland the top country in Europe for

high growth innovative start-ups and to develop a “strong entrepreneurial culture and effective

networks in the education system for commercialising ideas”303. The Government aims to enhance the

attractiveness of Ireland for foreign students and entrepreneurs alike, taking into account that

sometimes entrepreneurs are do not enter the country with a start-up, but develop their business while

they are in the country on another residence permit304. Finally the Irish Government has made

entrepreneurship its priority to ensure a “strong flow of high potential technology startups by immigrant

entrepreneurs”305.

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and Innovation, Ireland.https://www.djei.ie/en/News-And-Events/Department-

News/2016/January/18012016.html (accessed 24 February 2016)

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https://www.djei.ie/en/What-We-Do/Business-Sectoral-Initiatives/Entrepreneurship-/ (accessed 22

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Jobs, Enterprise, and Innovation, Ireland.

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Start-up Entrepreneur Programme’, Press Release.

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entrepreneurial innovators”, Directorate General for Research and Innovation (unpublished).

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https://www.enterprise-ireland.com/en/Start-a-Business-in-Ireland/Supports-for-High-Potential-

301 INIS (2016), “Business Permission”, http://www.inis.gov.ie/en/INIS/Pages/WP09000012 (accessed 22 April 2016) 302 Council of the European Union (2016) “Access to talent: a European visa/permit for start-up founders”, Presidency discussion paper for the lunch debate during the Informal meeting of Ministers responsible for research and innovation 27 January 2016, Amsterdam 303 DJEI (2014), “National Policy Statement on Entrepreneurship in Ireland 2014”, Department of Jobs, Enterprise, and Innovation, Ireland, p. 37 304 Goube, Josephine (2015), “Worldwide start-up visa policies compared”, Migreat. 305 DJEI (2014), “National Policy Statement on Entrepreneurship in Ireland 2014”, Department of Jobs, Enterprise, and Innovation, Ireland, p. 37







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http://www.inis.gov.ie/en/INIS/Pages/Minister%20Shatter%20announces%20targeted%20changes

%20in%20the%20Start-up%20Entrepreneur%20Programme (accessed 22 February 2016).

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http://www.inis.gov.ie/en/INIS/Pages/New%20Programmes%20for%20Investors%20and%20Entre

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136

Annex 4 Country Fiche: Italy

Key Messages:

Entrepreneurs can migrate to Italy through the specific places allocated in the Flows Decree, which is

issued on a yearly basis as autonomous workers.

On the initiative of the Ministry for Economic Development, Italy implemented a scheme to attract

innovative start-ups in 2014, called Startup Visa (for applications from outside the country) and Startup

Hub (for applications within the country).

The scheme was only one element of a wider package aimed at boosting the Italian economy at a time

of economic recession, initiated by the Monti cabinet and followed up by the Letta government.

Third-country nationals applying for a Startup Visa must fall within the quota allocated for ‘autonomous

workers’ within the Flows Decree. These ranged from 2000 to 2400 in the period 2012-16.

The start-up package offers financial and labour-related incentives to EU citizens and third-country

nationals’ innovative start-ups.

The target companies are start-ups with an innovative element, defined either by the spending on

research and development, or by the qualifications of the personnel, or by the patents.

The Startup Visa for application outside the country and the Startup Hub for conversions from within

the country offer a fast track and centralised scheme.

The applicant must show evidence of capital (€50,000) and a business plan, which is assessed by a

committee of experts.

The application can be made through incubators.

In the period 24th June 2014 - 31st December 2015 (18 months), the total number of applications

received for the Startup Visa was 61. From these, 40 received a positive response and the success

rate was 66%. Five applications were received and approved for conversion into Startup Visa, and the

success rate was 100%.

The majority of applicants and visa holders were from Russia and Ukraine, and were located in the

Norther region of Lombardy (Milan and Como).


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In Italy, migrant workers can have a permit for either subordinate or autonomous work (lavoro

subordinato and lavoro autonomo). ‘Autonomous worker’ is a broad definition, that covers third country

nationals intending to “exercising industrial, professional, artisan or commercial activity; or setting up

corporations or partnerships (societa’ di capitali o di persone) or getting access to corporate roles”306.

Entrepreneurs fall under the definition of autonomous workers.

The entry of autonomous workers is regulated by Flows Decrees, as it is the case for subordinate and

seasonal workers. The Flows Decree is issued on a yearly basis by the Ministry of Interior, in

consultation with the Ministry of Labour. The quotas include both first permits and conversions into the

autonomous work permit, from another permit.

Besides the quotas set by the Flows Decree, the Art. 27 of the Immigration Act (286/1988) envisages

the possibility of entry outside the quota regime, for a specific list of categories. Within this list,

seconded highly skilled and managers (letter a, Art. 27), university professors (letter c, Art. 27),

translators and interpreters (letter d, Art. 27), artists (letters l-o, Art. 27), and sportsmen (letter p, Art.

27) can perform autonomous work307. These categories, however, will not be analysed in detail as

they cover (freelance) professionals rather than entrepreneurs.

Third-country nationals already on the Italian territory can perform self-employment activities if

they possess one of the following permits: for subordinate work (if not seasonal), for family reasons,

for child assistance, for international protection, and for seeking employment308. When it comes to

renewal, these permits (except those for child assistance and international protection) must be

converted into permits for self-employment.

The yearly quotas set for first-time permits for autonomous workers since 2012 have ranged between

2000 and 2400 workers309. The category of autonomous workers includes the following professions:

entrepreneurs, professionals, renown artists and people with a role in non-cooperative companies;

however, over the years, some specifications to the definition of entrepreneur have been added

(underlined in the table below): a reference to the level of income was included, first, in general terms,

and, more recently, in terms of investment (€500,000) and job creation (3 job positions)310.

306 Immigration Act 286/1988, Art. 26,2. 307 Ministry of Interior website, http://www.integrazionemigranti.gov.it/Attualita/IlPunto/Documents/focus%20blu%20card.pdf (accessed 23 February 2016). 308 EMN (2014), National Report for Italy ‘Ad-Hoc Query on Requirements for operating a business activity’, http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/docs/ad-hoc-queries/economic-migration/565_emn_ahq_requirements_for_operating_business_activity_2014_en.pdf (accessed 23 February 2016). 309 With the exception of 2015, when no Flow Decree had been issued. 310 The EMN Study 2014, National Report for Italy ‘Admitting third country nationals for business purposes’, http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/docs/emn-studies/15a.italy_business_study_en_version.pdf reported that, at the time of drafting the report, the Ministry of Labour, in consultation with the Ministry of Interior was looking for criteria to make the identification of entrepreneurs more stringent, focusing on the benefits on the Italian economy in terms of jobs created and capital investment, pg. 37.

http://www.integrazionemigranti.gov.it/Attualita/IlPunto/Documents/focus%20blu%20card.pdf

http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/docs/ad-hoc-queries/economic-migration/565_emn_ahq_requirements_for_operating_business_activity_2014_en.pdf


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Table A4.1 Autonomous workers in the Flows Decrees, 2012-16

Year Amount Description

2012311 2000 Entrepreneurs carrying out activities of interest for the Italian economy

Others312

2013313 2300 Entrepreneurs carrying out activities of interest for the Italian economy

Others314

Foreign citizens involved in setting up innovative start-ups

2014315 2400 Entrepreneurs carrying out activities of interest for the Italian economy, which

supports or enhance the level of income

Others316


2016317 2400 Entrepreneurs carrying out activities of interest for the Italian economy, which

envisage the employment of the person’s resources amounted to not less than

500,000 Euros, deriving from legitimate sources and the creation of at least 3 new

job positions in the job market

Others318


The most relevant change in the Italian legislation concerning entrepreneurs is the introduction of the

Startup Visa for innovative start-up entrepreneurs. It was launched by the Ministry of Economic

Development on 24th June 2014. The Italian Startup Visa was one of the measures contained in

Growth Decree 2.0 (Decreto Crescita 2.0), issued on 18th October 2012 with the objective to boost the

national economy in a context of economic crisis by creating a facilitated regulatory framework for

innovative start-ups. This put in place incentives for business, and start-ups in particular319. Within this

set of innovative measures, the Startup Visa aimed at attracting foreign start-up entrepreneurs by

creating an entry scheme specifically targeted to them, which reduced the red-tape and facilitated the

access to incubators. Later in that year (23rd December 2014), the programme Startup Hub widened

the scope of the Startup Visa programme to third-country nationals already on the Italian territory,

allowing the change of status into the permit for autonomous work start-up, without leaving the

country.

311 Decree of the President of the Council of Ministers, 16th October 2012, http://www1.interno.gov.it/mininterno/export/sites/default/it/sezioni/sala_stampa/notizie/immigrazione/2012_11_23_decretoflussi2012.html (accessed 23 February 2016).

312 Professionals carrying out activities in regulated professions or listed by public administration registers,

People with a role in non-cooperative companies, Renown artists 313 Decree of the President of the Council of Ministers, 19th December 2013, http://www.lavoro.gov.it/Notizie/Pages/20131216_circolare-decreto-flussi.aspx (accessed 23 February 2016).


People with a role in non-cooperative companies, Renown artists 315 Decree of the President of the Council of Ministers, 11th December 2014, http://www.gazzettaufficiale.it/eli/id/2014/12/29/14A09970/sg (accessed 23 February 2016).


People with a role in non-cooperative companies, Renown artists 317 Decree of the President of the Council of Ministers, 14th December 2015, http://www.integrazionemigranti.gov.it/Attualita/News/Documents/Circolare%20congiunta%20DPCM%2014.12.2015.pdf (accessed 23 February 2016).


People with a role in non-cooperative companies, Renown artists 319 EMN Study (2014), National Report for Italy ‘Admitting third country nationals for business purposes’, http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/docs/emn-studies/15a.italy_business_study_en_version.pdf (accessed 23 February 2016).

http://www1.interno.gov.it/mininterno/export/sites/default/it/sezioni/sala_stampa/notizie/immigrazione/2012_11_23_decretoflussi2012.html


http://www.lavoro.gov.it/Notizie/Pages/20131216_circolare-decreto-flussi.aspx

http://www.gazzettaufficiale.it/eli/id/2014/12/29/14A09970/sg

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Admission criteria

The general requirements for issuing a permit for autonomous work (Art. 26 Immigration Act 286/1988)

include320:

■ proof of adequate resources, which may originate outside Italy, and which must be at least the

level set up by the law for the exemption from the healthcare charges (around €8,500.00)321,

■ meeting the requirements foreseen by the law for the activity to be performed,

■ registering to the professional orders or to the public registers,

■ providing a declaration not older than 3 months issued by the competent authority (depending on

the sector, the competent authority may be the professional order, the chamber of commerce, of

artisanship, of agriculture, or the relevant ministries) certifying that no obstacles to issuing the

permit exist and the regulatory requirements for the professions are met,

■ providing the Certificate of ‘No Impediment’ issued by the local police headquarter,

■ providing a certificate of adequate housing.

If the above requirements are met and if the quota is available, a residence permit for autonomous work is issued and has a 2-year validity. The permit is not limited to a geographical area and can be renewed. The newly introduced Start-up Visa aimed at creating a targeted entry scheme and a simplified procedure for innovative start-up entrepreneurs. A start-up is defined322 as a company that meets the following requirements:

■ shares are not traded on a regulated market,

■ is newly founded or has not been active for more than 4 years,

■ the headquarter is in Italy,

■ has revenues for up to €5 million per year ,

■ does not share profits,

■ aims at developing and marketing high-technology value services and products

■ is not the result of merging, split-up or transfer of companies or part of companies.

An innovative start-up is a start-up that meets at least one of the following requirements:

■ its expenditure on research and development is at least 15% of the greater of cost and total value

of production of the innovative start-up323;

■ at least a third of the total workforce has a PhD or is doing a PhD at an Italian or foreign university;

alternatively, at least two thirds of the total workforce hold a Master’s degree,

320 Immigration Act 286/1988, Art. 26 321 EMN 2014, Ad-Hoc Query on Requirements for operating a business activity, http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/docs/ad-hoc-queries/economic-migration/565_emn_ahq_requirements_for_operating_business_activity_2014_en.pdf (accessed 23 February 2016) Law 221 of 17 December 2012. 322 Law 221 of 17 December 2012, from the Italia Start-up Visa Guidelines, http://italiastart-upvisa.mise.gov.it/pdf/linee_guida_ISV.pdf, (accessed 23 February 2016). 323 The expenses for purchasing real estate do not fall under the research and development cost; the costs must result from the last approved financial statements.







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■ is the owner or the licensee of at least one industrial patent on an invention of industrial

biotechnology, a topography of semiconductor product or a new plant variety directly related to the

corporate purpose and the business activity.

The application can be lodged directly by the applicant or through a certified incubator. An incubator is defined as a company “that hosts start-ups and support business ideas deemed to offer the potential for a high economic return, but which are not yet ready to receive large-scale funding”324 and that “provides targeted incubation and acceleration services designed to support the creation or development of innovative start-ups”. To qualify as a certified incubator, a company must meet certain criteria, as defined by the Ministry of Economic Development325. These include providing adequate buildings and equipment and a technical and management structure, engaging in collaborative relationships with universities, research centers, public institutions and financial partners and showing sufficient experience in supporting innovative start-ups. Certified incubators and innovative start-ups are listed in an ad-hoc section of the Register of Enterprises of the Chamber of Commerce. Incubators need to demonstrate that they meet the requirements326 by presenting self-declarations based upon the Ministry’s indications. Up to April 2016, 36 incubators have been certified, 13 of which in the norther region of Lombardy327.

As for the requirements the applicant must meet, s/he has to show evidence of capital, amounting to

least €50,000, to develop her/his business. The capital may come from his/her own resources or from

another funding body (business angels, venture capital, banks, certified incubators, crowd-funding

etc.). If the application is lodged through incubators, the capital threshold is lower as the value of

services in kind can be included in the total amount of funding. Moreover, the applicant has to present

a business plan, which includes information on the idea the entrepreneur intends to realise, the ways

in which s/he intends to develop it, and other information, such as the business concept, the goods

and services envisaged to be produced, the business mission, the target market and the growth

objectives, the team and the internationalization, the funding, possible registered patents and, finally,

on science parks or technology hubs willing to host the start-up.

The application must be submitted to the Start-up Technical Committee, which is set up in the

Ministry for Economic Development and is composed of representatives of national associations

having links with the start-up ecosystem328. The Committee is the main interlocutor the applicant refers

to, and assesses the application by checking the innovation-related requirements and the quality of

the business plan. Moreover, it facilitates the process for the applicant as it requires on her/his behalf

(and is responsible for obtaining) a provisional Certificate of No Impediment from the local police

headquarter (questura). If the Committee reaches a positive decision, then it issues its Certificate of

No Impediment for the entrepreneur. For each innovative start-up, a Certificate of No Impediment

may normally be issued to a maximum of 5 individuals. Exceptionally, the Certificate may be issued

to up to 10 people. Besides the business plan and the evidence of capital, the applicant still needs to show a certificate of adequate housing and sufficient maintenance funding for her/himself and her/his family. This, as for any permits for autonomous work, must be at least the threshold required for the exemption from

324 Italia Start-up Visa Guidelines, http://italiastart-upvisa.mise.gov.it/pdf/linee_guida_ISV.pdf, (accessed 23 February 2016). 325 Decree of 22nd February 2013, http://www.sviluppoeconomico.gov.it/images/stories/documenti/DM_incubatori_certificati_start-up_innovativi_rev.pdf, Art. 1. 326 Chamber of Commerce, Guide to the Certified Incubators (IT), http://startup.registroimprese.it/startup/document/Guida_Incubatore_Certificato_21_01_2015.pdf 327 Chamber of Commerce (2016), List of certified incubators, http://startup.registroimprese.it/report/incubatori.pdf 328 The Committee’s members are: the Chair of the venture capital committee of the Italian Private Equity and Venture Capital Association (AIFI); the Chair of the Association of Italian Science and Technology Parks (APSTI); the Chair of the Italian Business Angels Network Association (IBAN); the Chair of the Network for the Exploitation of University Research (NETVAL); the Chair of the Association of Incubators and Italian Academic Business Plan Competitions (PNICube); a representative of the Ministry of Economic Development, who coordinates and organises the Committee secretariat. The Committee is chaired by the Ministry’s Director General for Industrial Policy, Competitiveness and Small and Medium-Sized Enterprises (from Italia Start-up Visa Guidelines, http://italiastart-upvisa.mise.gov.it/pdf/linee_guida_ISV.pdf, (accessed 23 February 2016).


http://www.sviluppoeconomico.gov.it/images/stories/documenti/DM_incubatori_certificati_start-up_innovativi_rev.pdf




141

the healthcare charges (approximately, €. 8,500.00 per year for a single person). There are no age or language requirements for start-up entrepreneurs.


The processing time for a visa for autonomous work is generally up to 120 days from the date the

application is lodged.

The Start-up Visa provides a fast-track and simplified procedure. The application is centralised and

has to be sent by email to the Ministry of Economic Development, which will process it within 30 days.

The required documents are described in the section above and include the cover letter proving

financial resources329, and the application form (detailing the business plan and the applicant’s CV)330,

if the application is made directly; in the case the migrants have secured undertaking by an incubator

to host a start-up, the application is made through the incubator331.

If the “Technical Committee” positively assesses the application, it issues the Certificate of No Impediment and informs the local police headquarter (questura). When the police has accepted the visa request, the Committee notifies the applicant and informs the consulate or embassy in the country of origin, along with the Italia Start-up Visa contact points within the Ministry of Foreign Affairs, the Ministry of Interior and the Ministry of Labour. Once received the No Impediment Certificate, the applicant can apply for a Start-up Visa to the consulate, which will then inform the Committee once the visa has been issued.

As for any foreign worker, the start-up entrepreneur has to apply for a residence permit within 8 days after his/her arrival to Italy. The applicant has to show up at the local post office to present the application and pay the fees. The post office will therefore inform the applicant on the date s/he has to show up at the police office for fingerprinting. The fees for the residence permit are:

■ €16.00 for the revenue stamp;

■ €27.50 for the residence permit in electronic format;

■ €30.00 as a service commission;

■ €80.00 for the permit valid up to 1 year.

Figure A4.1 below illustrates the procedure for a direct application and for an application through a certified incubator. In the one case, the applicant him/herself submits the relevant documents to the Start-up visa Committee, in the other case the certified incubator contacts the Committee and provides the undertaking and the cover letter proving financial resources.

329 Cover letter, http://italiastart-upvisa.mise.gov.it/pdf/Cover%20letter.doc, (accessed 23 February 2016). 330 Application form, http://italiastart-upvisa.mise.gov.it/pdf/Application%20form%20for%20ISV.doc (accessed 23 February 2016). 331 Undertaking by incubators, http://italiastart-upvisa.mise.gov.it/pdf/Undertaking%20by%20incubator.doc (accessed 23 February 2016).

http://italiastartupvisa.mise.gov.it/pdf/Cover%20letter.doc

http://italiastartupvisa.mise.gov.it/pdf/Application%20form%20for%20ISV.doc

http://italiastartupvisa.mise.gov.it/pdf/Undertaking%20by%20incubator.doc


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Figure A4.1 Flow Chart for Start-up Visa application, direct and through a certified incubator

Source: ICF translation from The Start-up Visa Guidelines (IT) 332

Unlike the permit for autonomous work, which is valid for 2 years, the Start-up residence permit is valid

for 1 year, and can be renewed under the condition that the third-country national has successfully set

up an innovative start-up. The success of the start-up is proven by the company’s registration in the

innovative start-up register to the local police headquarter, and the registration certification, along with

the self-assessment tax return, have to be presented for renewal.

As any worker whose permit is not shorter than 1 year, the start-up entrepreneur has to sign an

integration agreement once in Italy333. This commits the third-country national to meet within 2 years

specific requirements set for acquiring sufficient knowledge of Italian culture and language. The

agreement is based on points that, if lost, may cause the withdrawal of the permit.

If the third country national finds her/himself unemployed when renewing the permit, s/he can ask for a job seeking permit (permesso per attesa occupazione), which lasts for 1 year and it is not renewable but can be converted into a work permit, for employed or self-employed activities.

332 Start-up Visa Guidelines, http://www.esteri.it/mae/visti/linee%20guida%20italia%20start-up%20visa.pdf (accessed 23 February 2016). 333 Inps website,

https://www.inps.it/docallegati/Informazioni/lavoratorimigranti/Lavorare%20in%20Italia/Lavoratore%20extracomunitario/Permessi%20di%20soggiorno/Documents/Pds_lavoro_autonomo.pdf, (accessed 23 February 2016).

http://www.esteri.it/mae/visti/linee%20guida%20italia%20startup%20visa.pdf

https://www.inps.it/docallegati/Informazioni/lavoratorimigranti/Lavorare%20in%20Italia/Lavoratore%20extracomunitario/Permessi%20di%20soggiorno/Documents/Pds_lavoro_autonomo.pdf



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Innovative start-up entrepreneurs do not enjoy more favourable rights, compared to other migrant

workers. Any migrant worker can travel in the Schengen areas for up to 3 months, without visa or

fulfilling other conditions; s/he can work as employees without changing their status334; s/he can lodge

the application to obtain the Italian citizenship after 10 years of residence and can apply for family

reunification for the spouse, the minor child and, in special circumstances envisaged by the legislation

for any migrant, for adult depended child and parents. Autonomous workers must register to the

national healthcare service and no registration fee is required. Finally, they can benefit from the social

security system in place for the work they perform335. The attractive feature of the Startup visa programme for third-country nationals, as well as Italian start-up entrepreneurs, consists in a range of financial and work-related incentives. These include336:

■ incorporation and following statutory modifications by means of a standard model with digital

signature;

■ exemption from registration fees due to the Chamber of Commerce and stamp duties;

■ flexible corporate governance, especially for Ltd (in Italian, Srl), for which the creation of

categories of shares with specific rights, the possibility of carrying out operations on one’s shares,

the possibility of issuing participative financial instruments, offer to the public of capital shares

become possible;

■ exemption from the regulations on companies reporting systematic losses;

■ exemption from regulations on dummy companies;

■ exemption from the duty to affix the compliance visa for compensation of VAT credit;

■ labour discipline tailored on the specific needs of starts up: for new recruitment, it is possible to

stipulate a new fixed-term contract which lasts up to the end of the 4th year of a start-up's life,

whereas the current legislative framework envisages 36 months as a maximum;

■ remuneration through stock options and work for equity scheme;

■ tax credit for the employment of highly qualified staff;

■ tax incentives for corporate and private investments in start-ups;

■ equity crowdfunding;

■ fast-track, simplified and free-of-charge access for innovative start-ups and certified incubators to

the Fondo Centrale di Garanzia, a Government Fund that supports access to credit through

guarantees on bank loans;

■ no imposed standard of remuneration: provided that remuneration is in line with the minimum

wage norms, the salary can have a variable component linked to output and performance

parameters;

■ fail fast procedure, reducing the cost of failing for the entrepreneur.

334 If the Start-up Visa holder becomes an employee, there is no need to change her/his status, because holders of permits for autonomous work are allowed to perform any sorts of work. However, at the moment of renewing the permit, the reason will be changed into dependent work. This does not imply an application to change status see EMN IT (2015), “Changes in immigration status and purpose of stay”, available at http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/docs/emn-studies/emn-studies-15a_italy_common_template_change_of_status_final_version.pdf 335 Inps website, https://www.inps.it/docallegati/Informazioni/lavoratorimigranti/Lavorare%20in%20Italia/Lavoratore%20extracomunitario/Permessi%20di%20soggiorno/Documents/Pds_lavoro_autonomo.pdf, (accessed 23 February 2016). 336 Start Up Visa, Executive Summary, http://www.sviluppoeconomico.gov.it/images/stories/documenti/Executive_Summary_of%20Italy_Start-up_Act%2026_05_2015.pdf (accessed 23 February 2016).

http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/docs/emn-studies/emn-studies-15a_italy_common_template_change_of_status_final_version.pdf

http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/docs/emn-studies/emn-studies-15a_italy_common_template_change_of_status_final_version.pdf



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Table A4.2 reports an overview of the rights, as well as requirement and procedure for the Start-Up visa vis-à-vis the permit for autonomous work.

Table A4.2 Overview of admission criteria, procedure and rights of the Start-Up Visa and the Permit for Autonomous Work

Overview Start-up Visa Autonomous Work Permit

Admission

criteria

Meet the definition of start-up

Being innovative (either by a

certain expenditure on R&D, or

certain qualifications of the

workforce, or patents)

Business plan

At least €50,000 of capital to

invest

Certificate of adequate hosing

Maintenance fund

(approximately €. 8,500.00 per

year)

Available quota

Business of interest for the Italian economy,

At least €500,000 of capital to invest

The perspective of creating at least 3 new job positions in the job

market

Registration in the professional orders or to the public registers

No Impediment Certificate issued by the competent authority

(depending on the sector, the professional order, the chamber of

commerce, of artisanship, of agriculture, or the relevant ministries)

Certificate of ‘No Impediment’ issued by the local police headquarter

Certificate of adequate hosing

Maintenance fund (approximately €. 8,500.00 per year)

Support

scheme

A package of financial incentive

for start-up (equally available to

EU nationals and third-country

nationals)

None

Procedure Submitting the application by

email to the Technical

Committee directly or through a

certified incubators

Apply for the residence permit within the quota online

Duration of

procedure

(max.)

30 days 120 days

Application

fee

Approximately 133,50 €

Duration of

permit (max.)

1 year 2 years

Extension

possible

Yes

Yes

Change of

status

possible

Yes (Start-Up Hub channel) Yes

Facilitation of

permanent

residence

No No

Rights Access to the labour market

Self-employment

Access to the labour market

Self-employment

Restrictions

on economic

activity

No sectoral restrictions No sectoral restrictions

Family members

Family

reunification

possible

Yes

Requirements Maintenance fund

Rights of family

members

Full access to the labour market


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The permits issued for autonomous workers (first-issuance and change of status) were 4,933 in

2013. Most of them were issued in Northern Italy (3,569), while only a few in Centre (733) and

Southern Italy (452)337.

Up to 31st December 2014, in Italy there were 233,849 permits for autonomous work (stock), out of

3,117,482 of residence permits338.

An Evidence Report published on 31st December 2015 by the Ministry of the Economic

Development339 provided detailed figures covering the period 24th June 2014 - 31st December 2015

(18 months).

The total number of applications received for the Startup Visa was 61 (43 of which in 2015): 45 men

and 16 women, being on average 34.2 years old. Ten teams were proposed: 1 Japanese, 3 Ukrainian,

5 Russian, 1 Iranian, having from 2 to 4 participants, and all the participants received a positive

response. Only 1 application was lodged through a certified incubator (Working Capital).

With regard to the applicants’ background, 36 had entrepreneurship experience while 22 previously

worked as employees. One applicant had no previous working experience, one was a student and

another an artist. The professional areas of the applicants were mainly informatics and marketing,

followed by management and engineering. Most of the applicants were highly educated: 8 candidates

had a PhD, 29 candidates obtained Master’s degree, 14 obtained a Bachelor’s degree and only 10 did

not reach any level of tertiary education. The most common educational fields were informatics,

marketing, business, design and engineering.

In total, the applicants were from 18 countries of origin340, whereby Russia and Ukraine showed the

highest number of application in relative terms (Russia, 20 applications, whose 14 received a positive

decision and Ukraine, 10 applications, all of which received a positive decision).

In most cases (54), candidates apply to set up new enterprises; in 7 cases, applicants asked to join

start-ups that were already established, mostly by Italian entrepreneurs.

The acceptance rate was as high as 65.6%: 40 applications received a positive response out of 61.

With regard to the rejection reasons, 11 applications presented a weak or not innovative business

plan, 6 applications were rejected because manifestly falling short of the basic requirements, while 4

were (in December 2015) in the assessment stage. Interestingly, only 4 Start-up Visa holders have

changed the purpose of their stay after obtaining the visa.

With regard to the destination of Start-up Visa holders, most of them gathered in Lombardy (15 in Millan and 4 in Como), which is a one of the more economically competitive and immigrant-dense regions in Italy. For the rest, they were scattered throughout the Italian territory. Only 5 third-country nationals already residing in Italy applied to change their status into start-up entrepreneur (Italia Startup Hub programme). All of them successfully obtained a Startup Visa: their origin was South Korea (2 applicants), Iran (2 applicants), the US (1 applicants). Of these, only one application was lodged through a certified incubator.

337 Uffucio centrale di statistica, http://ucs.interno.gov.it/ucs/allegati/203765.htm, (accessed 23 February 2016). 338 Ufficio centrale di statistica, http://ucs.interno.gov.it/FILES/AllegatiPag/1263/IMM_INT00048_DPS_2015.pdf, (accessed 23 February 2016). 339 Sintesi dati Start-up Visae Start-up Hub, http://www.sviluppoeconomico.gov.it/images/stories/documenti/Sintesi_dati_Italia_Start-up_Visa_Hub_31_12_2015.pdf (accessed 23 February 2016); the Report will be updated on a quarterly basis

340 The applicants’ countries of origin follow. The first number represents the accepted applications, the second

the applications received: Armenia: 1/1; Argentina 1/1; Australia: 1/1; Brazil: 3/3; China: 0/2; South Corea: 0/1; Egypt: 1/1; Japan: 3/3; Iran: 1/1; Israel: 1/1; Lebanon: 0/1; Nepal: 1/1; Nigeria: 0/1; Pakistan: 0/5; US: 3/7; Uzbekistan: 0/1.

http://ucs.interno.gov.it/ucs/allegati/203765.htm


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Being introduced in 2014 and having received only 61 applications up to December 2015, the scheme

is too recent for a thorough evaluation. However, the very low number of applications and the almost

null percentage that came through a certified incubators (1 out of 61) indicates that the scheme falls

short of its objectives341. This section discusses some elements of success and potential elements of

lack of success.

Potential elements of success

The Italian scheme presents several elements of potential success:

■ It introduces a fast-track scheme for innovative entrepreneurs which reduces the application

processing time by 3 months compared to the normal procedure (120 vis-à-vis 30 day).

■ It is flexible enough to accept various sources of funding, and if the application is lodged through

an incubator, the investment threshold becomes lower.

■ Also, the additional financial requirement to provide for the living expenses of the applicant is very

low.

■ The scheme is based on a commitment to reduce the red tape and the burden of administrative

requirements on migrant entrepreneurs and provides a “light” package of tax and social security

regulation to support entrepreneurship.

■ Moreover, the whole of government approach sees different ministries cooperating for the

issuance of the Start-up visa and this is a première in Italy’s migration policy.

■ A pivotal element is the role of the Technical Committee, as an experienced, technically prepared

and centralised scrutinizing body for the business plan.

■ Importantly, the scheme does not offer only a visa, but it involves incubators and foresees a range

of financial and labour incentives for start-up entrepreneurs.

With regard to marketing campaigns, the Ministry of Economic Development set up an informative and

user-friendly website342, available in English, aimed at promoting the country as a place to locate and

scale-up start-ups, at collecting all the information on the application process and paperwork, and at

mapping the ecosystem throughout the country. However, the Ministry does not carry out an active

promotion campaign, although several proposals are under consideration. The main obstacle for

active promotion is reported to be the lack of funding and personnel343.

Business and higher-education environment in Italy

The absolute number of applicants is low; even though the success rate is as high as 66%. When

compared to other EU start-up visa schemes, the Italian number of visas granted do not appear to be

particularly daunting, yet expectations in relation to its numbers were higher and the scheme presents,

on paper, many characteristics that could lead to success..

341 During the European Dialogue on Skills and Migration (Brussels, 29/01/2016 - http://www.skillsandmigration.eu/), a representative of the Italian Ministry of Interior made clear that the numbers of applicants are so far disappointing. Similarly, a representative of the Ministry of the Economic Development expressed in an interview to the Corriere della Sera the urgency of increasing the number of applicants, Corriere della Sera, “Sempre piu’ attrattivi per le start-up. Ora pero’ l’Italia si apra al mondo”, 31st July 2015, http://corriereinnovazione.corriere.it/2015/07/31/sempre-piu-attrattivi-le-start-up-problema-parliamo-poco-l-inglese-0a2528c0-3747-11e5-88ac-a32ff5fc69d6.shtml. 342 http://italiastart-upvisa.mise.gov.it/#landing-section 343 EMN 2014, Ad-Hoc Query on Requirements for operating a business activity, http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/docs/ad-hoc-queries/economic-migration/565_emn_ahq_requirements_for_operating_business_activity_2014_en.pdf (accessed 23 February 2016).

http://www.skillsandmigration.eu/

http://corriereinnovazione.corriere.it/2015/07/31/sempre-piu-attrattivi-le-startup-problema-parliamo-poco-l-inglese-0a2528c0-3747-11e5-88ac-a32ff5fc69d6.shtml


http://italiastartupvisa.mise.gov.it/#landing-section





147

The questions are why foreign start-up entrepreneurs do not seem interested in applying for a permit

in Italy and why incubators do not actively engage themselves with international talent.

To reply to these questions it may be useful to look at the business context in Italy in a comparative

perspective. The Doing Business Report344 drafted by the Work Bank and measuring the regulatory

quality and efficiency of doing business provides some insights to that purpose. The index employs 11

sets of indicators, focusing on the regulations in place for several activities, like starting a new

business, getting credit, enforcing contracts and labour market activities. According to World Bank

index, in 2016, Italy comes at the 45th place out of 189 for facility of doing business, and, among the

EU countries, is ranked at the 22nd place, after Belgium, Hungary, Croatia, Bulgaria and Romania.

The Global Competitiveness index345, which is drafted by the World Economic Forum encompasses a

broader set of variables. It aims at measuring countries’ competitiveness and is composed of three

sets of sub-indicators, measuring the basic requirements for competitiveness (institutions,

infrastructure, macroeconomic environment and health and primary education), the efficiency

enhancers (higher education and training, goods market efficiency, labour market efficiency,

technological readiness and market size), and the innovation and sophistication. In 2015-16, Italy

ranks 43th out of 140 countries for competitiveness. The identified weaknesses mainly concern the

institutions, the macroeconomic environment, the labour market efficiency and the development of

financial market. The innovation indicator is particularly relevant when speaking about innovative start-

ups. It captures the capacity for innovation, the quality of scientific research institutions, the company

spending on R&D, the university-industry collaboration, the government procurement of advanced

technology products, the availability of scientists and engineers and the patent applications. For

innovation, Italy ranked 32nd (and 14th if only EU Member States are considered).

From these rankings, it seems reasonable to hold the scarcely attractive conditions for doing business

in Italy as one factor to explain the low numbers of foreign start-up entrepreneurs. Another interesting

factor to consider is the low percentage of graduates, in particular in the STEM fields (science,

technology, engineering, mathematics). Italy is the country with the second-lowest percentage of

graduates in the EU, after Romania: in 2015, only 15.3% of the population had completed at least one

cycle of tertiary education, while the EU average was 26.5%346. Within graduates, the number of

students who chose science, mathematics, computing, engineering, manufacturing or construction

was 13.5 every 1000 inhabitants in 2013, below the EU average of 18.2 every 1000 inhabitants347. A

low percentage of (STEM) graduates indicates a low supply for the innovative sector and an academic

environment which, overall, is scarcely attractive to international students in the STEM field.

Migrant entrepreneurs are often third-country nationals who first migrated to the country as

international students. In Italy, the potential international students’ pool results quite limited, as only

2.2% of students come from abroad348. One cause of the low internationalisation level may be the

relatively low score of Italian universities in international indexes. For instance, in the QS Word

University Ranking, Italian universities rank only as from the 187th place (Politecnico di Milano) and

only three Italian universities are ranked between the 1st and 300th positions. When filtering by

faculties, engineering and technology faculties perform slightly better, and 5 universities rank within

the first 200 positions349. However, the performance remains low and this could deter international

students in certain fields to undertake their studies in Italy.

344 World Bank (2016), Doing Business. Measuring Regulatory Quality and Efficiency, available at http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-Reports/English/DB16-Full-Report.pdf (viewed on 17th March 2016). 345 World Economic Forums (2016), The Global Competitiveness Index, available at http://reports.weforum.org/global-competitiveness-report-2015-2016/the-global-competitiveness-index-2015-2016/ (viewed on 17th March 2016). 346 Eurostat, [edat_lfse_03]. Extracted on 18th March 2016. 347 Eurostat, [educ_uoe_grad04]. Extracted on 18th March 2016. 348 ICF calculation, based on Eurostat, [educ_uoe_enrt01] and [educ_uoe_mobs02]. Extracted on 18th March 2016. 349 QS World University Ranking, http://www.topuniversities.com/university-rankings/world-university-rankings/2015#sorting=rank+region=+country=174+faculty=+stars=false+search=

http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-Reports/English/DB16-Full-Report.pdf


http://reports.weforum.org/global-competitiveness-report-2015-2016/the-global-competitiveness-index-2015-2016/

http://www.topuniversities.com/university-rankings/world-university-rankings/2015#sorting=rank+region=+country=174+faculty=+stars=false+search

http://www.topuniversities.com/university-rankings/world-university-rankings/2015#sorting=rank+region=+country=174+faculty=+stars=false+search


148

Another factor that could undermine the success of the scheme is the poor diffusion of the English

language throughout the country. One of the designers of the Startup Visa from the Ministry of

Economic Development, in an interview to the Corriere della Sera350, reported that one of the major

difficulties encountered by foreigner entrepreneurs in Italy is the language, as English is not very

common in the Italian professional environment.

The conditions of the business environment, the language and educational system, may in part

explain why Italy is not attractive enough as a destination for entrepreneurs, and therefore why the

Startup Visa had such a low number of applicants. However, the low number of applications lodged

through an incubator is another puzzling fact that requires explanation. Incubators benefit from the

internationalisation of their working environment351 and third country nationals applying through an

incubator face a lower investment threshold to meet. Notwithstanding these favourable conditions,

only one application was lodged through an incubator up to December 2015. No data are available on

the incubators and their attitude towards migrant entrepreneurs to shed light on this fact.

Further open issues

This research presents some gaps that remain to be investigated:

■ The overall quotas allocated for autonomous workers are known, however it is not clear whether

these are actually filled or not. The overall quotas have not been entirely filled in the last two

years352, but no specific information is available specifically on autonomous workers.

■ In the 2016 quotas decree, the definition of autonomous workers, besides start-up entrepreneurs,

included also entrepreneurs carrying out activities of interest for the Italian economy, which

envisage an investment in the business amounted to not less than €500,000 and the creation of at

least 3 new jobs. The relationship between the visa for such entrepreneurs and start-up

entrepreneurs needs to be further investigated, along with the implementation modalities of the

(non-start-up) entrepreneur channel.

■ The Guidelines for the start-up visa reports that “for each innovative start-up, a Certificate of No

Impediment may be issued to a maximum of 5 individuals”353. It is not clear whether this implies

that the individual investment in case of five applicants is reduced to one fifth of the total amount.

■ If it is known that the visa can be renewed under the condition that the start-up is proven to be

successful; yet it is not clear what the criteria for evaluating the success are and which general

conditions apply for the renewal.

■ A point of further investigation is the role of incubators. Since only one application was lodged

through an incubator, despite the more favourable conditions, it should be enquired why this is the

case. In particular, it should be further researched whether incubators are not interested in foreign

start-ups, how they select candidates, and how they advertise themselves. Moreover, it should be

investigated whether incubators are approached by foreigners, and in general, which difficulties

they experience.

■ Another puzzling fact is the low number of Start-up Hub (i.e. changes from the student permit)

applicants: it seems that the start-up channel is not used as a second permit by graduates. The

reasons for that may be located into the role universities play to advertise and facilitate the access

of their students to such a programme.

350 Corriere della Sera, “Sempre piu’ attrattivi per le start-up. Ora pero’ l’Italia si apra al mondo”, 31st July 2015, ”http://corriereinnovazione.corriere.it/2015/07/31/sempre-piu-attrattivi-le-start-up-problema-parliamo-poco-l-inglese-0a2528c0-3747-11e5-88ac-a32ff5fc69d6.shtml. 351 OECD (2008), The Global Competition for Talent: Mobility of the Highly Skilled, http://www.oecd.org/sti/sci-tech/theglobalcompetitionfortalentmobilityofthehighlyskilled.htm.

352 Interview with a representative of the Ministry of Interior, 17th November 2015.

353 Start-up Visa Guidelines, http://www.esteri.it/mae/visti/linee%20guida%20italia%20start-up%20visa.pdf (accessed 23 February 2016).



http://www.oecd.org/sti/sci-tech/theglobalcompetitionfortalentmobilityofthehighlyskilled.htm


http://www.esteri.it/mae/visti/linee%20guida%20italia%20startup%20visa.pdf


149

■ Finally, given the poor business environment as described above, it should be investigated which

were the reasons that drove the foreign entrepreneurs that applied for the Start-Up Visa to build up

their company specifically in Italy.

References

■ Immigration Act 286/1988, Art. 26,2.

■ Ministry of Interior Website, LA BLUE CARD E GLI ALTRI CASI PARTICOLARI DI INGRESSO AL

DI FUORI DELLE QUOTE O CON QUOTE SPECIFICHE

http://www.integrazionemigranti.gov.it/Attualita/IlPunto/Documents/focus%20blu%20card.pdf.

■ Decree of the ministry of Economic Development, 22nd February 2013, http://www.sviluppoeconomico.gov.it/images/stories/documenti/DM_incubatori_certificati_start-

up_innovativi_rev.pdf

■ EMN 2014, Ad-Hoc Query on Requirements for operating a business activity,

http://ec.europa.eu/dgs/home-affairs/what-we-

do/networks/european_migration_network/reports/docs/ad-hoc-queries/economic-

migration/565_emn_ahq_requirements_for_operating_business_activity_2014_en.pdf

■ EMN Study 2014, Admitting third country nationals for business purposes, Italy Country Report


do/networks/european_migration_network/reports/docs/emn-

studies/15a.italy_business_study_en_version.pdf

■ Decree of the President of the Council of Ministers, 16th October 2012,

http://www1.interno.gov.it/mininterno/export/sites/default/it/sezioni/sala_stampa/notizie/immigrazio

ne/2012_11_23_decretoflussi2012.html.

■ Decree of the President of the Council of Ministers, 19th December 2013,

http://www.lavoro.gov.it/Notizie/Pages/20131216_circolare-decreto-flussi.aspx.




http://www.integrazionemigranti.gov.it/Attualita/News/Documents/Circolare%20congiunta%20DPC

M%2014.12.2015.pdf.

■ Italia Start-up Visa Guidelines, http://italiastart-upvisa.mise.gov.it/pdf/linee_guida_ISV.pdf).

■ Inps webpage,

https://www.inps.it/docallegati/Informazioni/lavoratorimigranti/Lavorare%20in%20Italia/Lavoratore

%20extracomunitario/Permessi%20di%20soggiorno/Documents/Pds_lavoro_autonomo.pdf

■ Start Up Visa, Executive Summary,

http://www.sviluppoeconomico.gov.it/images/stories/documenti/Executive_Summary_of%20Italy_S

tart-up_Act%2026_05_2015.pdf

■ Ufficio Centrale di Statistica, http://ucs.interno.gov.it/ucs/allegati/203765.htm

■ Ufficio Centrale di Statistica,


■ Report on Start-up Visa and Start-up Hub, Sintesi delle principali evidenze prodotte

http://www.sviluppoeconomico.gov.it/images/stories/documenti/Sintesi_dati_Italia_Start-

up_Visa_Hub_31_12_2015.pdf;

■ Ministry of Economic Development website, http://italiastart-upvisa.mise.gov.it/

■ World Economic Forums (2016), The Global Competitiveness Index, available at

http://reports.weforum.org/global-competitiveness-report-2015-2016/the-global-competitiveness-

index-2015-2016/ (viewed on 17th March 2016).

http://www.integrazionemigranti.gov.it/Attualita/IlPunto/Documents/focus%20blu%20card.pdf











http://www.lavoro.gov.it/Notizie/Pages/20131216_circolare-decreto-flussi.aspx









http://ucs.interno.gov.it/ucs/allegati/203765.htm




http://italiastartupvisa.mise.gov.it/




150

■ World Bank (2016), Doing Business. Measuring Regulatory Quality and Efficiency, available at

http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-

Reports/English/DB16-Full-Report.pdf (viewed on 17th March 2016).

■ OECD (2008), The Global Competition for Talent: Mobility of the Highly Skilled,


■ Chamber of Commerce (2015), Guide to the Certified Incubators (IT),

http://startup.registroimprese.it/startup/document/Guida_Incubatore_Certificato_21_01_2015.pdf

■ Chamber of Commerce (2016), List of certified incubators,

http://startup.registroimprese.it/report/incubatori.pdf




http://startup.registroimprese.it/startup/document/Guida_Incubatore_Certificato_21_01_2015.pdf


151

Annex 5 Country Fiche: The Netherlands

Key Messages:

The Netherlands provides an excellent climate for entrepreneurs, including via its

established start-up and tech clusters; Europe’s highest Internet speed and the second-

highest broadband penetration; excellent transport links (including via sea, rail and air) and

widespread knowledge of English among the workforce.

There are two admission schemes for entrepreneurs: a general self-employment scheme

(points-based system) and a special scheme for start-up entrepreneurs. The former scheme

entered into force in 2008 and the latter scheme on 1st January 2015. The two schemes are

interlinked: after one year on the residence permit for start-up entrepreneurs, the

entrepreneur may have the duration of their residence permit extended on the basis of the

self-employment scheme. An endorsement letter should be provided by the facilitator for the

admission of the entrepreneur under the general self-employment scheme.

The general self-employment permit is based on a points-based system whereby points are

allocated for under three categories: (i) personal experience, (ii) a sound business plan and

(iii) the added value of the economic activities for the Dutch economy.

The residence permit for start-up entrepreneurs is based on the criteria of working together

with a facilitator who can provide guidance to the start-up. Further conditions include having

a step-by-step plan, having enough subsistence resources and the condition that products or

services are innovative. The permit is granted for one year after which the general self-

employment permit will have to be obtained.

About 30 residence permits for self-employment are issued on average every year, which

represents about 15% of the total applications.

With regard to the residence permit for start-up entrepreneurs, in total 95 applications were

submitted in 2015 from which 21 residence permits were granted, 26 are in progress, 28

were denied and 20 were retracted.

No evaluations of the residence permit for start-up entrepreneurs have been carried out yet.

An evaluation of the scheme is planned for 2017 after the residence permit has been in force

for two years.


152


The Netherlands is one of the top twenty largest economies in the world354 and is ranked the 4th

knowledge economy by the World Bank355.

A number of infrastructural prerequisites play a key role in attracting start-ups and entrepreneurs in the

Netherlands, including, inter alia, more than ten already established start-up and tech clusters;

Europe’s highest Internet speed and the second-highest broadband penetration (the share of users

having broadband connection); excellent transport links (including via sea, rail and air) to Europe and

the rest of the worlds and widespread knowledge of English language (more than 90% of the

population speaks English).356

There are a number of established innovation and technology hubs and clusters in the

Netherlands, including, inter alia, Rotterdam, Delft and Hague for cleantech357, aerospace and

cybersecurity; Amsterdam for the creative and graphic industry; Twente and Leiden for bio science,

med-tech, nanotechnology and pharma. 358

Universities and research centres in the Netherlands play a crucial role in innovation and generating

start-ups. For example, universities in the Twente region have incubated the highest number of start-

ups in Europe (2,000+) and several have scaled-up into global brands: such as, Booking.com,

TakeAway.com, Demcon, Drukwerkdeal.nl, and Xsens 3D motion tracking. Another example is the

Leiden Bio Science Park which has built a large, vibrant ecosystem welcoming collaboration with

innovative life-science start-ups and established companies. There are dedicated incubator buildings

close to the research facilities at Leiden University and Leiden University Medical Centre.

Through its ‘Ambitious Entrepreneurship Action Plan’, the government policy for entrepreneurs

aims to strengthen the Netherlands’ position as one of the world’s top five most competitive

economies as well as increase spending on research and development to 2.5% of the gross domestic

product (GDP) by 2020.359 One of the measures under the ‘Ambitious Entrepreneurship Action Plan’ is

the Start-up Delta initiative established in January 2015. It is focused on strengthening the

international position of Dutch start-up businesses and attracting foreign start-up businesses to the

Netherlands.360 Start-up Delta is an initiative formed with a multidisciplinary team from government

officials from all layers of the Dutch government. The Ministry of Economic Affairs finances the

initiative and provides the legal framework to enable businesses to start and grow quickly: funding,

appropriate regulation, and a new entry scheme for ambitious startups from outside of European

Union. The initiative has formed partnerships with corporates, educational systems and the financial

world.361This is a collaboration of government bodies, knowledge institutes, startups, financiers and

businesses. The overall goal of StartupDelta is to establish a thriving and competitive ecosystem in

the Netherlands, listing a top 3 position in Europe. Established businesses can team up with

StartupDelta and help startups to grow further. StartupDelta aims to collaborate with existing startup

hubs in the Netherlands, such as the High Tech Campus in Eindhoven and Kennispark Twente, as

well as leading international hubs around the world. Since the initiative is very recent, no evaluations

have been carried out yet.

354 World Bank (2015) World GDP Ranking, available at: http://knoema.com/nwnfkne/world-gdp-ranking-2015-data-and-charts 355 World Bank, Knowledge Economy Index (KEI) Ranking, available at: http://data.worldbank.org/data-catalog/KEI 356 http://www.startupdelta.org/about/faq 357 Clean technology (clean tech) is a general term used to describe products, processes or services that reduce waste and require as few non-renewable resources as possible. 358 http://www.startupdelta.org/hubs 359 https://www.government.nl/topics/enterprise-and-innovation/contents/the-government-supports-entrepreneurs 360 http://www.startupdelta.org/about 361 http://www.startupdelta.org/about

http://booking.com/

http://www.takeaway.com/

http://www.demcon.nl/en/

http://www.drukwerkdeal.nl/nl/info/gewoonindrukwekkend

https://www.xsens.com/





http://www.startupdelta.org/about/faq

http://www.startupdelta.org/hubs

https://www.government.nl/topics/enterprise-and-innovation/contents/the-government-supports-entrepreneurs

http://www.startupdelta.org/about

http://www.startupdelta.org/about


153

A Special Envoy Ambassador has been appointed for the purpose of promoting the Netherlands

and attracting start-up entrepreneurs.362 The first Special Envoy appointed was Mrs Neelie Kroos for

the duration of 18 months.

As of 2015, a new regulation363 makes it possible for ambitious entrepreneurs outside of the European

Union to apply for a temporary residence permit for the Netherlands. The residence permit for 'start-

up' entrepreneurs affords entrepreneurs one year to launch an innovative business. A prerequisite is

that this start-up must be guided by a facilitator acting as an experienced mentor that is based in the

Netherlands (see Section 2.1.2 below for more details). After one year, the start-up entrepreneur may

have the duration of their residence permit extended on the basis of the self-employment scheme.

This self-employment scheme is a general scheme for immigrant business owners in the Netherlands

which was introduced364 in 2008 and entered into force365 in 2010. Both schemes are examined in

detail in Section 2 below.

Design of the schemes

The Netherlands has two admission schemes for entrepreneurs: a general self-employment scheme and a special scheme for start-up entrepreneurs. The former scheme366 was introduced in 2008 and entered into force in 2010 and the latter scheme took effect on 1st January 2015. The two schemes target different groups of TCNS – i.e. the general self-employment scheme has a broader scope and is aimed at immigrant business owners while the residence permit for start-ups is specifically for start-ups and is based on the condition of working with a facilitator. Nevertheless, the two schemes are interlinked in the sense that after one year on the residence permit for start-up entrepreneurs, the entrepreneur may have the duration of their residence permit extended on the basis of the self-employment scheme. An endorsement letter must be provided by the facilitator for the admission of the entrepreneur under the general self-employment scheme. Facilitators are defined as legal entities which must need to have a track record of at least 2 years in guiding start-ups; must be financially sound and cannot have a majority interest in the new business or be related to the start-up entrepreneurs (although they could provide financing). The role of the facilitator is to provide the start-up with guidance. The main features of the two schemes are examined in the comparative table below.

Table A5.1 General self-employment permit and residence permit for start-up entrepreneurs

Overview General self-employment permit Residence permit for start-up entrepreneurs

Admission

criteria

‘Essential interest’ of the Netherlands is served

Points-based system (consisting of three parts (i)

personal experience, (ii) a sound business plan and (iii)

added value of economic activity

Working with a facilitator

The product/service is innovative

Support scheme None None

Procedure Application submission with Immigration and

Naturalisation Service (IND)

Application submission with

Immigration and Naturalisation

Service (IND)

Duration of

procedure (max.) 90 days

50 days

Application fee €1.296 €389

Duration of

permit (max.) 2 years

1 year

362 https://www.government.nl/latest/news/2014/12/08/neelie-kroes-appointed-special-envoy-for-startups 363 Kamerstukken (Regulation) II 2014- 2015 30 573 nr. 130, p. 3 364 Policy guideline of 21 11 2007 from the Minister of Economic affairs, Stcrt 4 januari 2008, nr. 3 365 Article 3.30 paragraph 2 Aliens Decree (Vreemdelingenbesluit) 366 verblijfsvergunning als zelfstandige

https://www.government.nl/latest/news/2014/12/08/neelie-kroes-appointed-special-envoy-for-startups


154

Overview General self-employment permit Residence permit for start-up entrepreneurs

Extension

possible Yes

Yes after 1 year, the TCN can be

extended to the self-employment

permit

Rights Family reunification under the general conditions Family reunification under the

general conditions

Admission criteria

This section outlines the admission criteria distinguishing between the ‘general self-employment

permit’ and the special residence permit for start-up entrepreneurs.

General self-employment permit Under Dutch legislation, immigrant business owners are defined as third-country nationals who

practice a profession or operate a business in the Netherlands on a self-employed basis.367 The

allowed legal forms are sold traders, general partnerships and private limited liability companies.

Branches of an existing foreign enterprise are also possible, within all sectors, with the exception of

the prostitution.

In principle, any immigrant business owner may qualify for a residence permit to work on a self-

employed basis, provided that essential interests of the Netherlands are served.368 The interests of the

Netherlands are served, for example, if a contribution is made in the area of public health, culture or

the economy, or in a socio-economic area.

The admission is based on a points-based system under which an assessment is made as to

whether the business will serve an essential Dutch interest. The points-based system was developed

by the Ministry of Economic Affairs and it is applied in the assessment by the Immigration and

Naturalisation Service (IND) in consultation with the Enterprise Agency.

The points system consists of three parts: (i) personal experience, (ii) a sound business plan and (iii)

the added value of the economic activities for the Dutch economy. A total maximum score of 300

points can be obtained for all components. At least 90 points are required for a positive

recommendation with at least 30 points must be scored for each component. For the purpose of the

self-employment scheme up to 30 points can be awarded if a person is highly educated under the

personal experience component (i.e. 30 points are received for PhD or Master of Science degree,

followed by 25 points for other Master’s degrees including MBA and 20 points for Bachelor degrees).

Third-country nationals who can contribute to the economy in terms of ‘high quality’ knowledge and in

the form of entrepreneurship obtain, as a rule, a high score for the innovativeness component.

Furthermore, if a highly educated entrepreneur has obtained the minimum number of 90 points by

having at least 45 points for the ‘personal experience’ component plus at least 45 points for the

‘business plan’ components, but fails to obtain the minimum number of 30 points for the added value

for the Dutch economy, a positive recommendation may still be issued. In order to assess if admission

will serve essential interests of the Netherlands, the IND can ask other ministries for advice. In the

case of artists, the Minister of Education, Culture and Science will issue a recommendation to the IND,

while a sports teacher will be assessed on the basis of a recommendation from the Minister of Health,

Welfare and Sport. If it concerns practicing a profession or operating a business on a self-employed

basis, the IND will ask the Minister of Economic Affairs for advice.369

367 European Migration Network (2015), The Netherlands National Report ‘Admitting third-country nationals for business purposes’, available at: http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/studies/results/index_en.htm 368 Ibid 369 Ibid

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The third-country national must be the owner or co-owner of the business and be demonstrably active in the enterprise. This must be evidenced by the business plan and the registration with the Chamber of Commerce. The business plan must provide details about the background of the entrepreneur, specifications on the product or service, a market analysis, pricing policy, the organisation and financing. This must also be properly substantiated. The business plan is examined within two months370. The third-country national must also submit a copy of a document showing that they have the necessary permits in order to practice a profession or operate a business. An example is a registration in the BIG register. This document must have been issued by a competent Dutch authority. If the third-country national has/had an enterprise in the country of origin, he or she must also submit a copy of the deed of incorporation and the articles of association of the enterprise. The enterprise’s details, including name and location, are required for the registration with the Chamber of Commerce. The third-country national must also take up residence in the Netherlands.371 Some types of enterprises are, however, subject to other conditions. If a third-country national wants to work as a physician, for example, his diplomas and a registration in the BIG register will be required. No minimum capital is required, but financing will result in points being awarded in the points system for the self-employment scheme. There is no requirement for having a command of the Dutch language. A command of the Dutch language and any affinity with the Netherlands will, however, result in additional points for immigrant business owners.372

Further general conditions include373:

■ The TCN holds a valid passport.

■ The TCN does not pose a danger to public order or national security.

■ The TCN has not been convicted for a crime and has not committed a war crime, terrorist acts, or

a crime against humanity.

■ The TCN is obliged to take out a health insurance policy.

■ The TCN must undergo a tuberculosis (TB) test in the Netherlands. For some certain TCN a TB

test is not necessary.

■ The TCN must have sufficient and long-term means of support

■ The TCN has not previously stayed in the Netherlands illegally.

■ The TCN has not given false information or has withheld important information to support any

previous applications.

■ The TCN meets the requirements for practicing his profession.

For US and Japanese citizens it is also possible to be self-employed in the Netherlands under the

Dutch-American Friendship Treaty or the Treaty of Trade and Navigation between the Netherlands

and Japan. Under the terms of the treaties, citizens of either the United States or Japan may be self-

employed and establish a business in the Netherlands without being subject to the requirement to

prove that the business brings a substantial benefit to the Dutch national interest. The conditions that

must be met include374:

370 https://ind.nl/EN/business/investor-self-employment-start-up/Self-employment/Pages/default.aspx 371 European Migration Network (2015), The Netherlands National Report ‘Admitting third-country nationals for business purposes’, available at: http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/studies/results/index_en.htm 372 https://ind.nl/EN/business/investor-self-employment-start-up/Self-employment/Pages/default.aspx 373 EMN Ad-Hoc Query 2015 No.565 ‘Requirements for operating a business activity’ 374 https://ind.nl/EN/individuals/residence-wizard/work/working-on-a-self-employed-basis

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■ The TCN operates the business between the US and the Netherlands, or between Japan and the

Netherlands.

■ The TCN starts a new business opportunity and represent an American or Japanese business in

the Netherlands or starts a profession in which you have invested a substantial capital.

■ The TCN has a sufficient and long-term means of support.

Residence permit for start-up entrepreneurs

As of January 2015, a new regulation makes it possible for entrepreneurs outside of the European

Union to apply for a temporary residence permit for the Netherlands. The so-called residence permit

for start-up entrepreneurs affords entrepreneurs one year to launch an innovative business. Start-up

entrepreneurs often do not qualify for the self-employment scheme, because they do not (yet) have a

detailed business plan. In this respect, the start-up scheme covers this category of entrepreneurs. A

prerequisite is that this start-up must be guided by a facilitator – i.e. an experienced mentor that is

based in the Netherlands. After one year, the start-up entrepreneur may have the duration of their

residence permit extended on the basis of the self-employment scheme.

The conditions for obtaining the residence permit for start-up entrepreneurs include:

■ Working together with a reliable expert facilitator;

■ The product or service is innovative;

■ The start-up entrepreneur has a plan to advance the idea to a business;

■ The start-up entrepreneurs and the facilitator are registered in the Commercial Register of the

Chamber of Commerce;

■ There are sufficient funds to reside and live in the Netherlands amounting to 1139.90 Euro for

each month the applicant plans to stay in the Netherlands375

One of the requirements for the residence permit is working together with a facilitator who can provide guidance to the start-up. Facilitators are defined as legal entities which must need to have a track record of at least 2 years They must have experience in guiding start-ups; must be financially sound and cannot have a majority interest in the new business or be related to the start-up entrepreneurs (although they could provide financing). The role of the facilitator is to provide the start-up with guidance. This cooperation must be specified with a (signed) agreement between the start-up entrepreneur and the facilitator. The facilitator can, for example, help with operational management, marketing, research and seeking investors for setting up the innovative company. The Netherlands Enterprise Agency (RVO.nl) keeps a list of recognised facilitators376.

The second condition requires that the product or service is innovative. The product or service is considered innovative if at least one of the 3 conditions is met:

■ The product or service is new to the Netherlands;

■ A new technology for production, distribution or marketing is involved;

■ There is a new innovative organisational and process approach.377

Another reason for the involvement of facilitators is also that the facilitators are capable to make the

decision whether a start-up is innovative or not (i.e. this is left to the market forces since facilitators are

companies, usually incubators which would naturally select innovative start-ups and those with growth

potential), rather than the immigration authorities (see below on the application assessment process).

The third condition is that the start-up entrepreneur has a step-by-step plan to advance the idea to a

business. The plan will need to include why the company is innovative and outline the idea. The plan

has to describe why the company is innovative and how the entrepreneurs are going to build a

375 https://ind.nl/EN/business/investor-self-employment-start-up/Start-up/faq/Pages/default.aspx 376 http://english.rvo.nl/subsidies-programmes/residence-permit-foreign-start-ups/do-i-qualify/facilitator 377 Kamerstukken (Regulation) II 2014- 2015 30 573 nr. 130, p. 3

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business. There are four elements: i) the entrepreneur needs to focus on his/ her role in the start-up;

ii) idea for the product or service; iii) innovative nature of the start-up; iv) business aspect – i.e. the

steps that the entrepreneur will take to make the idea / product to a successful scalable business.

The exemption of the start-up residence permit to the points-based system is considered an important

element – i.e. whereas any new applicant who applies for a general entrepreneur permit must fulfil the

requirement of 90 points, any startup-visa holder who applies for the general entrepreneur permit

doesn’t need to make any points; he is exempt from that requirement. This is crucial, because the 90

points are seen as very hard to collect.378

Support scheme residence permit for start-up entrepreneurs

There is no support scheme in terms of cash or in-kind incentives, such as a soft-landing package in

the Netherlands. As highlighted above, facilitators (a key requirement for obtaining the residence

permit) are companies, essentially acting as business mentors. Companies can act as facilitators as

long as they are registered in the Trade Register of the Dutch Chamber of Commerce have been

declared to be trusted and qualified. Accelerator programmes and organisations such as Rockstart,

Startup Bootcamp and Impact Hub, as well as educational institutions, investors or 'business angels'

can all assume the role of facilitator379. The facilitator must agree to support the specific needs of the

start-up, for instance by offering help with operational management, marketing, research and/or

investment acquisition.

In the case of Netherlands, the system is left to the ‘market forces’ in a sense that the start-ups will

need to find the facilitator (often incubator) in advance of the application for the residence permit. It is

not clear to what extent potential start-ups are supported or linked to an incubator by the government,

for example through the Start-up Delta. This is a point for further exploration. In some cases facilitators

can provide financing to the start-up. This typically amount to 5-8% of the equity shares and the

facilitator gets his money back (only) if and when the start-up grows substantially in value, by selling

his shares.380


General self-employment permit

Applicants for the general self-employment scheme residing abroad can submit their application for a

residence permit and Regular Provisional Residence Permit (mvv) to the Dutch embassy or consulate

in the country where they are living.

Applicants for the self-employment permit will need to fill in the application form and submit the

supporting documents to the Immigration and Naturalisation Service (IND) which will decide on the

application in consultation with the Enterprise Agency and/or with other relevant national authorities.381

If the application is complete and includes all relevant documents, applicants will be notified of the

official decision within 90 days, however, start-up applications will be given top priority at the IND in

order to ideally process them sooner (the current estimation is 7 weeks).382

With regard to the duration of the residence permits, a third-country national qualifying for the self-

employment scheme will be granted a residence permit to work on a self-employed basis. This

residence permit will be valid for two years, after which the third-country national can apply for an

extension. If the extension is approved, the period of validity will be five years. In order for the period

of validity of a residence permit to work on a self-employed basis to be extended, the person must

demonstrate that they meet the means requirement.

378 Expert input (Jelle Kroes) 379 https://ind.nl/EN/business/investor-self-employment-start-up/Start-up/faq/Pages/default.aspx 380 Ibid 381 https://ind.nl/EN/business/investor-self-employment-start-up/Self-employment/Pages/default.aspx 382 https://ind.nl/EN/business/investor-self-employment-start-up/Start-up/faq/Pages/default.aspx





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Since October 2015, start-up visa applicants are exempt from the entry clearance visa requirement.

This means that they can apply and await the decision on their application in the Netherlands without

having to travel back to their country of origin. Start-up visa scheme was hampered by this mvv

requirement as many start-ups had to interrupt a facilitator programme to travel back to their country

just to collect a visa stamp.383

Start-up entrepreneurs can submit an application for the residence permit for start-up entrepreneurs

directly with the Immigration and Naturalisation Service (IND) using the application form on the

website. Third-country nationals who have a valid residence permit and wish to change their residence

permit to a residence permit for start-up entrepreneurs can also use the application form.384 Once the

complete application for the start-up permit has been filed, the IND informs the Expat centre and

consults the RVO (Netherlands Enterprise Agency). The RVO considers firstly if the facilitator is

trusted and qualified to act as a business mentor to the candidate and secondly if the product or

service the candidate wants to build their business on is innovative. The IND then considers the

application on the basis of this advice.

The RVO gives advice on the facilitator, innovativeness, the step-by-step plan and the entry in the

commercial register.

The residence permit for start-up entrepreneurs is issued for one year. After one year, the start-up

entrepreneur may have the duration of their residence permit extended on the basis of the Dutch

government’s self-employment scheme. Since December 2015, in order to receive a renewal, a written

statement from the facilitator must be obtained that the start-up has performed to ‘satisfaction’ during

the first year of stay.

Table A5.2 Cost of application

Purpose of stay Entry and residence procedure(TEV)

Residence permit without mvv

Extension

Self-employment €1.296 €1.296 €389

Self-employment after a permit for a 'Start-up' €389

Start-up residence permit €311 €311

Residence permit under trade agreements (US, Japan) €1.296

EU Blue Card €881

https://ind.nl/EN/business/investor-self-employment-start-up/Costs-income-requirements/CostsRights granted under the scheme

General self-employment permit Both holders of self-employment residence permit and the residence permit for start-up entrepreneurs are allowed to work in the Netherlands other than to start up an innovative business if the employer has a work permit for employers (TWV). In the Netherlands, employers are generally required to obtain a permission to hire TCNs (TWV) before they can hire employees from outside the EU to work in the Netherlands. This means that the TCN is only allowed to work on a self-employed basis without a TWV to set up a business as submitted for the residence permit.385 With regard to family reunification, entrepreneurs from third countries can bring their family members to the Netherlands under the normal conditions for family reunification. Family members of entrepreneurs are given the same employment status. Initially, no civic integration requirements will be set on immigrant business owners or their family members. Only if they want to apply for a permanent residence permit or want to become a Dutch citizen, the civic integration requirements will apply and will they have to sit a civic integration examination. After having had a temporary residence permit for

383 Jelle Kroes (March 2016), AILA Global Migration Section Digest 384 https://ind.nl/EN/business/investor-self-employment-start-up/Start-up/submit-application/Pages/default.aspx 385 Ibid

https://ind.nl/EN/Documents/7558.pdf

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five years, third-country nationals and their family members can become Dutch citizens. For this, they are subject to the same conditions as all other third-country nationals.386

Residence permit for start-up entrepreneurs Similarly to the general self-employment permit, holders of the start-up entrepreneur permit are allowed to work in the Netherlands for an employer provided that the employer has a work permit for employers (twv). The same conditions to family reunification apply as to the general self-employment permit (See sub-section above)


General self-employment permit

Table A5.3 and Table A5.4 provide an overview of the number of self-employment permits issued from

2008 to 2015. Less than 300 permits for self-employment have been issued over the entire period of 8

years with 30 permits issued on average. The number of refusals has been high and approval rate of

applications are only some 15% on average over the last 6 years.

Table A5.3 Statistics self-employment permit issued (2009-2013)

Year Number of permits issued

2008 20

2009 30

2010 50

2011 50

2012 60

2013 30

Total (2008-2013) 230

Source: Immigration and Naturalisation Service (2013) ‘Skilled Migrants monitor qualitative analysis’387

Table A5.4 Statistics self-employment permit (2014-2015)388

Work as independent 2014 2015

All Nationalities Applications 680 590

Positive decisions 30 30

Rejections 980 520

Other. 80 60

Total processed 1090 610

Share accepted. % 3% 5%

Source: INDiGO/METiS, rounded in tens

386 European Migration Network (2015), The Netherlands National Report ‘Admitting third-country nationals for business purposes’, available at: http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/studies/results/index_en.htm 387 Available at: https://ind.nl/Documents/2013%20Monitor%20Kennismigranten,%20Kwantitatieve%20analyse.pdf

388 The number of processed applications can be higher due to applications in previous years. The category

‘other’ means other completion/ending of the application, either because it was withdrawn by the applicant (if

another type of permit was preferred, the person passed away) or because the application was

cancelled/suspended (for instance the person did not pay the necessary fees).



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Tables A5.5 and A5.6below provide statistics on the self-employment permits issued under the Dutch-

American Friendship Treaty (1956) and the Convention on trade and shipping between the

Netherlands and Japan (1896). The compliance rate of both Japanese and American entrepreneurs is

above 95% and both groups received in practice a decision on their application within four months.

Table A5.5 Self-employment permits issued under NL-Japan trade agreement

Independent NL-Japan trade agreement

2014 2015



Rejections <5 <10

Other. 0 <5




Table A5.6 Self-employment permits issued under US-NL treaty

Independent US-NL treaty

2014 2015



Rejections 10 30

Other. 10 20





With regard to the residence permit for start-up entrepreneurs IND statistics are available for 2015.389

In total 95 applications were submitted in 2015 from which 21 residence permits were granted, 26 are

in progress, 28 were denied and 20 were retracted. Figure 2.1 below provides the number of

applications submitted throughout 2015.

389 https://ind.nl/EN/business/investor-self-employment-start-up/Start-up/Pages/default.aspx

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161

Figure A5.1 Number of applications throughout the year (2015)

IND https://ind.nl/EN/business/investor-self-employment-start-up/Costs-income-requirements/Costs

The table below provides an overview of the nationalities of the entrepreneurs who received the

residence permit. It should be noted that citizens from the United States are exempt from the points-

based system and can take up permits on a treaty basis as highlighted in Section 2.4.1 above. One

potential reason identified for take-up of the residence permit for start-up instead under the Treaty

basis is the lower application cost 311 EUR as opposed to 1,296 EUR under the Treaty-based permit.

Table A5.7 Nationalities of entrepreneurs who obtained the residence permits

Nationality Number of permits granted

United States 6

Russia 4

Canada 3

India 2

FYROM 2

Indonesia 1

Mexico 1

Ukraine 1

Australia 1

IND https://ind.nl/EN/business/investor-self-employment-start-up/Costs-income-requirements/Costs

There are no data yet about startup permit holders who have applied on the basis of the general self-employment scheme.


With regard to the general effects of attracting innovative entrepreneurs, a report was published in

2013 evaluating the effects of attracting entrepreneurs from third countries in the Netherlands.390 The

economic effects of immigration and the effects of foreigners on trade flows and innovation were

examined, especially focusing on the effects of foreigners who are already established in the

Netherlands and have set up a business. It was found that higher educated foreigners and more

390 Panteia (2013). Meer innovatie door buitenlanders?’ [More innovation through foreign migration?]. Available at: http://www.ondernemerschap.nl/sys/cftags/assetnow/design/widgets/site/ctm_getFile.cfm?file=A201214.pdf&perId=670

https://ind.nl/EN/business/investor-self-employment-start-up/Costs-income-requirements/Costs

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diversity (different nationalities) have a positive effect on innovation. Another conclusion of the report

is that cultural diversity as a source for innovation is underused and should be further exploited.

The general self-employment permit has been perceived as rather cumbersome and unpredictable

with a success rate of some 15%. 391 Applications take a long time, with some cases are pending 2

years or longer. The scheme has seen a quite restrictive approach. The system is clogged by

thousands of applications from Turkish nationals who have favourable conditions for application.392

Criteria of the points-based system, such as innovativeness and market potential, however, could

make the allocation of points discretionary rather than automatic. According to one expert, even

numerical elements can become fluid, for example, fewer points might be allocated than available for

a certain threshold amount of invested capital, with the motivation that the available money isn’t spent

fast enough.393

The residence permit for start-up entrepreneurs was introduced on 1st January 2015. The scheme

is a flagship initiative of the government in migration and the scheme has received a lot of attention

and support from the government. The appointment of a Special Envoy, Neelie Kroes, former EU

commissioner is charged with strengthening the international position of start-ups in the Netherlands

and persuading innovative third-country nationals to move their businesses to the Netherlands.

No evaluations have been carried out yet. An evaluation of the scheme is planned for 2017 after the residence permit has been in force for two years. The evaluation will assess, inter alia, how often start-up entrepreneurs make use of the scheme, how many start-up entrepreneurs successfully move on to the self-employment scheme and whether there are any indications of misuse of the scheme.394

As provided in the section above a total number of 95 third-country national submitted applications

with 21 permits granted across 9 nationalities. No publically available information was found on the

investment and jobs created or other positive impacts on the Dutch economy. However, according to

an expert, the main initial impression of the scheme is that the start-up visa in the Netherlands is very

welcome and that it is filling up a need.395

One shortcoming, which was pointed out, was that currently international students are not allowed to

start up a business during their studies which is an obstacle for them to engage in entrepreneurship.

Many successful entrepreneurs have started their business while still in university, thus it could be

potentially beneficial to allow for foreign students to engage in start-ups.396

Another shortcoming identified is that once an entrepreneur has a start-up in the Netherlands and

wants to scale up the business and stay in Europe, this is not really possible as no particular intra-EU

mobility provisions are available. However, according to the web-site of the ‘Start-up Delta’ initiative,

the Netherlands is promoting the roll out of a European start-up visa. At an informal meeting of

Ministers responsible for research and innovation on 27th January 272016 (during the Dutch European

presidency), the Special Envoy Neelie Kroes launched the proposal on a European Start-up Visa

which is yet to be discussed in more details.397

Another potential concern is that facilitators could exploit/take advantage of entrepreneurs who are

dependent on them for renewing the permit as they have also a vested interest when providing

financing to the start-up. However, this is seen as unlikely, because facilitators are selected for their

391 Expert workshop under the project held on 7th March in Brussels 392 https://ind.nl/EN/individuals/residence-wizard/turkish-nationals/Pages/default.aspx 393 Jelle Kroes (March 2016), AILA Global Migration Section Digest 394 European Migration Network (2015), The Netherlands National Report ‘Admitting third-country nationals for business purposes’, available at: http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/studies/results/index_en.htm 395 Documents from an experts meeting on entrepreneurs held at the EC (DG RTD) on 20 May 2015: an informal

discussion paper on the topic and a summary of the meeting 396 Goube, Josephine (2015), “Worldwide start-up visa policies compared”, Migreat. 397 http://startupdelta.org/about/actions

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track records in the previous two years and because the risk of being excluded from the system is

high.

Points-based system under the general self-employment scheme

The table below presents the criteria under the points-based systems of the general self-employment

scheme.398 The points system consists of three parts: (i) personal experience, (ii) a sound business

plan and (iii) the added value of the economic activities for the Dutch economy. A total maximum

score of 300 points can be obtained for all components. At least 90 points are required for a positive

recommendation with at least 30 points must be scored for each component.

[Category] sub-category max. pts breakdown of categories pts

Experience

(30 pts required)

education 40 e.g. Masters degree 30

as entrepreneur 35 e.g. company owner 30

as employee 10 e.g. senior > 5 years 9

in the Netherlands 15 e.g. Dutch client 5

business plan

(30 pts required)

commercial prospects 50 market analysis + clientèle + etc 15

unique selling pt + marketing + etc 25

price 10

organisation 10 e.g. supporting the product 10

financial justification 40 private capital > € 10.000,- 15

sales e.g. > € 125.000,- 10

added value

(30 pts required)

innovation 40 e.g. patents 20

job creation (applicant not

included)

30 general positions 0,5-2 5

" 2-5 10

" 5-10 20

" > 10 30

salary > € 45.000,- 1-3 10

" 3-6 20

" > 6 30

investments 30 assets € 0,- to € 50.000,- 5

assets > € 50.000,- 10

assets > € 100.000,- 20

assets > € 1.000.000,- 30

References

Reports

■ EMN (2015), “Study Admitting third-country nationals for business purposes”, The National

Reports of the study can be found under this link: http://ec.europa.eu/dgs/home-affairs/what-we-

do/networks/european_migration_network/reports/studies/results/economic-

migration/index_en.htm

398 Immigration and Naturalisation Service’s web-site: https://ind.nl/EN/individuals/residence-wizard/work/working-on-a-self-employed-basis

http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/studies/results/economic-migration/index_en.htm






164

■ EMN Ad-hoc query 565. Requirements for Operating a Business Activity available at this link:




■ EMN Annual Policy Reports in particular sections 3.1. on Economic migration available at:


do/networks/european_migration_network/reports/nationalreports/results/index_en.htm


■ MPI (2014), “Policies to support immigrant entrepreneurship” (especially C Immigration and Visa

Policies)

■ OECD (2010), “Open for Business: Migrant Entrepreneurship in OECD Countries”, OECD

Publishing

■ OECD (2014), “The missing entrepreneurs”

■ European Commission (2015), “Discussion paper for the experts meeting on a possible scheme at

European level to attract, retain and support non-EU highly-skilled entrepreneurial innovators,

Brussels, 20 May 2015”, Directorate General for Research and Innovation (unpublished).

■ Presidency discussion paper for the lunch debate during the Informal meeting of Ministers

responsible for research and innovation 27 January 2016, Amsterdam: “Access to talent: a

European visa/permit for start-up founders”

■ Panteia (2013). Meer innovatie door buitenlanders?’ [More innovation through foreign

migration?]. Available at:

http://www.ondernemerschap.nl/sys/cftags/assetnow/design/widgets/site/ctm_getFile.cfm?file=A20

1214.pdf&perId=670

Web-sites

■ Immigration and Naturalisation Service, Start-up scheme explained, available at:

https://ind.nl/EN/business/investor-self-employment-start-up

■ Immigration and Naturalisation Service, Self-employment scheme explained, available at:


■ Start-up Delta http://startupdelta.org/about/actions

■ Netherlands Enterprise Agency, http://english.rvo.nl




http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/nationalreports/results/index_en.htm






http://startupdelta.org/about/actions

http://english.rvo.nl/


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Annex 6 Country Fiche: Spain

Key messages

In 2013 the Spanish Government approved the law on support for entrepreneurs and

internationalisation (Ley de Apoyo al Emprendedor y su Internacionalización, “LAPI”). This law

introduces a new scheme related to international mobility and highly qualified migration.

Amendments were introduced by Law 25/2015.

The goal of the scheme is to attract highly qualified third-country nationals, including

entrepreneurs, who can make a contribution to the Spanish economic growth.

The national scheme includes a specific work and residence authorisation procedure for the

above-mentioned categories. Authorisations are processed by Large Business and Strategic

Groups Unit (hereinafter UGE). These authorisations are not subject to the requirement of the

national labour market test because they are considered as contributing to the economic

growth.

The scheme is based on business demand so that Spanish companies can seek for highly

qualified workers. As stated in the preamble to Law 14/2013, the internationalisation of

enterprises is an important objective. Through the introduction of the national scheme, Spain is

aspiring to move towards new sustainable, smart and talented-based economy. Therefore,

the strategic objectives regarding the entrepreneurs under this scheme are the

following:

Facilitation of the entrepreneurial culture and initiative;

Tax and social security support for entrepreneurs;

Financial support for entrepreneurs;

Business growth and the creation of new jobs; and

Promotion of internationalisation of Spanish companies and economy.


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This section includes an overview of the scheme and analyses the policy context.

Introduction of the scheme

The Entrepreneurial Support and Internationalisation Act (hereinafter Law 14/2013)399 of 27

September 2013 on support for entrepreneurs and their internationalisation, within the Title V

dedicates Section 2 of Title V to "International mobility”. This section has a twofold aim: (i) to support

economic growth through the internationalisation of Spanish companies, including the attraction of

foreign talents; and (ii) to facilitate the entry and stay of highly skilled migrants in Spain for reasons of

economic interest.

This national scheme introduced under the Law 14/2013 covers four categories of third country

nationals, for whom the legislation facilitates entry and/or stay in Spanish territory on grounds of

economic interest:

■ Investors;

■ Entrepreneurs;

■ Highly qualified professionals; and

■ Researchers.

The rationale behind this scheme is to eliminate the barriers to third country nationals (including entrepreneurs) and to increase investment in business ventures to boost the Spanish economy.

Policy context

Until 2012, the Spanish immigration policy was primarily focused on managing the migration flows with

no particular emphasis on economic internationalisation400. The need to internationalise the Spanish

economy, boost the presence of highly skilled third country workers and attract foreign investment to

Spain determined the need of an assessment of the Spanish immigration policy in 2012. This

assessment was carried out by a multidisciplinary team composed by representatives of the Ministry of

Employment and Social Security, the Ministry of Interior, the Ministry of Foreign Affairs and

Cooperation, including the Ministry of Economy and Competitiveness.

The evaluation identified the main challenges of the immigration regulation. For instance, the main

challenge identified for temporary residence and self-employed permits was the limited intra-mobility

within Spain because the activity of entrepreneurs was limited to a specific geographic area (e.g

autonomous region in Spain) and to a specific activity.401 After the identification of the areas to be

improved, the need to attract entrepreneurs by investing and creating new jobs was put forward as a

key solution to positively boost the Spanish economy.

Under the Organic Law 4/2000 (Blue Card scheme)402, a few barriers about third country nationals

becoming entrepreneurs were identified. These include:

■ Foreigner entrepreneurs were required to apply for a work permit for self-employed workers. This

permit was a double permit: work and residence. The duality of the scheme created significant

barrier (mainly due to the geographical limits across Spain of the permits and to the specific sector

of the business activity).There was no requirement for a business plan or the feasibility of the

business projects. Lack of business plan increased the uncontrolled establishment of foreign

entrepreneurs. Many businesses did not correspond to the need of the Spanish market and to

economic growth. The scheme was not tailored to the economic needs.

399 Ley 14/2013 http://noticias.juridicas.com/base_datos/Fiscal/513755-l-14-2013-de-27-de-sep-apoyo-a-los-emprendedores-y-su-internacionalizacion.html (Accessed on 18 February 2016) 400 EMN (2014) Admitting third-country nationals for business purposes. 401 Ibid. 402 Under the Blue Card scheme in Spain, the foreign entrepreneurs could apply for self-employment permit

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167

■ There was no requirement for determining the link between the business plan and the economic

interest.

Moreover, in 2007-2008 the “Open for Business” study report published by the OECD revealed that

Spain had one of the lowest rates of entrepreneurship among its third-country nationals, compared to

other European countries. In light of the foregoing, a new scheme was adopted through the Law

14/2013, introducing more flexible criteria in order to attract categories of economic interest for Spain,

including entrepreneurs403.

Due to the specific categories it governs (point 1.1.1), the new law co-exists with the general

immigration policy in Spain and aims to foster the entry of investment and talent through quicker

procedures which stimulate sustainable and smart economic growth (in compliance with the Europe

2020 Strategy)404.

In its 2014 International Migration Outlook405, the OECD acknowledged the importance of the new

scheme introduced by Spain, notably in supporting business internationalisation and promoting

economic growth.


As a general rule, any third-country national who intends to start an entrepreneurship activity in Spain

can do so in one of the two following ways406:

■ If the business activity involves activities of special economic interest, they can benefit from the

provisions of Law 14/2013 on support for entrepreneurs and their internationalisation; or

■ For all other self-employment activities, they must submit the application under Organic Law

4/2000 on the rights and freedoms of foreign nationals in Spain and their social integration, and in

its supporting regulations, approved by Royal Decree 557/2011407.

The main difference between the entrepreneur permit under Law 14/2013 and the residence and self-

employment permit under Organic Law 4/2000 lies in the innovative nature and specific economic

interest that the entrepreneurial activity must offer to Spain408.

The national scheme under Law 14/2013 is designed to eliminate the obstacles for foreign

entrepreneurship and to establish a regulatory framework that is conducive to this entrepreneurial

activity. It introduces a flexible and fast application procedure with a single authority by Large

Business and Strategic Groups Unit (UGE). However, the same procedure of access to nationality

and/or long-term residence remains. In addition, the general requirements for stay and residence of

foreign nationals in Spain apply to holders of the national permit.

The attraction of foreign entrepreneurs is not subject to quotas. However, the national scheme

remains selective, requiring prior evaluation of business activity's special economic interest by the

Ministry of Economy and Competitiveness409.

Under both schemes, the third country national, must be over 18 years old and satisfy the following

requirements410:

403 Ministry of Employment and Social Security (2015), Report on the Implementation of the International Mobility Section of the Entrepreneurial Support and Internationalisation Act of 27 September 2013, page 6. 404 EMN (2013) Annual Immigration and Asylum Policy Report: Spain. 405 OECD (2014) report on International Migration Outlook. Available at http://ekke.gr/ocd/wp-content/uploads/2014/12/SOPEMI-2014-E.pdf (Accessed on 19 February 2016) 406 EMN (2014) Ad-Hoc Query on Requirements for operating a business activity, page 2. 407 Royal Decree 557/2011 of 20 April (BOE 30 April), regulates the employment of foreigners in Spain within the scope of the development of applicable legislation in this area (Law 4 / 2000, as amended in 2009 to adapt to European Union guidelines). Available at: http://extranjeros.empleo.gob.es/es/ContenidosHOME/Derecha/InformacionInteres/documentos/BOE-A-2011-7703.pdf (Accessed on 18 February 2016). 408 Ibid. 409 EMN (2014), Study on admitting third-country nationals for business purposes, page 4.

http://ekke.gr/ocd/wp-content/uploads/2014/12/SOPEMI-2014-E.pdf


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168

■ Being present on the Spanish territory regularly;

■ Providing evidence of no criminal record in the last five years, either in Spain or in their former

countries of residence for the last five years, for offences stipulated in Spanish law;

■ Complying with security checks under Law 14/2013, on the prevention of money laundering and

the financing of terrorism;

■ Fulfilling the Tax and Social security obligations;

■ Not being listed as someone rejected in the countries with which Spain has agreements;

■ Paying the temporary residence permit processing fee; and

■ Having a public or private health insurance policy.

The full overview of the criteria under each scheme is provided in Table A6.1 below:

Table A6.1 Conditions of the residence permit for entrepreneurs

Organic Law 4/2000 (Blue Card)

Law 14/2013 (National scheme)411

Nature of the

scheme

Traditional self-employed

residence permit

Specific scheme dedicated to start-ups or other

innovative businesses

Requirements

for HSW,

intending to

enter and start

a business in

Spain

Criteria for

granting a

residence

permit

The general criteria

applicable to the applicant

are:

To be over 18 years old;

Being present on the

Spanish territory regularly;

Providing evidence of no

criminal record in the last five

years, either in Spain or in

their former countries of

residence for the last five

years, for offences stipulated

in Spanish law;

Complying with security

checks under Law 14/2013,

on the prevention of money

laundering and the financing

of terrorism;

Fulfilling the Tax and Social

security obligations;

Not being listed as someone

rejected in the countries with

which Spain has

agreements;

Paying the temporary

residence permit processing

fee; and

Having a public or private

health insurance policy.

In addition to the general

The general criteria applicable under this

scheme are the same as under the Blue Card.

Specific criteria for each categories are provided

by different provisions of the law:

Entrepreneurs.: Art.68 , 69 70

Under these provisions, the third country

national, intending to start an entrepreneurial

activity in Spain, has to satisfy the following:

Prove that the activity is innovative and of

special economic interest for Spain

Job creation(no minimum or maximum

condition set);

Provide a business plan (to be evaluated by

the Ministry of Economy and

Competitiveness);

The added value for the Spanish economy,

including innovation or investment

opportunities.

There is no minimum financial requirement

for project of economic interest. They are

analysed on a case by case basis.

2nd options:

Investors: Art 63.1c

Non-resident foreign nationals intending to enter Spain for the purpose of making a significant capital investment may apply for a visa. For a capital investment to be considered as

410 Law on Visas for Entrepreneurs. Available at: http://www.exteriores.gob.es/Consulados/CIUDADDELCABO/en/InformacionParaExtranjeros/Pages/Law-on-Visas-for-Entrepreneurs.aspx (Accessed on 22 February 2016). 411 Ministry of Employment and Social Security http://prie.comercio.es/es-ES/Paginas/Emprendedores.aspx

http://www.exteriores.gob.es/Consulados/CIUDADDELCABO/en/InformacionParaExtranjeros/Pages/Law-on-Visas-for-Entrepreneurs.aspx


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169



criteria highlighted above,

the following conditions

should also be satisfied by

the applicant

(entrepreneur)412:

Meet the business opening

and working requirements;

Have the necessary

qualifications legally

required (3 years of studies

and/or 5 years of

professional experience);

Create new jobs (no

minimum or maximum

condition set);

Proof of sufficient financial

resources to support

themselves and to pay for

accommodation;

significant, the applicant must prove:

A business project intended to be carried out in

Spain that is deemed and proved to be of

general interest , being necessary to be

considered as such the fulfilment of one of the

following conditions:

1st The creation of jobs

2nd. The investment will have a relevant

socio-economic impact in the geographical

area in which the activity will be carried out.

3rd. A significant contribution to scientific

and/or technological innovation.

The applicant need to obtain a favourable

report on the business plan to carry out in

Spain. This report is awarded by the Spanish

Economic and Commercial Office (SEC).

(*) It shall also be understood that a foreign

national applying for a visa has made a

significant capital investment when the

investment is carried out by a legal person

Visa/permit Any third country national, not

residing in Spain, who intends

to become self-employed

should submit the application

for a temporary residence

and self-employment permit.

The temporary residence and

self-employment permit is

valid for one year. This permit

is limited to a particular

geographical area and to a

particular sector of activity.

Important: Before applying for visa or permit,

they need a favourable report on the business

plan to carry out in Spain. This report is awarded

by the Spanish Economic and Commercial

Office (SEC). If the business plan is approved,

he/she obtains a report on Entrepreneurial

Activity of Interest.

Any third country national, seeking entry or

residence in Spain and willing to start up a

business activity of economic interest, may apply

for a one-year residence visa.

After the first year, and once the business has

been started, the entrepreneurs may apply for a

residence permit without having to apply for a

visa or the previous minimum stay period. This

permit is valid for two years, renewable.

Any business residence permit obtained under

this national scheme, is valid throughout the

whole Spanish territory.

Entrepreneurs may apply for a residence permit

regardless of their physical presence in Spain.

Their situation is analysed on a case-by-case

basis by the Ministry of Employment and Social

Security.

Investors:

412 Ibid.


170



Before applying for visa or permit, they need a

favourable report on the business plan to carry

out in Spain. This report is awarded by the

Spanish Economic and Commercial Office

(SEC). If the business plan is approved, he/she

obtains a report on Entrepreneurial Activity of

Interest.

Non-resident foreign nationals intending to enter

Spain for the purpose of making a significant

capital investment may apply for a stay visa or,

where applicable, a residence visa for investors

with one year validity.

The issuance of an investor residence visa shall

be legally sufficient to reside and work in Spain

during its validity

Investors may apply for a residence permit

without having to apply for a visa or the previous

minimum stay period.

This permit has is valid for two years, renewable

(5 years period).

Competent

authority

The permit application should

be submitted at the Spanish

Consular Office in the country

of origin or of residence.

The visa application is assessed by the

Spanish Economic and Commercial Office

(SEC) in the same area where the visa is

requested.

The residence permit is evaluated by the

General Directorate for International Trade and

Investment (so called DGCOMINVER).

Requirements for HSW

already residing or staying

in Spain and intending to

start a business

A permit is granted to third

country nationals intending to

start, carry out a business

activity, if in addition to the

general criteria, they also

meet the following conditions:

They must have done so

for a minimum period of

three years.

Holders of a residence

permit must have

remained in this situation

for at least one year.

A business residence permit may be granted to

third country nationals, who are seeking to start,

carry out or conduct an economic activity as an

entrepreneur, without having to obtain an

additional work permit.

The steps to follow:

Request a business plan format to the

Directorate-General for Trade and Investment

– (Unidad de Grandes Empresas y Colectivos

Estratégicos (UGE-CE);

Submit the business plan to the Spanish

Economic and Commercial Office (Secretaría

de Estado de Comercio)

10 days (maximum) for a decision on the

business plan. (page 8)

If the business plan is approved, a report on

Entrepreneurial Activity of Interest is awarded

(giving right to apply for residence permit).

Source: Based on the EMN studies (2014)


171

Admission criteria

The national scheme (Law 14/2013) introduces flexible criteria to facilitate the entry and residence in

Spain of foreign entrepreneurs. The flexibility is considered to be one of the key achievements of this

scheme. These criteria apply to all the categories of beneficiaries and include the following413:

■ The labour market test is not needed;

■ Foreign nationals holding visas do not need to obtain an Identity Card for Foreign Nationals; and

■ The simultaneous application for a permit for residence and work by family members (spouse, or

person with similar relationship (common law partner) and any children under the age of 18 or

those older than 18 objectively incapable to support themselves) and dependent ascendants is

possible.

The full overview of the comparable criteria under each scheme is provided in Table A6.2 below:

Table A6.2 Distinctive elements between the Blue Card and the national scheme

Criteria Blue Card National scheme

Application

procedure

Lack of flexibility. The labour

market test is applied largely in

the recruitment process of

HQW.

Flexible recruitment - no labour market test applied, nor

specific salary threshold.

Permit

procedure

45 working days after lodging

the application before the

competent authority.

20 day period after submitting the application before the UGE.

One specific procedure for all categories of the law (investors,

entrepreneurs, highly qualified works, researchers.

Duration of the

permit

On year, renewable. One year, renewable for two-year period.

The residence permit may be renewed even when there are

absences over six months per year in the case of residence

visas and permits for investors or workers of companies that,

conducting businesses abroad, have their base of operations

in Spain.

Processing

authority for

permit

Processing authority is

generally the Immigration

Office. For large companies,

the UGE was involved.

One specialised unit (Large Business and Strategic Groups

Unit (UGE) that process all permit residence applications.

Intra-EU

mobility

There are provisions in favour

of EU-intra mobility.

Provisions in favour of international mobility and economic

growth.

Specific

categories

No provisions for investors,

entrepreneurs and students

It includes specific provisions for investors, entrepreneurs,

students and intra-corporate workers.

Source: ICF

Moreover, the national scheme allows the possibility to shift from one status to another between

different types of permits when the third-country nationals has already legally resided in Spain. For

instance, of a particular interest is the shift between the statuses of students of business schools to

entrepreneurs414. Young self-employed workers can benefit from reductions of social security

contributions415. In the same vein, workers at risk of long-term unemployment are eligible to receive

413 EMN (2013), Annual Immigration and Asylum Policy Report – Spain. 414 Spain is home to a number of leading international business schools that are increasingly including more entrepreneurship in their programmes. In general, master's courses last for one or two years so, because of the requirement of having studied in Spain for at least three, they were unable to stay to start their own businesses. As a result, Spain suffered from the problem of talent retention. Currently, under the national scheme, foreign students, after having successfully accomplished one of the well-known business school in Spain ca start their own business and change their status from students to entrepreneurs. 415 OECD (2015), Skills Strategy Diagnostic Report: Spain, page 187.


172

unemployment benefits while being self-employed. The unemployment benefits can be claimed as a

lump sum to cover the costs of receiving specific training or starting a new company. In addition,

corporate income tax are reduced for the first two years of a new company416. The admission criteria

for entrepreneurs under the national scheme are illustrated in the table below:

Table A6.3 The admission criteria for entrepreneurs

Admission criteria

National scheme EU Blue Card417

Specific requirements

Entrepreneur Self-employer418

Education and

professional skills

Applicants must meet the legal

requirements that are necessary to

start the activity (as is the case for

Spanish nationals).

These requirements are laid down in

the relevant sector-specific

legislation and may demand a

particular professional qualification

for the performance of the activity in

the case of regulated professions.

Proof of the necessary skills or experience to do the

work (3 years of educational experience of 5 years of

professional experience).

Proof of

entrepreneurial

experience

Obtaining a visa or permit for

entrepreneurs rely on the positive

evaluation report in which the

applicant's professional profile is

assessed.

Evidence of licence or registration required to carry out

the work in Spain.

Proof of capital No minimum capital needed for

entrepreneurial activity. This is

assessed by the Ministry of Economy

and Competitiveness on a case-by-

case basis.

Evidence of necessary financial means (e.g. bank

statements). The minimum financial threshold should

be: € 3,005.06

Evidence of

investment

No applicable. Start-ups must

financially sustain themselves.

Not applicable. Start-ups must financially sustain

themselves.

Incubator

programme

Not applicable Applicable. This involve finding an accountant or

'Gestor' to support the applicant with the more in depth

paperwork.

Contribution to

the economy /

employment in

Spain

In order to obtain an entrepreneur

visa/permit, a report previously

drafted by the Ministry of Economy

and Competitiveness (SEC) in which

the activity’s innovative nature and its

special economic interest for Spain is

required.

The innovation and the investment

opportunities are also considered.

The priority sectors for

entrepreneurship include the sectors

that are job-creation-intensive or

which provide added value to the

The potential to create employment is also be

assessed prior obtaining the permit. The job creation

should be in the economic interest for Spain.

416 Ibid 417 http://www.expatica.com/es/visas-and-permits/Moving-to-Spain-Guide-to-Spanish-visas-and-permits_102354.html (Accessed on 24 February 2016) 418 There are two ways as self-employed in Spain:

1. Establish as a self-employed person (autonomo). It’s quick and easy to set up as an autonomo and pay tax through the personal income tax system.

2. Establish as a limited company, the most common form of which is the sociedad limitada or SL. There is no personal liability with an SL but there are additional tax, accounting and other responsibilities.

http://www.expatica.com/es/visas-and-permits/Moving-to-Spain-Guide-to-Spanish-visas-and-permits_102354.html

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173

Admission criteria


Spanish economy (e.g. ICT,

engineering).

Business plan A business plan is required to

support the granting of the

visa/permit.

The business contains several

elements on the feasibility of the

proposed activity, considering the

market situation and the objectives of

the undertaking. Elements of the

business plan include:

Legal aspects (e.g. corporate

structure and mission, liability,

staff and details on the location);

A business project (e.g. business

profile, investment plan,

profitability forecast, perspectives

of employment, growth);

A market analysis and marketing

strategy.

The assessment of the business

activities is done on a case-by-case

basis.

A business plan is required. It is not necessary for IT

related companies. These business plans/styles

include Sole Proprietor (Autónomo), Partnership

(sociedad civil), Public Limited Company (Sociedad

Anónima).

■ The business plan comprises:

Business concept, describing the business, its

product and the market it will serve.

Financial features, highlighting the important

financial points of the business including sales,

profits, cash flows and return on investment.

Financial requirements, clearly stating the capital

needed to start the business and to expand.

Details about the business, providing relevant

information about the company, its legal form of

operation, when it was formed, the principal

owners and key personnel.

Market strategy, providing an indication of the

growth potential within the industry.

■

Procedural documents

Fees Yes, this is a requirement in order to

proceed with the application.

€60 for visa application.

As a general rule:60€ except when reciprocity criteria

are applicable

Depending on the consulate/embassy where the

application is lodged.

Time for

processing the

application

30 days in total.

The procedure is streamlined and is

characterised by:

Visas are processed within 10

working days

Residence permits within 20

days;

Centralised approach with a one-

stop service centre and

specialised staff: Large

Companies and Strategic Groups

Unit.

90 days in total.

Visa: 45 days

Permit: 45 days after submitting the application

before the competent authority has elapsed, in case

there is no resolution, the application in considered to

have been denied due to administrative silence

Duration of visa

and /or residence

permit

Visa for entrepreneurs: 1 year.

Residence permit for entrepreneurs:

2 years.

Permit: 1 year limited to a specific geographic area.

The work permit is renewable for a maximum period

of 2 years. Spanish labor authorities could limit this to

a specific geographic area and/or a specific activity.

The self-employer obtain a Foreign Identification Card

at the Provincial Foreign Affairs Office (Oficina de

Extranjeros) or at the Police Department where

he/she resides.


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Admission criteria


After five years the sell-employer can apply for long-

term residence.

Source: Implementation report on the national scheme - Ministry of Employment and Social Security

2015


National scheme (Law 14/2013)

The application procedure under the national scheme (Lay 14/2013) is simplified with the aim to

increase the recruitment of talented third-country nationals and attract foreign investment to Spain. In

this regard, the residence permit is managed under a single procedure. This is done in compliance

with the requirement of Directive 2011/98/EC419 on a single application procedure for a single permit

for third-country nationals to reside and work in the territory of a Member State.

Moreover, the overall application process is speeded up: visa application is processed within 10

working days (Page 6) and residence permit within 20 working days. The processing is done

through a special unit –UGE. The visa applications are lodged at the Spanish Consulate in the country

of origin or of residence, whereas the residence permits are lodged with the Large Companies and

Strategic Groups Unit (UGE).

The application of visa and or/residence permit is accompanied with the necessary documents (as

outlines in Table 1.2 above) and the costs to be adequately performed. For instance, the fee required

to proceed with visa application is €60.

The authorities responsible for attracting entrepreneurs within the ambit of Law 14/2013, are the

following420:

■ The Business Office of the geographical area, where the applicant submits a visa application, or

the General Directorate for International Trade and Investment for evaluating a report on the

interest of the entrepreneurial activity.

■ The Ministry of Foreign Affairs and Cooperation is the competent body for delivering the visas

(for applicants outside Spain).

■ The Large Companies Unit of the Ministry of Employment and Social Security is the

competent authority for issuing the residence permits.

■ The Ministry of Interior is responsible for checking the public order related matters.

Blue Card scheme

Under this scheme, the self-employer should apply for a work and residence visa at the Embassy or

Consulate in the country of origin421. This allows the self-employer to enter Spain for the purpose of

carrying out self-employed activities.

Once the visa is obtain, o register as self-employed, the applicant need to sign up at the Tax Office

(Hacienda), providing them information including the Foreigner’s Identity Number number (NIE)422.

The self-employer is obliged to charge Value Added Tax on goods and services (Impuesto sobre el

419 Directive 2011/98/EU of the European Parliament and of the Council of 13 December 2011 on a single application procedure for a single permit for third-country nationals to reside and work in the territory of a Member State and on a common set of rights for third-country workers legally residing in a Member State, OJ L 343, 23.12.2011, p. 1–9 420EMN (2014), Study on Admitting third-country nationals for business purposes, page 20. 421 https://internationalliving.com/countries/spain/spain-visa-and-residency-information/ (Accessed on 23 February 2016). 422 Start a business in Spain http://www.spainexpat.com/spain/information/start_a_business_in_spain/#plan (Accessed on 24 February 2016).

https://internationalliving.com/countries/spain/spain-visa-and-residency-information/

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175

Valor Añadido, IVA) between 4-21%. The tax rules are governed by different plans (regímenes)

depending the type of business. All third-country nationals, must have a NIE (Número de Identificación

de Extranjero) or NIE. This is essential for any financial transaction in Spain, including opening a bank

account, being paid for employment, paying taxes423. The self-employer also need to obtain a license

and permit from Municipality (ayutamento) and Regional Governments (comunidad autónoma).

Under this scheme, it is possible to include the business in a “Visitors Book” (Libro de Visita)424. The

access to this book is granted by the General Directory of the Province, part of the Ministry of

Labour and Social Security425.

Rights granted under the national scheme

Under the national scheme, there are a set of rights granted to foreign investments, as illustrated

below:

■ Labour market access rights: Labour market access is not applicable under the new scheme.

The innovation of the new scheme is the removal of the market access. This criteria was

considered as burdensome by the evaluators and third country nationals. Therefore, the need for

revision became even more important.

■ Family reunification rights: The national scheme allows the simultaneous application for a permit

(for residence and work) by family members (spouse, partner, and dependants, including children

under 18 and parents over 65).

■ Procedural facilitation: The application procedure: visa + residence permit is streamlined and

become much faster. Under the national scheme, the criteria correspond better to the needs of

boosting the Spanish economy and facilitating the entrance of foreign entrepreneurs.

■ Equal treatment: The national scheme also recognises the principle of equal treatment among

legally resident HQW with respect to access to social services and benefits, whether basic or

specific


More than a year since the entry into force of the national scheme (Law 14/2013), the total number of

visas and permits issued for entrepreneurs amounts to 82. This number is lower than the number of

permits granted for other categories such as: highly qualified professionals (1,231) and researchers

(369) and investors (907).

The estimated value of entrepreneurial activities until the end of 2014, was considered to be approximately €234 million426. It is also estimated that a total of 2,624 jobs will be created in the

forthcoming years thanks to these entrepreneurial activities of special economic interest for Spain427.

Until December 2014, 91 reports on entrepreneurship activities were awarded. Out of these 91

favourable reports, 73 were issued by the Directorate General for International Trade and 18 were

issued by the Economic and Trade Offices. By destination province, Madrid and Barcelona represent

more than two-thirds of the reports awarded on entrepreneurial activities. Madrid was the first

destination, with 37 residence permits, followed by Barcelona with 27 permits of the total. The full

overview is illustrated in Table A6.4 below.

423http://www.exteriores.gob.es/Consulados/MIAMI/en/InformacionParaExtranjeros/Pages/Visa%20Requirements/Visa-for-Investors.aspx (Accessed on 23 February 2016). 424 Ibid 425 http://www.expatica.com/es/visas-and-permits/Work-in-Spain-Guide-to-Spanish-work-visas_103258.html (Accessed on 23 February 2016). 426 Discussion paper for the experts meeting on A possible scheme at European Level to attract, retain and support the non-EU Highly Skilled entrepreneurial innovators 20 May 2015. 427 Ibid, page 25.

http://www.exteriores.gob.es/Consulados/MIAMI/en/InformacionParaExtranjeros/Pages/Visa%20Requirements/Visa-for-Investors.aspx

http://www.exteriores.gob.es/Consulados/MIAMI/en/InformacionParaExtranjeros/Pages/Visa%20Requirements/Visa-for-Investors.aspx

http://www.expatica.com/es/visas-and-permits/Work-in-Spain-Guide-to-Spanish-work-visas_103258.html


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Table A6.4 Entrepreneurship reports by destination province

Province Number of reports awarded

Madrid 37

Barcelona 27

Other 27

TOTAL 91

Source: Data of the Ministry of Economy and Competitiveness 2014

As regards the distribution of entrepreneurship reports by economic sector, 95.6% of the reports were

awarded in services sector (including mainly ICT), 2.2% in the agricultural sector and only 1.1% on the

industry and the construction sector. The full overview is provided in the table below.

Economic sector Reports awarded % of total

Services (ICT) 87 95.6

Agriculture 2 2.2

Industry 1 1.1

Construction 1 1.1

TOTAL 91 100

Source: Data of the Ministry of Economy and Competitiveness 2014

Data from the Ministry of Employment and Social Security illustrated that the total labour population

(employed and self-employed persons) amounted to 16,420.9 million in 2014428, of which 1,532,685

were third-country nationals. 7.3% of total foreign workers were entrepreneurs429.

2015 was a successful year for foreign start-ups in Spain. In technology sector 2,638 start-ups were

created mainly in Barcelona (26%), followed by Madrid (27%) and Valencia (14%)430. The main

sectors attracting the investment of international capital were Mobile Market Places FinTech and

specialised software (such as CartoDB, Typeform and UserZoom).

In May 2014, there were over 234,000 third-country free lancers in Spain. This number representedan

increase by 6, 2% compared to the same month in 2013431. Overall, 13,000 out of 70,000 new

businesses were started by a foreigner in 2014. According to the data of the National Federation of

Associations of Freelancers (ATA) in June 2014, Bulgarians, Moroccans and Italians represented the

highest entrepreneurship rate432.


The press has recognised the positive effects of the national scheme in attracting foreigner

entrepreneurs and boosting Spanish economy via the creation of approximately 800 new jobs433 linked

428 Ministry of Employment and Social Security (2014) Available at: http://www.empleo.gob.es/es/estadisticas/resumenweb/RUD.pdf (Accessed on 23 February 2016). 429 Osorio, M., Urquiza, A. y Rodríguez, R. (2015). Value contribution of immigrants to society through entrepreneurship. Journal for Educators, Teachers and Trainers, Vol. 6(2), pp. 101–112. 430 Mobile World Capital Barcelona (2015), Entrepreneurship in Spain in 2015: a year to remember. Available at: http://mobileworldcapital.com/entrepreneurship-in-spain-in-2015-a-year-to-remember/ (Accessed on 22 February 2016). 431 Welfare Society Territory (2014), Spain’s boom in immigrant businesses – Available at http://www.west-info.eu/spains-boom-in-immigrant-businesses/ (Accessed on 22 February 2016). 432 ATA (2014), Los extranjeros son una de cada cinco altas en autónomos – Available at: http://www.ata.es/prensa/noticias/los-extranjeros-son-una-de-cada-cinco-altas-en-autonomos#sthash.Ay8ywzkP.dpufhttp://www.ata.es/prensa/noticias/los-extranjeros-son-una-de-cada-cinco-altas-en-autonomos (Accessed on 23 February 2016). 433 Expansion press http://www.expansion.com/agencia/efe/2014/07/13/19723990.html (Accessed on 23 February 2016).

http://www.empleo.gob.es/es/estadisticas/resumenweb/RUD.pdf

http://mobileworldcapital.com/entrepreneurship-in-spain-in-2015-a-year-to-remember/

http://www.west-info.eu/spains-boom-in-immigrant-businesses/


http://www.ata.es/prensa/noticias/los-extranjeros-son-una-de-cada-cinco-altas-en-autonomos


http://www.expansion.com/agencia/efe/2014/07/13/19723990.html


177

to investment or business ventures. Moreover, the press also includes the positive feedback that the

scheme has received from various businesses. The success of the Spanish national scheme has also

retained the attention of international press. The New York Times published an interesting article

highlighting the improvement introduced in Spain through the adoption of Ley 14/2013434.

The positive impact of the national scheme was also underlined in two reports: the Implementation

Report on the Status of the Implementation of Section 2 of Title V of Law 14/2013, of 27 September 435

(i), published one year after its adoption, and in the index report produced by the OECD 2014436 (ii)

comparing the sectors in Spain in relation to other OECD countries in relation to the

internationalisation of the economy.

Strengths and weaknesses of the national scheme

The report by the Ministry of Economy and Competitiveness from September 2014 to December 2014, identified a set of strengths and improvements of the national scheme. According to the latest OECD Services Trade Restrictiveness Index (STRI) in 2014437, barriers to movement of foreign entrepreneurs in Spain, have changed from being very significant to being minimal (it had a lower STRI score than the average in 15 of the 18 sectors analysed)438. From the above, assessments of Spain's experience in attracting entrepreneurs bring the following strengths and improvements to light.

Table A6.5 Assessment of the national scheme

Strengths of the national scheme in attracting foreign entrepreneurs

The establishment of an inter-ministerial network, with the participation of the Ministry of

Economy and Competitiveness (State Secretariat for Trade and Invest in Spain), the Ministry of Employment

and Social Security, the Ministry of the Interior and the Ministry of Foreign Affairs and Cooperation.

The possibility of status changes from one permit type: e.g. from business-school students/ to entrepreneurs are

particularly significant.

The flexibility of admission procedures, proved to improve the Spanish economy’s competitiveness.

The reduction in processing times, which result in time and cost savings when implementing projects.

The centralisation of permit procedures in a specific unit, namely the Large Companies Unit (UGE). This

ensures a balanced and coordinated processing through Spain.

The case-by-case analysis of applications by the Ministry of Economy and Competitiveness, from a commercial

angle, allowing the specific, individual features of each investment or business project to be taken into account

in terms of requirements and processing times.

The absence of a minimum amount of investment is considered positive.

Spain has made an effort to open itself up towards the foreign entrepreneurship. However, a few

challenges were identified439:

■ Lack of Spanish language as key challenge to operate in Spain;

■ Immigration rules and procedures still poses practical problems in attracting foreign entrepreneurs;

■ The majority of foreign entrepreneurs are male;

■ Access to finance and costs of a new enterprise (a large part of immigrants receive financial

support from their families and friends)

434 New York Times http://www.nytimes.com/2014/11/23/business/international/at-spains-door-a-welcomemat-for-entrepreneurs-.html?hp&action=click&pgtype=Homepage&module=secondcolumn-region&region=top-news&WT.nav=top-news (Accessed on 23 February 2016). 435 Ministry of Employment and Social Security (2015), Report on the Implementation of the International Mobility Section of the Entrepreneurial Support and Internationalisation Act of 27 September 2013 436 OECD (2014), International Migration Outlook 437 OECD (2014), Services Trade Restrictiveness Index (STRI): Spain 438 Ibid 439 EMN (2014) Admitting third-country nationals for business purposes, page 26.

http://www.nytimes.com/2014/11/23/business/international/at-spains-door-a-welcomemat-for-entrepreneurs-.html?hp&action=click&pgtype=Homepage&module=secondcolumn-region&region=top-news&WT.nav=top-news




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Promotion of the scheme

The promotion of the national scheme has been done through various channels. For instance, a

website was created for the Residence Programme for Investors and Entrepreneurs (Programa de

Residencia para Inversores y Emprendedores, PRIE)440. This website was set up by the State

Secretariat for Trade with the joint participation of the Ministries of Employment and Social Security,

Foreign Affairs and Co-operation and Economy and Competitiveness. The PRIE website provides

useful information in five different languages (English, Spanish, Portuguese, Russian and Chinese).

The information include441:

■ General aspects of the PRIE;

■ Issues specific to each category – investors, entrepreneurs, highly qualified staff, researchers and

intra-corporate transfers;

■ The persons eligible to apply for visa and/or permits

■ The application procedure, depending on whether the foreign national is already residing in Spain

or if he/she currently resides outside the country.

■ The type of document can be requested (i.e. visas from the Spanish Consulate, permits from the

UGE, etc.).

In addition, with the aim to increase awareness about the possibilities to attract third country nationals’

entrepreneurs, certain actors play a proactive role in promoting the necessary information: promoting

the information442:

■ National and regional public agencies, such as Invest in Spain, Invest in Madrid, Madrid

Emprende and Barcelona Activa.

■ Private institutions:

– Business sector (e.g. Confederación Española de Organizaciones Empresariales (CEOE),

Foro Español de Expatriación (FEEX) and etc.):

– Law firms, administrative agents and venture capital funds.

– Network of consulates, trade offices and immigration offices.

– Universities and leading business schools (e.g. IE, IESE, ICADE, etc.).

References

■ ATA (2014), Los extranjeros son una de cada cinco altas en autónomos – Available at:

http://www.ata.es/prensa/noticias/los-extranjeros-son-una-de-cada-cinco-altas-en-

autonomos#sthash.Ay8ywzkP.dpufhttp://www.ata.es/prensa/noticias/los-extranjeros-son-una-de-

cada-cinco-altas-en-autonomos (Accessed on 23 February 2016).

■ Directive 2011/98/EU of the European Parliament and of the Council of 13 December 2011 on a

single application procedure for a single permit for third-country nationals to reside and work in the

territory of a Member State and on a common set of rights for third-country workers legally residing

in a Member State, OJ L 343, 23.12.2011, p. 1–9

■ Discussion paper for the experts meeting on A possible scheme at European Level to attract,

retain and support the non-EU Highly Skilled entrepreneurial innovators 20 May 2015.

■ EMN (2013), Annual Immigration and Asylum Policy Report – Spain.

■ EMN (2014) Ad-Hoc Query on Requirements for operating a business activity.

440 Ministry of Employment and Social Security - Residency Programme for Investors and Entrepreneurs (PRIE) http://prie.comercio.es (Accessed on 18 February 2016). 441 Ibid 442 Report on the Implementation of the International Mobility Section of the Entrepreneurial Support and Internationalisation, page 39.



http://prie.comercio.es/


179

■ EMN (2014) Admitting third-country nationals for business purposes.

■ EMN (2014), Study on admitting third-country nationals for business purposes.

■ Expansion press http://www.expansion.com/agencia/efe/2014/07/13/19723990.html (Accessed on

23 February 2016).

■ Law on Visas for Entrepreneurs. Available at:

http://www.exteriores.gob.es/Consulados/CIUDADDELCABO/en/InformacionParaExtranjeros/Pag

es/Law-on-Visas-for-Entrepreneurs.aspx (Accessed on 22 February 2016).

■ Ley 14/2013 http://noticias.juridicas.com/base_datos/Fiscal/513755-l-14-2013-de-27-de-sep-

apoyo-a-los-emprendedores-y-su-internacionalizacion.html (Accessed on 18 February 2016)

■ Ministry of Employment and Social Security - Residency Programme for Investors and

Entrepreneurs (PRIE) http://prie.comercio.es (Accessed on 18 February 2016).

■ Ministry of Employment and Social Security (2014) Available at:

http://www.empleo.gob.es/es/estadisticas/resumenweb/RUD.pdf (Accessed on 23 February 2016).

■ Ministry of Employment and Social Security (2015), Report on the Implementation of the

International Mobility Section of the Entrepreneurial Support and Internationalisation Act of 27

September 2013, page 6.

■ Ministry of Employment and Social Security http://prie.comercio.es/es-

ES/Paginas/Emprendedores.aspx

■ Mobile World Capital Barcelona (2015), Entrepreneurship in Spain in 2015: a year to remember.

Available at: http://mobileworldcapital.com/entrepreneurship-in-spain-in-2015-a-year-to-remember/

(Accessed on 22 February 2016).

■ New York Times http://www.nytimes.com/2014/11/23/business/international/at-spains-door-a-

welcomemat-for-entrepreneurs-

.html?hp&action=click&pgtype=Homepage&module=secondcolumn-region&region=top-

news&WT.nav=top-news (Accessed on 23 February 2016).

■ OECD (2014) report on International Migration Outlook. Available at http://ekke.gr/ocd/wp-

content/uploads/2014/12/SOPEMI-2014-E.pdf (Accessed on 19 February 2016)

■ OECD (2014), Services Trade Restrictiveness Index (STRI): Spain

■ OECD (2015), Skills Strategy Diagnostic Report: Spain, page 187.

■ Osorio, M., Urquiza, A. y Rodríguez, R. (2015). Value contribution of immigrants to society through

entrepreneurship. Journal for Educators, Teachers and Trainers, Vol. 6(2), pp. 101–112.

■ Report on the Implementation of the International Mobility Section of the Entrepreneurial Support

and Internationalisation, page 39.

■ Royal Decree 557/2011 of 20 April (BOE 30 April), regulates the employment of foreigners in

Spain within the scope of the development of applicable legislation in this area (Law 4 / 2000, as

amended in 2009 to adapt to European Union guidelines). Available at:

http://extranjeros.empleo.gob.es/es/ContenidosHOME/Derecha/InformacionInteres/documentos/B

OE-A-2011-7703.pdf (Accessed on 18 February 2016).

■ Welfare Society Territory (2014), Spain’s boom in immigrant businesses – Available at

http://www.west-info.eu/spains-boom-in-immigrant-businesses/ (Accessed on 22 February 2016).

http://www.expansion.com/agencia/efe/2014/07/13/19723990.html





http://prie.comercio.es/

http://www.empleo.gob.es/es/estadisticas/resumenweb/RUD.pdf



http://mobileworldcapital.com/entrepreneurship-in-spain-in-2015-a-year-to-remember/











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Annex 7 Country Fiche: United Kingdom

Key Messages:

The two main schemes are: Tier 1 Entrepreneur and Tier 1 Graduate Entrepreneur. Migrants

under the Tier 1 Entrepreneur route are defined as applicants wanting to invest in the UK by

setting up or taking over, and being actively involved in the running of, one or more

businesses in the UK. Migrants under the Tier 1 Graduate Entrepreneur route are defined as

having strong business skills and/or ideas, and are endorsed by a UK Higher Education

Institution (HEI) or UK Trade and Investment (UKTI).

Eligibility criteria for Tier 1 Entrepreneur visas includes a minimum investment of £200,000,

or, £50,000 if applicants have access to funds in a registered venture capital firm, a UK

government body, or, from approved seed funding under UKTI competitions. Applicants are

subject to a genuine entrepreneur test, consisting of a written application with evidence of

funds and a business plan, and an interview if required. With regard to Tier 1 Graduate

Entrepreneurs, there are no investment requirements, and applicants have to meet the

eligibility criteria set out by the endorsing organisation.

The UK government has set a maximum quota of 2000 Tier 1 Graduate Entrepreneur visas

per year. UK HEIs can offer 1,900 graduate visas and the UKTI can offer 100 overseas

graduate visas. There is no cap on the number of Tier 1 Entrepreneur visas granted.

In 2014 there were 5,488 Tier 1 Entrepreneur visas granted, with the majority being in-

country visas. This is a six fold increase since 2010 largely due to abuse of the UK migration

system. The number of Tier 1 Graduate Entrepreneur visas was 564, with the majority being

in-country visa switches from the Tier 4 General Student Visa.

The UK has an independent advisory committee, Migration Advisory Committee (MAC), who

constantly evaluates the effectiveness and impact of the UK migration system. In their 2015

review on entrepreneur, key recommendations were made to the UK government to reform

the Tier 1 Entrepreneur visa, create a new start-up visa, and, expand the Tier 1 Graduate

Entrepreneur visa.


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Overview of the scheme

The UK was the first country in Europe, since 2008, to introduce specific routes for migrant

entrepreneurs; Tier 1 Entrepreneur and Tier 1 Graduate Entrepreneur443. The main objectives of the

UK scheme are to attract talented/highly professional entrepreneurs including graduates to start up

high potential companies444. Other visas offering self-employment opportunities within the UK include

the Tier 1 Investor visa445 and the Tier 1 Exceptional Talent visa446.

The two entry routes for Entrepreneurs are outlined in brief below:

■ Tier 1 Entrepreneur visa defines entrepreneurs as applicants who are wanting to invest in the UK

by setting up or taking over, and being actively involved in the running of, one or more businesses

in the UK447.

■ Tier 1 Graduate Entrepreneur visa is the route for graduates that have strong business skills

and/or ideas, and who are endorsed by a UK Higher Education Institution (HEI) or UK Trade and

Investment (UKTI)448.

The UK Entrepreneur schemes have undergone recent reforms following reports of abuse in the

immigration system449. In 2012 the Tier 1 Post Study Work route was stopped, which led to a sharp

rise in the number of applicants for the Tier 1 Entrepreneur visa450. The previous Tier 1 Prospective

Entrepreneur visa is now incorporated in the Standard Visitor Visa, which allows migrants to come to

the UK for six months and then switch into the Tier 1 Entrepreneur visa category if eligible451. With the

aim to reduce non-compliance within the system, the UK has increased its checks and assessment of

migrant’s activities in their previous category, before allowing changes to other visas or residence

permits452. For example since 2013, those switching into the Entrepreneur route are subject to a

“genuine entrepreneur” assessment which looks at, among other criteria, the applicant’s previous

business experience and activity in the UK453. Additionally in 2014, to stop abuse of the Tier 1

Entrepreneur route, applicants applying for the scheme from within the UK were prevented from

relying on funds outside the UK454.

443 Migreat (2015), “Worldwide start up visa compared” 444 EMN (2015), “Study Admitting third-country nationals for business purposes”, Available at: http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/studies/results/economic-migration/index_en.htm. p.12 445 Applicants under the Tier 1 Investor visa must have at least £2,000,000 investment funds to invest within the UK. 446 Applicants under the Tier 1 Exceptional Talent visa must be recognised, and endorsed, by the UK Home Office as a leader and/or an emerging leader in the field of science, humanities, engineering, medicine digital technology or the arts. 447 UK Government (2015), “Tier 1 (Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-entrepreneur 448 UK Government (2015), “Tier 1 (Graduate Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-graduate-entrepreneur-visa/overview 449 EMN (2016), National Report for the UK, EMN study“ Changes in immigration stats and purposes of stay for EMN submission” 450 Migration Advisory Committee, (2015) “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf 451 Migreat (2015), “Can I apply for a UK Prospective Tier 1 Entrepreneur Visa?”, available at: https://www.migreat.com/en/can-i-apply-for-a-uk-prospective-tier-1-entrepreneur-visa-s41 452 EMN (2016), National Report for the UK, EMN study “ Changes in immigration stats and purposes of stay for EMN submission” 453 Ibid 454 UK Home Office (2015), “United Kingdom Annual Policy Report 2014 – Prepared for the European Migration Network”, EMN, available at: http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/nationalreports/results/index_en.htm








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The UK has other support schemes for entrepreneurs that are worth mentioning, but do not fall under

the main visa routes. The Global Entrepreneurs Programme (GEP), assists seasonal international

entrepreneurs to set up their business in the UK455, and the Sirius Pilot Programme supported

international graduates applying for the Tier 1 Graduate Entrepreneur visa456.


Admission criteria

Tier 1 Entrepreneur Visa

To apply for a Tier 1 Entrepreneur Visa the initial investment requirement is £200,000. This

requirement can drop down to £50,000 if the applicant has access to the funds from a Financial

Conduct Authority (FCA) registered venture capital firm, a UK government department or approved

seed funding competitions under UKTI457. These funds must readily accessible disposable income for

business in the UK458. Applicants can form entrepreneurial teams with another Tier 1 Entrepreneur

applicant, where investment funds can be shared, but funds cannot be used from another application

with a different entrepreneurial team459. Applicants must be at least 16 years old and be able to

support themselves during their time in the UK. They must have savings of at least £3,310 if applying

outside the UK, and £945 if applying within the UK, to support themselves460. Other criteria include the

knowledge of English language461 and a score of 95 in the points based system462. Migrants’ English

language skills must be proved by obtaining a CEFR level B1 certificate or a recognised academic

qualification that was taught in English463. A Tier 1 Entrepreneur visa costs £1,180 by online or post, or

£944 if applications are made in person outside the UK464.

Additionally, applicants must undergo a genuine entrepreneur test. Through this test applicants must

show that they are genuinely able to, and intent to, establish a business within the UK in the next six

months, intend to invest their capital in that business, that the capital is available, and, that they do not

intend to take up any employment in the UK apart from working in that business465. This test can also

occur when applicants are applying for leave to remain and indefinite level to remain. The test includes

a paper application, with additional evidence if requested of access to funds and a business plan,

455 Migreat (2015), “Worldwide start up visa compared” 456 Migration Advisory Committee (2015), “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf 457 EMN (2014), “Ad-Hoc Query on Requirements for Operating a Business Activity”, available at: http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/docs/ad-hoc-queries/economic-migration/565_emn_ahq_requirements_for_operating_business_activity_2014_en.pdf 458 EMN (2016), National Report for the UK, EMN study“ Changes in immigration stats and purposes of stay for EMN submission” 459 UK Government (2015), “Tier 1 (Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-entrepreneur 460 Migration Advisory Committee, (2015) “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf 461 Applicants from the following countries do not need to prove their English skills: Antigua and BARDUDA, Australia, the Bahamas, Barbados, Belize, Canada, Dominica, Grenada, Guyana, Jamaica, New Zealand, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Trinidad and Tobago, the USA. 462 Migreat (2015), “Worldwide start up visa compared” 463 UK Government (2015), “Tier 1 (Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-entrepreneur 464 Ibid

465 UK Government, (2016) “Guidance: Tier 1 (Entrepreneur) – version 16.0. Published for Home Office Staff on 07 April 2016”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/516430/Tier-1-entrepreneur-v16.pdf pp. 14-31







https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/516430/Tier-1-entrepreneur-v16.pdf

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183

followed by a potential interview466. The test is administrated and scored by the UK Border Agency

and/or more generalist business advice teams, rather than figures from the industries the applicants

are planning to enter467.

Tier 1 Graduate Entrepreneur Visa

To apply for a Tier 1 Graduate Entrepreneur visa, graduates must have been endorsed by either UKTI

as part of the elite global graduate entrepreneur programme (Sirius), or a UK HEI if registered as an

authorised endorsing body468.

To endorse a graduate, HEIs must be registered on an authorise list that is annually updated by UK

Visas and Immigration (UKVI)469. To become an authorised endorsing body, the HEI must be a

sponsor with Tier 4 sponsor status or an A-rated Tier 2 or 5 sponsor470. A Tier 4 sponsor is an

education provider that offers full time study courses for students in the UK471. A Tier 2 or 5 sponsor is

classed as an employer who can sponsor someone from outside the EEA and Switzerland to work for

them in the UK, including unpaid work472. An A rating means that the employer can assign certificates

of sponsorship and are listed in the register of sponsors473.

If an applicant is wanting to be endorsed by UKTI, they must have a degree qualification that is

recognised as being equal to a UK bachelor’s degree and meet the criteria set by UKTI474. The

endorsement has to be issued within three months of the application being submitted. If an applicant is

applying for endorsement under a UK HEI they must have a UK recognised bachelor’s degree,

master’s degree or PhD, and, permission to remain in the UK from their financial sponsor if that

sponsor is a government or an international scholarship agency and have paid for the course fees and

living costs of the applicant in the past twelve months475. Each registered HEI can request a maximum

of 20 endorsements year476.

To support themselves, students must have £945 in savings if applying within the UK, but if applying

outside the UK they must have £1,890477. If applicants are endorsed by UKTI awarded funding, they

do not need to prove that they have savings accessible to them478. The Tier 1 Graduate Entrepreneur

visa costs £355 if the applicants are applying outside the UK, and costs £456 if extending or switching

466 Ibid

467 Expert input by Max Nathan 468 UK Government (2015), “Tier 1 (Graduate Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-graduate-entrepreneur-visa/overview 469 The April 2016 Tier 1 (Graduate Entrepreneur) authorised endorsing bodies list is available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/517747/HEI_List_for_April_2016.pdf 470 UK Government (2015), “Endorse a graduate: Tier 1 (Graduate Entrepreneur)”, available at: https://www.gov.uk/guidance/endorse-a-graduate-tier-1-graduate-entrepreneur 471 UK Government (2015), “Apply for a Tier 4 sponsor license”, available at: https://www.gov.uk/guidance/apply-for-a-tier-4-sponsor-licence 472 UK Government (2015), “UK visa sponsorship for employers”, available at: https://www.gov.uk/uk-visa-sponsorship-employers/overview 473 The April 2016 Register of Sponsors Licensed Under the Points Base System is available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/518009/2016-04-21_Tier_2_5_Register_of_Sponsors.pdf 474 See criteria set by UKTI here: https://www.omnicompete.com/hosting/ukti/faqs.php 475 UK Government (2015), “Tier 1 (Graduate Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-

graduate-entrepreneur-visa/overview 476 Migration Advisory Committee (2015) “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf 477 EMN (2016), National Report for the UK, EMN study “Changes in immigration stats and purposes of stay for EMN submission” 478 Ibid

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/517747/HEI_List_for_April_2016.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/517747/HEI_List_for_April_2016.pdf

https://www.omnicompete.com/hosting/ukti/faqs.php




184

visas within the UK479. The same English language requirements stand as for the Tier 1 Entrepreneur

visa.

The Tier 1 Graduate Entrepreneur visa has a quota of 2000 places a year480. This limit does not apply

to extensions and the majority of places are allocated to qualifying HEI graduates (1,900) and only a

small number through UKTI for overseas graduates (100)481. Employees within the business set up

are not allowed to be third country nationals482.


Promotion and support schemes

The UK has some programmes in place to attract applicants and facilitate the application

procedure483.The UK promotes their policies at a national level as well as through their international

relations with third countries484. Further they promote the visas to national markets with a target group

of potential migrant entrepreneurs or certain companies through using leaflets, brochures, websites

and the media485. The UK Home Office is mainly in charge of the development and promotion of the

schemes486 and the UKVI evaluate applications487. Examples of support schemes include the Global

Entrepreneur Programme (GEP) and the (recently finished) Sirius Pilot programme.

The GEP is aimed at helping overseas entrepreneurs and early stage technology businesses or start-

ups that want to relocate their businesses to the UK488. This programme is more relevant to seasonal

entrepreneurs, who have already set up a business489. The programme is able to endorse applicants

for the Tier Entrepreneur Visa under UKTI and applicants must meet all the eligibility criteria required

for that visa. The main attractions of the scheme are that it offers help to develop business plans,

assistance with relocation to the UK, introductions to investors, guidance on how to grow the business

internationally, and, mentoring from a team of 18 experienced entrepreneurs490. The scheme was set

up in 2004 and has so far attracted 340 businesses to the UK, creating over 1,000 jobs in the

economy and raising over £1 billion of private investment in companies491. The small interested in the

479 UK Government (2015), “Tier 1 (Graduate Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-graduate-entrepreneur-visa/overview 480 EMN (2016), National Report for the UK, EMN study “Changes in immigration stats and purposes of stay for EMN submission” 481 Migration Advisory Committee, (2015) “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf 482 EMN (2015), “Study Admitting third-country nationals for business purposes”, Available at: http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/studies/results/economic-migration/index_en.htm 483 Ibid pg.16 484 EMN (2015), “Study Admitting third-country nationals for business purposes”, Available at: http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/studies/results/economic-migration/index_en.htm 485 Ibid 486 Ibid 487 Presidency discussion paper for the lunch debate during the Informal meeting of Ministers responsible for research and innovation 27 January 2016, Amsterdam: “Access to talent: a European visa/permit for start up founders” 488 EMN (2016), “UK - Admitting third-country nationals for business purposes”, Available at: http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/docs/emn-studies/28a_uk_admitting_third_country_nationals_for_business_purposes_en_final.pdf 489 Documents from an experts meeting on entrepreneurs held at the EC (DG RTD) on 20 May 2015: an informal discussion paper on the topic and summary of the meeting 490 UK Trade and Investment (2016), “Guidance: Entrepreneurs setting up in the UK”, available at: https://www.gov.uk/government/publications/entrepreneurs-setting-up-in-the-uk/entrepreneurs-setting-up-in-the-uk 491 Ibid








185

scheme over 10 years implies that it has not been advertised well showing that marketing of support

schemes are important492.

The Sirius programme was a two year pilot that was launched in 2013, under UKTI, and has now

finished493. The aim of the programme was to attract graduate entrepreneurs to the UK awarding

places under the Tier 1 Graduate Entrepreneur visa494. International graduates were offered a 12

month place with a leading accelerator who coached, mentored and financially supported graduates to

grow their business ideas so that they could apply for a UK visa. UKTI worked with five accelerator

programmes; Entrepreneurial Spark, Ignite 100, Oxygen Accelerator, Accelerator Academy, The

Bakery. Winning graduates were given £12,000 per individual for a year and were guaranteed no loss

of equity in their business. To have been eligible for the Sirius programme, applicants must have been

within a team of up to three people, with at least 50% being non-British citizens. All the team members

must have graduated, or be graduating, within the dates of the programme, with either a BA, MA,

MSC, MBA, and/or PHD. Applicants had to produce a 2 minute video and have evidence of having

graduated, or be in the process of graduating, from university. Applicants were judged by an

independent panel and were then interviewed by at least one accelerator programme. Successful

applicants had to relocate to the UK for the 12 months as a team, establish the headquarters of their

business in the UK, and, transfer all intellectual property agreements to their business in the UK.

Teams could apply for the Tier 1 Graduate Entrepreneur visa after the 12 months, with their initial

accelerator programme acting as their endorsing organisation under UKTI. Over the course of the

programme, 2,000 applicants were received from 93 countries and 200 winners were selected495.

Since 2013 graduate entrepreneurs have launched 75 start ups and created over 50 jobs496. In 2015,

over 17 companies had raised £14.5 million of equity investment with a combined valuation of £42

million. Collectively the companies have over £2 million in sales revenue and have received over £1

million in prize awards for their innovative products497.

Application procedure for Tier 1 Entrepreneur or Graduate Entrepreneur visas

If applicants are applying outside the UK they can apply online, yet have to have their finger prints and

photograph taken at a visa application centre498. Applications within the UK are only made as an

extension of a visas or if an applicant is switching from one visa to another. Applications within the UK

are made by post and biometric information must be given at post office branches499. On arrival, the

type of business and legal aspects of the company have to be registered at Companies House, which

is an executive agency sponsored by the UK government department for Business, Innovation and

492 Documents from an experts meeting on entrepreneurs held at the EC (DG RTD) on 20 May 2015: an informal discussion paper on the topic and summary of the meeting 493 UK Government (2015), “The Sirius Programme”, available at: https://www.gov.uk/guidance/the-sirius-programme 494 EMN (2016), “UK - Admitting third-country nationals for business purposes”, Available at: http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/docs/emn-studies/28a_uk_admitting_third_country_nationals_for_business_purposes_en_final.pdf 495 UK Government (2015), “Sirius Programme for graduate entrepreneurs”, available at: https://www.gov.uk/government/collections/sirius-programme-for-graduate-entrepreneurs

496 Migration Advisory Committee, (2015) “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate

Entrepreneur routes”, available at:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entreprene

urs.pdf

497 UK Government (2015), “Sirius Programme for graduate entrepreneurs”, available at: https://www.gov.uk/government/collections/sirius-programme-for-graduate-entrepreneurs 498 UK Government (2015), “Tier 1 (Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-entrepreneur 499 Ibid

https://www.gov.uk/guidance/the-sirius-programme





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Skills500. This needs to happen for the visa to be extended in the future if required. There are no

restrictions on the type of business or the specific sector in which migrants want to work501.

There is no specified duration for Entrepreneur visas to be processed502. For Tier 1 Graduate

Entrepreneur visas, endorsement under the UKTI usually takes three weeks for a decision to be made

and it will take up to eight weeks under a UK HEI503. Under the Tier 1 Entrepreneur route, visa holders

are allowed to stay in the UK for 3 years and 4 months, where then they can apply for an extension for

two years504. If switching to the visa from another category, applicants can apply for a three year

extension505. At the end of the extensions they are able to apply for permanent settlement. To apply

for extensions applicants must have invested their funds, established themselves in a business and

created at least two jobs for resident workers506. Visa holders must stay for at least 180 days a year

within the UK507, which can be problematic with applicants that have frequent business activities

outside the UK.

For Tier 1 Graduate Entrepreneurs, applicants can stay in the UK for one year, which can be further

extended for another year if required508. For extensions to occur applicants must apply with a new

endorsement letter and £945 to support themselves509. If the business is successful applicants can

switch into the Tier 1 Entrepreneur visa at the end of two years510. The chance of permanent

settlement is not available under the Tier 1 Graduate Entrepreneur visa.

Since the introduction of the genuine entrepreneur test, the rejection rates of applicants for the Tier 1

Entrepreneur visa have significantly increased511. The number of refusals in 2012 was 36% and in the

year ending June 2015 was 48% for in-country applicants512. For out-country applicants 21% of

500 UK Government (2016), “Companies House”, available at: https://www.gov.uk/government/organisations/companies-house/about 501 EMN (2015), “Study Admitting third-country nationals for business purposes”, Available at: http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/studies/results/economic-migration/index_en.htm 502 Presidency discussion paper for the lunch debate during the Informal meeting of Ministers responsible for research and innovation 27 January 2016, Amsterdam: “Access to talent: a European visa/permit for start up founders” 503 EMN (2016), “National Report for the UK, EMN study Changes in immigration stats and purposes of stay for EMN submission” 504 UK Government (2015), “Tier 1 (Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-entrepreneur 505 EMN (2016), “National Report for the UK, EMN study Changes in immigration stats and purposes of stay for EMN submission” 506 EMN (2014), “Ad-Hoc Query on Requirements for Operating a Business Activity”, available at: http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/docs/ad-hoc-queries/economic-migration/565_emn_ahq_requirements_for_operating_business_activity_2014_en.pdf 507 Migration Advisory Committee (2015) “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf 508 UK Government (2015), “Tier 1 (Graduate Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-

graduate-entrepreneur-visa/overview 509 Migration Advisory Committee (2015), “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf 510 UK Government (2015), “Tier 1 (Graduate Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-graduate-entrepreneur-visa/overview 511 Migreat (2015), “Worldwide start up visa compared” 512 Migration Advisory Committee (2015), “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf












187

applicants were refused in 2012 and 44% in 2014513. These rejections mainly occurred after the

genuine entrepreneur test interview stage. Two fifths of out-country applicants are rejected after the

interview, as are unable to show sufficient knowledge about their business plan or have not conducted

any market research514.

Rights granted under the schemes

Tier 1 Entrepreneur and Tier 1 Graduate Entrepreneur visa holders are both allowed to bring

dependants with them; dependants include partners, children under 18 and children over 18 who are

already in the UK as a dependant. Dependants must prove their biometric information through

photographs and finger prints, and provide a criminal record certificate from any country that they have

lived in for 12 months or more in the last 10 years. Dependants must have £1,890 available to them if

they are applying outside the UK or have been within the UK for less than 12 months. If dependants

have been in the UK for more than twelve months they must have at least £630 available to them

each515. Funds available for dependants applying from outside the UK are required to be slightly less

under the Tier 1 Entrepreneur Graduate Visa, at £1,260. Dependants under the Tier 1 Entrepreneur

visa are granted access to the labour market. 516

In both entrepreneur routes, visa holders can set up and run multiple businesses and can be self-

employed. However, migrants cannot work outside their businesses517. Under the Tier 1 Graduate

Entrepreneur route, migrants are not allowed to work as a doctor or dentist in training, or work as a

professional sportsperson518. Under the Tier 1 Entrepreneur route visa holders are permitted to study

but will need to obtain an Academic Technology Approval Scheme (ATAS) certificate under certain

conditions519. The ATAS is a section of UK immigration law stating that students who are applying for

post graduate study in certain subjects, where knowledge of which could be used in programmes to

develop weapons of mass destruction or their means of delivery, must apply for a ATAS certificate

before they are allowed to study within the UK520. Approval for an ATAS certificate takes on average

25 days. Applicants of an ATAS must have a conditional offer letter from their HEI, information about

their study programme, full details of their previous studies, information about funding, and, contact

details for two referees521.

It is possible for migrants with a Tier 1 Entrepreneur visa to apply for accelerated settlement (indefinite

leave to remain) within the UK after their initial three years. For this to occur, they must prove that they

have created at least ten full time jobs in the UK business, or work in a business that has a net

513 Migration Advisory Committee (2015), “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf 514 Ibid 515 Ibid 516 UK Government (2015), “Tier 1 (Graduate Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-graduate-entrepreneur-visa/overview 517 UK Government (2015), “Tier 1 (Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-entrepreneur 518 UK Government (2015), “Tier 1 (Graduate Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-graduate-entrepreneur-visa/overview 519 EMN (2016), National Report for the UK, EMN study“ Changes in immigration stats and purposes of stay for EMN submission” 520 UK Government (2016), “Academic Technology Approval Scheme (ATAS)”, available at: https://www.gov.uk/guidance/academic-technology-approval-scheme 521 Ibid




188

increase of £5 million522. Once settlement is granted, migrants have access to the EU labour market.

Both visas do not allow holders to access public funds523.

The following table provides a summary of the requirements for the Tier 1 Entrepreneur and Tier 1

Graduate Entrepreneur scheme.

Overview Tier 1 Entrepreneur Tier 1 Graduate Entrepreneur

Admission criteria Minimum investment £200,000 or if

eligible £50,000

Evidence of access to funds and

business plan

Endorsement from UKTI or an authorised UK HEI

UK recognised Bachelor’s degree Master’s

degree or PHD

Support scheme Yes – the Global Entrepreneur

Programme

No – the Sirius Pilot Programme finished in 2015

Procedure Apply online outside the UK

Apply by post within the UK

May be subject to Genuine

Entrepreneur Test

Apply online outside the UK

Apply by post within the UK

Have to be endorsed by UKTI or an authorised

HEI

Duration of

procedure (max.)

N/A Endorsement under UKTI – three weeks

Endorsement under UK HEI – eight weeks

Application fee £1,180 online or by post

£944 in person outside UK

£355 outside UK

£456 extending or switching visas within the UK

Duration of permit

(max.)

Three years and four months One year


For two years

Yes

For one year

Change of status

possible

Yes Yes

Facilitation of

permanent residence

Yes - after five years

Accelerated settlement possible

No

Possible to apply for Tier 1 Entrepreneur visa

Rights Can run multiple businesses

Self-employment

Can run multiple businesses

Self-employment

Restrictions on

economic activity

No sectoral restrictions

Cannot work outside businesses

Allowed to study – need approved

ATAS certificate if required

Cannot work outside businesses

Cannot work as a doctor, dentist in training, or a

professional sportsperson

Family Members

Family reunification

possible

Yes Yes

Duration of permit Same as for permit holder Same as for permit holder

Rights of family

members

Full access to the labour market N/A


The following statistics are taken from the 2015 UK Migration Advisory Committee (MAC) Review of

Tier 1 Entrepreneur and Graduate Entrepreneur visas524.

522 Migration Advisory Committee (2015), “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf 523 Migreat (2015), “Worldwide start up visa compared” 524 Migration Advisory Committee (2015), “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at:




189

Tier 1 Entrepreneur Visa

In 2014, 5,488 Tier 1 Entrepreneur visas were granted to main applicants. The overall number of visas

granted has increased six times between 2010 to 2014 (Table 2.1). The number of in-country visas

granted (4,401) was more than three times the number of out-country visas granted (1,087). For every

out-country visa granted, roughly two dependant visas are also granted. The number of dependants is

much smaller for in-country visas granted, with the dependant to main applicant ratio being 0.63. A

small number (5%) of extensions were granted in 2014.

Table A7.1 All Tier 1 Entrepreneur visas granted to main applicants from 2010 - 2014

Year Out-country visas granted In-country visas granted

2010 189 180

2011 421 360

2012 701 803

2013 1,166 3,327

2014 1,087 4,401

2015Q2525 1,039 2,214

Source: UK Home Office Immigration Statistics. (2015), “National Statistics – Work, available at:

https://www.gov.uk/government/publications/immigration-statistics-april-to-june-2015/work

In terms of the profile of Tier 1 Entrepreneur visas holders, in 2014, Pakistan, China, USA and India

respectively accounted for around half of all out-country applicants. A third of in-country applicants

were from Pakistan alone, followed by over a fifth (24%) from India, and a tenth from Nigeria and

China each. Differences between nationalities are further seen in refusal rates, where Pakistan

applicants in 2014 had a 61% refusal rate whereas USA applicants only had a 4% refusal rate.

The average age of successful out-country applicants was 37 in 2014. In terms of regional location,

over half (56%) of successful applicants had addresses in London.

Tier 1 Graduate Entrepreneur Visa

In 2014, 564 Tier 1 Graduate Entrepreneur visas were granted. The numbers have increased

significantly since 2012 (Table 2.2). Similar to the Tier 1 Entrepreneur scheme, the number of in-

country visas granted (389) was three times the number of out-country visas granted (175). The

number of dependants brought under the Tier 1 Graduate scheme was very minimal, with overall 42

dependants in 2014. Nearly three quarters (73%) of in-country visas were granted to applicants who

previously held Tier 4 General Student visas. Extensions of the Tier 1 Graduate Entrepreneur visa

accounted for a quarter of in-country visas granted.

Table A7.2 All Tier 1 Graduate Entrepreneur visas granted to main applicants from 2012 - 2014

Year Out-country visas granted In-country visas granted

2012 0 27

2013 13 193

2014 175 389

2015Q2526 128 468

Source: UK Home Office Immigration Statistics. (2015), “National Statistics – Work, available at:

https://www.gov.uk/government/publications/immigration-statistics-april-to-june-2015/work

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf 525 Data represents those visas granted in the year ending 2015Q2 526 Data represents those visas granted in the year ending 2015Q2




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India, China and the US respectively were the largest nationalities accounting for over a third for both

in and out-country applicants, in 2014. Over two thirds (71% for out-country and 66% for in-country) of

applicants have been under the age of 30 since 2012, with the average age being 28. Nearly half

(46%) of all applicants are based in London.

Gender Statistics

In 2014, the Centre for Entrepreneurs published a report showing that 25.9% of migrant entrepreneurs

were female527. Thai, Filipino and Vietnamese were the only three nationalities that had a greater

number of female than male migrant entrepreneurs within the UK. The highest proportion of male to

female migrants was from Middle Eastern and North African nationalities. There is no available data at

this time on gender statics for each separate visa.


In the 2015 Global Entrepreneur Index, the UK was ranked fourth, implying that it was the best country

in Europe in which to set up a business528. It can be seen as an attractive destination for

entrepreneurs due to the size of its domestic market, strength of its economy, existing business

networks including access to the EU market, and, easy access to venture capital funds529. With the

Tier 1 Graduate Entrepreneur visa, applicants have said that the support from universities in terms of

resources, advice and facilities are key influencing factors530. London itself is a major draw for

migrants and has been described as Europe’s technology capital offering local ecosystems supporting

innovative start-ups531. It is estimated that a quarter of start-ups in Tech City, the leading company in

London supporting digital technology business across the UK532, were founded by migrant

entrepreneurs533. (It must be noted that the data from Tech City does not specify which migrants came

through the Tier 1 Entrepreneur scheme.) The UK has a market approach towards start-ups. Banks

only make a margin on loans between 2-7%, so they can only afford very low default rates, meaning

that they will not lend to an entrepreneur estimated to be risky534.

Since 2008 to 2014, 13,746 Tier 1 Entrepreneur and Tier 1 Graduate Entrepreneur visas have been

granted. From this, 1,580 active companies535 have been established and registered on the Inter-

Departmental Business Register (IDBR)536. The companies have accounted for 9,850 employees and

together generate an annual turnover of £1.45 billion. On average, one migrant supports six members

of staff. It must be noted that data on employment and turnover mainly results from 25% of the

sample, for example the biggest 15 companies account for about two thirds of the turnover

527 Centre for Entrepreneurs and DueDil (2014), “Migrant Entrepreneurs: Building our Businesses Creating Our Jobs”, available at: http://centreforentrepreneurs.org/wp-content/uploads/2015/11/MigrantEntrepreneursWEB.pdf 528 Migration Advisory Committee (2015), “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf 529 Migreat (2015), “Worldwide start up visa compared” 530 Ibid 531 Desiderio, M.V (2014), “Policies to Support Immigrant Entrepreneurship”, Migration Policy Institute, available at: file:///C:/Users/35615/Downloads/TCM_Cities_Entrepreneurship-FINALWEB.pdf 532 Tech City UK (2016) “About Us”, available at: http://www.techcityuk.com/about-us/ 533 Anderson, E. (2013) “The Great British Immigration scandal: Young ,gifted, foreign – and shut out of the UK” Management Today , available at: http://www.managementtoday.co.uk/features/1171968/the-great-british-immigration-scandal-young-gifted-foreign-shut-uk/ 534 Expert input by Matt Smith 535 Number achieved through matching Tier 1 applicants to UK company directors and to business in the IDBR. It must be noted that there is some loss of information in each of the matching stages. The final figure is an estimate and likely to be a lower bound. 536 Migration Advisory Committee (2015), “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf

http://centreforentrepreneurs.org/wp-content/uploads/2015/11/MigrantEntrepreneursWEB.pdf



http://www.techcityuk.com/about-us/

http://www.managementtoday.co.uk/features/1171968/the-great-british-immigration-scandal-young-gifted-foreign-shut-uk/





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generated537. This could mean that outliers have a significant impact, and must be taken into

consideration when evaluating success of the schemes. In terms of sectors, the business share of

professional, scientific and technical activates, and information and communication sectors are higher

for Tier 1 Entrepreneurs than the UK average. These sectors count for 36% of Tier 1 Entrepreneur

activity.538 The IDBR register, however, indicates that a large proportion of migrants are not operating

in highly skilled or innovative industries539, implying that the application process for the visas are more

focused on the intention to start the business rather than the business activity540. Three quarters of

migrants in 2014 failed to extend their visas, implying that a large number have not been successful in

establishing their business. For migrant entrepreneurs wholesale and retail trade account for nearly a

third of the share of UK businesses and over a fifth of the share of employment. It must be noted that

some entrepreneurs take over pre-existing companies and therefore cannot fully account for

employment figures.541

It is thought that the high numbers of UK Entrepreneur visas granted are largely due to the abuse of

the system and this is why the numbers have seemed to be much higher compared to other countries

in the previous years542. The UK has reported challenges with entrepreneur visa application

procedures and resulting business owners conducting fraud by setting up non-genuine businesses.

Multiple switching from migrants occur between visas and/or specified visa roles543. For example,

migrants have been using the Tier 1 Entrepreneur visa as a cheaper route to switch into the Tier 1

Investor visa, as the investor visa requires £2 million minimum to apply. Further abuse of the Tier 1

Entrepreneurial route has been seen through migrants investing in a business but not being actively

involved its everyday operations. Conversely the MAC has suggested that this type of activity could be

a useful course of funding for UK businesses that are struggling to access other forms of funds. The

MAC has called for the UK government to consider whether the Tier 1 Entrepreneur route should be

expanded to include a range of these types of investments or whether the Tier 1 Investor visa should

incorporate this type of investment itself.544 To drive down fraudulent applications the Home Office

published a business plan in 2015 that makes it compulsory for applicants to provide evidence of their

source of funds.545 The Genuine Entrepreneur Test has further made it much more difficult to meet the

requirements of the Entrepreneur visa category. Critics have described the application of the test as

being unfair due to examiners of the test not having sufficient knowledge of entrepreneurial business

areas546.

537 Ibid 538 Ibid 539 Examples of highly skilled and innovative industries can be taken from the 2014 UK Shortage Occupation List for highly skilled workers: production managers and directors in mining and energy, biological scientists and biochemists, physical scientists, natural and social science professionals, civil engineers, mechanical engineers, electrical engineers, electronics engineers, design and development engineers, production and process engineers, other engineering professionals, IT business analysts, architects and systems designers, programmers and software development professionals, environmental professionals, medical practitioners, medical radiographers, nurses, secondary education teaching professionals, social workers, quality control and planning engineers, engineering technicians, medical and dental technicians, artist, dancers and choreographers, musicians, arts officers, producers and directors, graphic designers, buyers and purchasing officers, welding trades, aircraft maintenance and related traders, line repairs and cable jointers, chefs 540 Migration Advisory Committee (2015), “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf. p. 136 541 Expert input by Matt Smith 542 Migreat (2015), “Worldwide start up visa compared” 543 Expert input by Max Nathan 544 Migration Advisory Committee (2015), “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf p. 151 545 Expert input by Matt Smith 546 Ibid






192

Indirect economic impacts could be seen within local companies in the form of knowledge transfer and

the formation of international partnerships. The fact that migrant entrepreneurs have to establish their

business in the UK and hire non-third country national employees within three years, under the Tier 1

entrepreneur scheme, could help facilitate this skills transmission. Evidence from partners, interviewed

by the MAC in their 2015 evaluation report, suggest that migrant entrepreneurs have a positive impact

on strengthening international trade links. This could lead to an increased level of competition with

domestic entrepreneurs, driving economic growth. It could be argued that migrant entrepreneurs

displace native entrepreneurs due to the potential of limited resources in the UK, in terms of human

capital and credit supply547. The evidence for this is disputed and a concrete conclusion cannot be

made either way548. From the perspective of the consumer, increased competition can inhibit the

development of a monopoly within the local market leading to lower prices and innovation549.

The MAC 2015 evaluation of the UK entrepreneur visas strongly recommended that the Tier 1

Entrepreneur route is reformed to maximise the economic benefit to the UK. The UK Home Office

wants to reduce overall net migration but the entrepreneur visa is being kept550. Reforms are based on

the aim to reduce the volume of migrants and increase the average quality of applicants. The MAC

argue that there needs to be clearer objectives of what the route is designed for and who it is mainly

targeting. On this basis, the UK government is considering the idea of setting up a low volume highly

selective start up visa to attract the best talent. Greater restrictions on eligibility criteria are called for,

such as entrepreneurs having to provide evidence of an entrepreneurial track, work experience and

skills qualifications that are relevant to the business they are wanting to set up. MAC

recommendations additionally include making use of third party endorsements from industry experts

so that those carrying out application selections are investing funds alongside their endorsement.

Further it is argued to reduce the lower range of the investment threshold to £40,000 - £50,000 to give

more flexibility to start ups in highly innovative sectors551.

The Tier 1 Graduate Entrepreneur route is thought to be working effectively. Initially, the number of

applications for gradate entrepreneurs was very low and the universities were not actively making use

of the system. Now universities within the UK are beginning to work with this route and are putting in

place competitive selection processes to become more attractive to potential foreign graduates. For

instance, the University of Manchester, which is an authorised endorsing body, offers an applicant the

support of the University’s Enterprise Centre to help develop a business, which includes mentoring

expertise, and, incubator and office facilities552. The Tier Graduate Entrepreneur visa has been

recommended to be expanded so that universities can do more to help international students secure

post-graduate work visas and link them up with areas of the economy where their skills are most

needed553. MAC recommend that this route is widened to include a larger number of endorsing bodies

such as UKTI approved accelerator programmes, as was seen on the recently finished Sirius Pilot

programme (Annex 1). The UK government is considering extending the initial leave to remain to two

years to allow visa holders more time to set up their business554.

547 Ibid 548 Expert input by Matt Smith 549 Expert input by Max Nathan 550 Expert input by Matt Smith 551 Migration Advisory Committee (2015), “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf 552 University of Manchester (2016), “Graduate Entrepreneur Visa”, available at: http://www.careers.manchester.ac.uk/international/ukworkafterstudy/gradentrepreneur/ 553 Migration Advisory Committee (2015), “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur and Graduate Entrepreneur routes”, available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier_1_Entrepreneurs.pdf 554 Ibid



http://www.careers.manchester.ac.uk/international/ukworkafterstudy/gradentrepreneur/




193

References

■ Anderson, E. (2013) “The Great British Immigration scandal: Young ,gifted, foreign – and shut out

of the UK” Management Today , available at:

http://www.managementtoday.co.uk/features/1171968/the-great-british-immigration-scandal-

young-gifted-foreign-shut-uk/

■ Desiderio, M.V (2014), “Policies to Support Immigrant Entrepreneurship”, Migration Policy Institute,

available at: file:///C:/Users/35615/Downloads/TCM_Cities_Entrepreneurship-FINALWEB.pdf

■ EMN (2016), National Report for the UK, EMN study “Changes in immigration stats and purposes

of stay for EMN submission”

■ EMN (2015), “Study Admitting third-country nationals for business purposes”, Available at:


do/networks/european_migration_network/reports/studies/results/economic-

migration/index_en.htm

■ EMN (2015), “UK - Admitting third-country nationals for business purposes”, Available at:


do/networks/european_migration_network/reports/docs/emn-

studies/28a_uk_admitting_third_country_nationals_for_business_purposes_en_final.pdf

■ EMN (2014), “Ad-Hoc Query on Requirements for Operating a Business Activity”, available at:




■ Expert input by Matt Smith

■ Expert input by Max Nathan

■ Legrain, P (2007), “Immigrants: your country needs them”. Princeton University Press

■ Migration Advisory Committee (2015), “Tier 1 Entrepreneurs: Review of the Tier 1 Entrepreneur

and Graduate Entrepreneur routes”, available at:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472236/Report_Tier

_1_Entrepreneurs.pdf

■ Migreat (2015), “Can I apply for a UK Prospective Tier 1 Entrepreneur Visa?”, available at:

https://www.migreat.com/en/can-i-apply-for-a-uk-prospective-tier-1-entrepreneur-visa-s41

■ Migreat (2015), “Worldwide start up visa compared”

■ Presidency discussion paper for the lunch debate during the Informal meeting of Ministers

responsible for research and innovation 27 January 2016, Amsterdam: “Access to talent: a

European visa/permit for start up founders”

■ Tech City UK (2016) “About Us”, available at: http://www.techcityuk.com/about-us/

■ UK Home Office (2015), “United Kingdom Annual Policy Report 2014 – Prepared for the European

Migration Network”, EMN, available at: http://ec.europa.eu/dgs/home-affairs/what-we-

do/networks/european_migration_network/reports/nationalreports/results/index_en.htm

■ UK Government (2016), “Academic Technology Approval Scheme (ATAS)”, available at:

https://www.gov.uk/guidance/academic-technology-approval-scheme

■ UK Government (2015), “Apply for a Tier 4 sponsor license”, available at:

https://www.gov.uk/guidance/apply-for-a-tier-4-sponsor-licence

■ UK Government (2016), “Companies House”, available at:

https://www.gov.uk/government/organisations/companies-house/about

■ UK Government (2015), “Endorse a graduate: Tier 1 (Graduate Entrepreneur)”, available at:

https://www.gov.uk/guidance/endorse-a-graduate-tier-1-graduate-entrepreneur











https://www.migreat.com/en/can-i-apply-for-a-uk-prospective-tier-1-entrepreneur-visa-s41

http://www.techcityuk.com/about-us/



https://www.gov.uk/guidance/academic-technology-approval-scheme

https://www.gov.uk/guidance/apply-for-a-tier-4-sponsor-licence

https://www.gov.uk/guidance/endorse-a-graduate-tier-1-graduate-entrepreneur


194

■ UK Government, (2016) “Guidance: Tier 1 (Entrepreneur) – version 16.0. Published for Home

Office Staff on 07 April 2016”, available at:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/516430/Tier-1-

entrepreneur-v16.pdf

■ UK Government, (2015) “Guidance: Tier 1 (Entrepreneur) –version 15.0. Published for Home

Office Staff on December 2015” available at:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/485915/Tier_1_Entr

epreneur_15_0_EXT.pdf

■ UK Government (2015), “Sirius Programme for graduate entrepreneurs”, available at:

https://www.gov.uk/government/collections/sirius-programme-for-graduate-entrepreneurs

■ UK Government (2015), “The Sirius Programme”, available at: https://www.gov.uk/guidance/the-

sirius-programme

■ UK Government (2015), “Tier 1 (Entrepreneur) Visa”, available at: https://www.gov.uk/tier-1-

entrepreneur

■ UK Government (2015), “Tier 1 (Graduate Entrepreneur) Visa”, available at:

https://www.gov.uk/tier-1-graduate-entrepreneur-visa/overview

■ UK Government (2015), “UK visa sponsorship for employers”, available at: https://www.gov.uk/uk-

visa-sponsorship-employers/overview

■ UK Trade and Investment (2015), “Guidance: Entrepreneurs setting up in the UK”, available at:

https://www.gov.uk/government/publications/entrepreneurs-setting-up-in-the-uk/entrepreneurs-

setting-up-in-the-uk

■ University of Manchester (2016), “Graduate Entrepreneur Visa”, available at:


https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/485915/Tier_1_Entrepreneur_15_0_EXT.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/485915/Tier_1_Entrepreneur_15_0_EXT.pdf

https://www.gov.uk/government/collections/sirius-programme-for-graduate-entrepreneurs



https://www.gov.uk/tier-1-graduate-entrepreneur-visa/overview

https://www.gov.uk/uk-visa-sponsorship-employers/overview

https://www.gov.uk/uk-visa-sponsorship-employers/overview



195

Annex 8 Country Fiche: Australia

Key Messages:

Australia has a long-standing policy aimed at attracting foreign entrepreneurs, which

is subject to periodic assessment and revision.

The first generation schemes used to grant immediate settlement in Australia. Since

the 2000s, temporary schemes conceived as the first step in the path towards

settlement were introduced.

The current programmes were the result of the last legislative changes in 2012.

The current temporary scheme for entrepreneurs is the Business and Innovation visa

(subclass 188), which grants a residence permit up to 4 years to migrants who

expressed an interest, passed a points-based assessment and was subsequently

nominated by the state or territory.

Other schemes, closed to new applications since 2012, are now available only for

dependants (Business Owner visa (subclass 160) and State/Territory Sponsored

Business Owner visa (subclass 163)).

The permanent scheme to which the foreign entrepreneurs have access to, after a

period of successful business in Australia, is the Business Innovation and Investment

(Permanent) visa (subclass 888). The Business Owner (Permanent) visa (subclass

890) and the State/Territory Sponsored Business Owner (Permanent) visa (subclass

892) are also available for current holders of the visas that are closed since 2012.

The Business Talent visa (subclass 132) is the only settlement visa that does not

require that the migrant has spent previosly time in Australia on a Business visa. The

application envisages a two-steps process (expression of interest and nomination)

and the visa is aimed at foreign entrepreneurs with high turnover and high assets.

The selection criteria for the business visas are both general human capital criteria

(age, education, languages, and experience) and business-related (turnover, assets

and business shares).


196


Since 1976, Australia has envisaged the category of foreign entrepreneur into the national legislation. An entrepreneur was defined as a person having a business plan and enough capital to set up a business (not defined in the legislation, but in practice set at AUD 200,000 (approx. €120,000)555). If these conditions were met, a permit could have been issued that granted permanent residence right. Over the years, the requirements were modified and the programme was fine-tuned556 according to evaluations that were carried out. In 1992, the Business Skills Programme was officially set up557. In 2003 in line with a more general turn in the Australian migration policy towards temporary schemes vis-à-vis immediate settlement schemes, a temporary business scheme was introduced. Migrant entrepreneurs were admitted first on a temporary visa, and then, upon the condition that the business was successful, would have become eligible for permanent residence558. However, a scheme allowing the applicant to immediately receive permanent residence was continued for entrepreneurs doing a significant investment, i.e. the Business Talent Visa. The numbers for this immediate settlement permit were relatively limited: in the period of 2006-2007, 4,881 Business Skills Visas were granted, mainly to citizens of China, the United Kingdom, Malaysia, South Africa, Singapore, Taiwan, Zimbabwe, South Korea, Hong Kong and Indonesia559. Besides the introduction of temporary schemes in 2003, Australia also introduced regional-based schemes, to encourage migrants to set up a business in non-metropolitan areas560. In 2012, the Business Innovation and Investment Programme replaced the Business Skills Programme, after a review carried out by the Department of Immigration and Citizenship in 2010-2011561. This is the system currently in place562. The temporary or permanent visas currently available for entrepreneurs are the following563.

■ The available temporary visa is the Business and Innovation visa (subclass 188), which is open

to new applicants564.

■ Permanent visas include the Business Owner (Permanent) visa (subclass 890), the

State/Territory Sponsored Business Owner (Permanent) visa (subclass 892), which are the

continuation of temporary visas previously in use; the Business Innovation and Investment

555 Jock Collins (2008), “Immigrant entrepreneurs in Australia: Regulations and responses”, in Migracoes 556 ibid 557 The Parliament of the Commonwealth of Australia (2015), Report of the Inquiry into the Business Innovation and Investment Programme, available at Parliament https://www.google.be/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwjd1pPVrKTLAhVql4MKHU2hDrIQFgglMAE&url=http%3A%2F%2Fwww.aph.gov.au%2F~%2Fmedia%2F02%2520Parliamentary%2520Business%2F24%2520Committees%2F244%2520Joint%2520Committees%2FMigration%2FBIIP%2FReport%2FFinal%2520Report.pdf&usg=AFQjCNFw_Ryg1flBwVpAEivJ8V2tbH5Dqw&sig2=9YLUfFnblal_dOfZrRtN_g 558 Jock Collins (2008), “Immigrant entrepreneurs in Australia: Regulations and responses”, in Migracoes 559Jock Collins (2008), “Immigrant entrepreneurs in Australia: Regulations and responses”, in Migracoes 560 ’Regional Australia’ is defined as the non-metropolitan areas of the nation that lie beyond most of the major capital cities and their immediate surrounding suburbs. However selected capital cities, which seek a higher proportion of skilled migrants than they attract, have secured permission to be categorised as ‘regions’ under the scheme 561 The Parliament of the Commonwealth of Australia (2015), Report of the Inquiry into the Business Innovation and Investment Programme, available at Parliament 562 The legislative reference is the Immigration Act 1958, consolidated version, http://www.austlii.edu.au/au/legis/cth/consol_act/ma1958118/, and the 1994 Migration Regulations, as amended, https://www.legislation.gov.au/Details/F2016C00379. 563 Australian Government Webpage (2016), Business Talent Visa (132) https://www.border.gov.au/Trav/Visa-1/132-, Business Innovation and Investment Visa (188) https://www.border.gov.au/Trav/Visa-1/188-, Business Innovation and Investment Visa (888), https://www.border.gov.au/Trav/Visa-1/888- 564 The temporary Business Owner visa (subclass 160) and the State/Territory Sponsored Business Owner visa (subclass 163), which were closed to new applications on 1st July 2012 and are now open only for dependents.

https://www.google.be/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwjd1pPVrKTLAhVql4MKHU2hDrIQFgglMAE&url=http%3A%2F%2Fwww.aph.gov.au%2F~%2Fmedia%2F02%2520Parliamentary%2520Business%2F24%2520Committees%2F244%2520Joint%2520Committees%2FMigration%2FBIIP%2FReport%2FFinal%2520Report.pdf&usg=AFQjCNFw_Ryg1flBwVpAEivJ8V2tbH5Dqw&sig2=9YLUfFnblal_dOfZrRtN_g





http://www.austlii.edu.au/au/legis/cth/consol_act/ma1958118/

https://www.legislation.gov.au/Details/F2016C00379

https://www.border.gov.au/Trav/Visa-1/132-





197

(Permanent) visa (subclass 888), which is the continuation of the temporary Business and

Innovation visa; and the Business Talent (subclass 132). The last visa is the only one that does

not require that the applicant had spent time on a business temporary visa.

Table below summarizes the temporary and permanent business visas available. The temporary

Business & Innovation visa (subclass 188) will be described in section 2.1; the permanent Business

Innovation and Investment visa (subclass 888) and State/Territory Sponsored Business Owner visa

(subclass 892) will be described in section 2.2. Being the continuation of temporary visas belonging to

the old business visa programmes, the Business Owner visa (subclass 890) and the State/Territory

Sponsored Business Owner visa (subclass 892) will not be discussed in details.

Table A8.1 Temporary and permanent business visas

Temporary Business Visas Permanent Business Visas

Business & Innovation visa (subclass 188) Business Innovation and Investment visa

(subclass 888)

[Business Owner visa (subclass 160) – close to

new primary applicants]

Business Owner visa (subclass 890)

[State/Territory Sponsored Business Owner visa

(subclass 163) – close to new primary applicants]

State/Territory Sponsored Business Owner

visa (subclass 892)

Business Talent (subclass 132) (No

temporary visa requested)

Schemes for investors and senior executives are also available as sub-streams of the visas above mentioned, however, they are not be covered in this fiche. With regard to schemes for professionals aimed at entering in an employment relationship, it is worth to recall that Australia foresees the possibility for migration without a job offer, if special conditions hold. The relevant scheme is the Skilled-Independent Visa (subclass 189). In Australia, family members apply for the same visas held by the main applicant, therefore having the same rights, also with regard to access to permanent visas. The entrepreneurs’ schemes are one element of a wider migration framework which is selective and skill-based, whereby skills are broadly defined and tested by points-based assessment. As for the entrepreneurs’ scheme, the main selection criteria is having successful business experience. The target group, for both temporary and permanent schemes, is mainly composed by migrants with great experience, defined in terms of business turnover and total asset. The age of migrants and their English skills are also taken into account in the application process565. Migrants who cannot prove business experience are not eligible to apply for the business visas. This is an important difference of the Australian scheme(s) compared to its European counterparts as foreigners with an entrepreneurial idea and capital to implement it, but without previous business experience, are excluded.

Unlike other countries, such as France and Chile, Australia does not provide a specific support

scheme or incentives to foreign entrepreneurs, for instance in terms of capital. On the contrary, the

applicant of a temporary permit must show total net business and personal assets of at least AUD

800,000 (approx. € 332,000).

The business environment in Australia results to be overall favourable to new businesses, although

specific support schemes are missing. According to the World Bank Doing Business Report 2016566,

Australia ranks thirteenth against the general indicator of ease of doing business.

565 OECD (2010), Open for Business. Migrant Entrepreneurship in OECD countries, available at http://www.keepeek.com/Digital-Asset-Management/oecd/social-issues-migration-health/open-for-business_9789264095830-en#page1 566 World Bank 2016, Doing Business Report http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-Reports/English/DB16-Full-Report.pdf.

http://www.keepeek.com/Digital-Asset-Management/oecd/social-issues-migration-health/open-for-business_9789264095830-en#page1





198

Australia is also ranked 21st out of 140 in the Global competitiveness Index567, produced by the World

Economic Forum.


Temporary visa: Business Innovation and Investment visa (subclass 188)

The Business Innovation and Investment visa (subclass 188)568 - Business Innovation stream569 is

a temporary visa which has a validity of 4 years and 3 months and can be converted after a certain

period of successful business in a permanent visa (see permanent visas).

Application Process

The application process is divided into two steps: at a first stage, candidates express an interest and

specify which state or territory they seek the nomination from; applicants could therefore be nominated

by a state or territory government of Austrade (Australian government trade commission), and at a

second stage they may be invited to apply.

The expression of interest, otherwise called express entry or SkillSelect570, is a stage which precedes the application itself, and serves the purpose of pre-filtering migrants. It is an efficiency-oriented instrument and provides scope for states/ territories to assess pre-screened applicants for the purpose of nominating them.

The nominators have their own selection criteria, and may call the applicant for an interview or may want to be contacted instead. Once the applicant receive an invitation, s/he has 60 days to apply to a visa. If no application is submitted after 60 days, the candidate may receive another nomination. If 60 days after the second nomination the candidate does not apply for a visa, s/he will need to submit another expression of interest to be considered again571.

Requirements

With regard to the business-related requirements, the applicant must, for two out of four previous fiscal years before the application, show to have had an ownership interest in an established business(es) that had at least AUD 500,000 (approx.. € 332,000) turnover per year.

Moreover, the applicant must have a certain percentage of the nominated business, which equals to 51% if the business has a turnover of less than AUD 400,000 (approx. € 265,000) per year, to 30% if more than AUD 400,000 and 10% is the business is a publicly listed company.

In general, the business career of the applicant must prove successful and his/her desire to continue running the business in Australia needs to be genuine.

The applicant and her/his family members (even if they are not migrating572) must meet some health and character requirements, which consist in health examinations, health insurance and the police clearance certificate573. Moreover, the foreigner must sign the Australian Values Statement574 and must have no debts towards the Australian government.

567 World Economic Forum 2016, Global Competitiveness Index 2015-2016, http://www3.weforum.org/docs/gcr/2015-2016/Global_Competitiveness_Report_2015-2016.pdf. 568 The legislative reference is the Immigration Act 1958, consolidated version, http://www.austlii.edu.au/au/legis/cth/consol_act/ma1958118/, and the 1994 Migration Regulations, as amended, https://www.legislation.gov.au/Details/F2016C00379. 569 The other streams are: Investor stream, Significant Investor Stream. 570 Australian Government webpage (2016), SkillSelect, http://www.border.gov.au/Trav/Work/Skil.

571 Australian Government webpage (2016), Business Innovation and Investment visa (subclass 188), https://www.border.gov.au/Trav/Visa-1/188- . 572 Australian Government webpage (2016), Business Innovation and Investment visa (subclass 188), https://www.border.gov.au/Trav/Visa-1/188- 573 Australian Government webpage (2016), Character requirements, https://www.border.gov.au/Trav/Visa/Char; Australian Government webpage, Health requirements, https://www.border.gov.au/Trav/Visa/Heal.

http://www3.weforum.org/docs/gcr/2015-2016/Global_Competitiveness_Report_2015-2016.pdf



http://www.border.gov.au/Trav/Work/Skil



https://www.border.gov.au/Trav/Visa/Char

https://www.border.gov.au/Trav/Visa/Heal


199

The application is points-tested and a specific points test, called innovation points test, is available575 online on the website of the Australian Government. Applicants need to score at least 65 points as pass mark. Points are awarded for age, English language ability, qualifications, experience in business or investment, net personal and business assets, business turnover and innovation576. The applicant must score at least 65 points for the applicatoin to be considered. Normally, the applicant has to be younger than 55, although exceptions can be made in circumstances of exceptional economic benefits. Degrees obtained by Australian universities and in business, science and technology score higher. With regard to the business history, applicants receive points for the years of experience. Points for innovation are awarded for registered patents or deigns, registered trade markers577, joint venture agreements, for export trade578, and for gazelle businesses579. Points for innovation are not necessary to meet the threshold of 65 points, however summed up, they can alone meet the threshold. Table A8.2 lists each factor and shows the points available, in absolute number and as a share of the pass mark.

At the time of invitation, the applicant, and possibly the partner, must show total net business and

personal assets of at least AUD 800,000 (approx. € 530,000) that are lawfully acquired and available

to the applicant.

These requirements are assessed by the Government and no specific body with technical expertise is

involved.

Table A8.2 Points available for each factor of the innovation points test

Factor Description Points Max points for each factor (as % of the 65 pass mark)

Age 18-24 years 20 30 (46%)

25-32 years 30

33-39 years 25

40-44 years 20

45-54 years 15

55 and older 0

English language ability Vocational English 5 10 (15%)

Proficient English 10

Qualifications Australian trade certificate, diploma or bachelor degree

by an Australian education institute; or a bachelor

qualification recognised by an education institution of a

5 10 (15%)

574 Australian Government webpage (2016), Values Statement, https://www.border.gov.au/Trav/Life/Aust/living-in-australia-values-statement-long. 575 Australian Government webpage, Innovation Point Test, http://www.border.gov.au/Forms/Documents/innovation-points-test.pdf. 576 Australian Government webpage, Points test, http://www.border.gov.au/Forms/Documents/innovation-points-test.pdf. 577 “A trademark can be a letter, number, word, phrase, sound, smell, shape, logo, picture, aspect of packaging or any combination of these, used to distinguish goods and services of one business from those of another”, from the Australian Government webpage, Points test, http://www.border.gov.au/Forms/Documents/innovation-points-test.pdf. 578 “Points are awarded when the applicant has had an ownership interest in one or more main businesses that derive not less than 50 per cent of their annual turnover from export trade for at least two of the four fiscal years immediately before the applicant was invited to apply for a visa”, from the Australian Government webpage, Points test, http://www.border.gov.au/Forms/Documents/innovation-points-test.pdf. 579 “Gazelle businesses are newly established businesses experiencing rapid growth during a short period of time”, from the Australian Government webpage, Points test, http://www.border.gov.au/Forms/Documents/innovation-points-test.pdf.

https://www.border.gov.au/Trav/Life/Aust/living-in-australia-values-statement-long


http://www.border.gov.au/Forms/Documents/innovation-points-test.pdf








200

Factor Description Points Max points for each factor (as % of the 65 pass mark)

recognised standard

Bachelor degree in business, science and technology

by an Australian institution; or a bachelor qualification

by an education institution of a recognised standard

10

Special endorsement The nominating state or territory government agency

could decide that your proposed business is of unique

and important benefit to the state or territory where the

nominating government agency is located

10 10 (15%)

Financial assets (Net

business and personal

assets of you and/or your

partner)

AUD 800,000 5 35 (54%)

AUD 1.3 million 15

AUD 1.8 million 25

AUD 2.25 million 35

Business turnover (Annual

turnover in during a period

of at least two years)

AUD 500,000 5 35 (54%)

AUD 1 million 15

AUD 1.5 million 25

AUD 2 million 35

Business experience Not less than four years within the preceding five years 10 15 (23%)

Not less than seven years within the preceding eight

years

15

Business innovation

qualifications

Evidence of registered trademarks 10 65 (100%)

Evidence of formal joint venture agreements 5

Evidence of export trade 15

Evidence of ownership interest in a gazelle business 10

Evidence of receipt of grants or venture capital funding 10

Evidence of registered patents or registered designs 15

State or territory

nomination

Special endorsement (limited places) 10 10 (15%)

Fee and obligations for extension

The application fee amounts to AUD 4,780 (approx. € 3,172). However, applicants who do not meet

the English language requirement (functional English) must pay a second instalment equals to AUD

9,795 (approx. € 6,536).

To show that the foreign entrepreneur, meets the objectives of the scheme, s/he is expected to fulfil at

least one of the following requirements, which will be assessed at the moment of the renewal:

■ develop business links with international markets

■ create or maintain employment in Australia

■ export Australian goods

■ produce goods or services that would otherwise be imported

■ introduce new or improved technology

■ add to commercial activity and competitiveness within the Australian economy.


201

This visa is permanent and is valid for 4 years and 3 months. After this period, it can be extended

once for further 2 years, under the Business Innovation Extension Stream.

Rights

The foreign nationals holding a Business Innovation Visa is entitled to establish his/her business in

Australia, travel in, out and across Australia, bringing family members on the same visa and, after one

successful year, apply for the permanent visa (subclass 888 – see below).

Permanent visas

The available permanent business580 visas are:

■ Business Owner visa (subclass 890),

■ State/Territory Sponsored Business Owner visa (subclass 892),

■ Business Innovation and Investment visa (subclass 888)

■ Business Talent visa (subclass 132).

Three of them require that the applicant has spent some time on a temporary business visa. The Business Owner visa (subclass 890) and the State/Territory Sponsored Business Owner visa (subclass 892), currently still in force, were designed as the continuation of the Business Owner visa (subclass 160) and the State/Territory Sponsored Business Owner visa (subclass 163), after one year (in the previous two years) of residence as successful entrepreneur in Australia. However, since the temporary schemes were closed in 2012, in the reminder the Business Owner visa (subclass 890) and the State/Territory Sponsored Business Owner visa (subclass 892) will not be further described in this fiche. The Business Innovation and Investment visa (subclass 888) was designed as the continuation of the Business and Innovation visa (subclass 188), currently in force, and it is described in details in Table 2.2. The Business Talent visa (subclass 132) is the only scheme that does not require a previous residence period and was specifically designed for “high-calibre business owners”581. It has two streams: the Business History Stream and the Venture Capital Entrepreneur. There are some common characteristics the applicant must satisfy, e.g. age (under 55), a proven successful business history or investment record and no involvement in unacceptable activities, a bona fide and realistic commitment to reside, own and manage the business or investment in the State or Territory that nominated the applicant. In table 2.2 below, the Significant Business History Stream is analysed. The Venture Capital Entrepreneur Stream targets entrepreneurs who have entered into a formal agreement with a member of the Australian Venture Capital Association and have secured at least AUD $1 million in funding for a ‘start-up phase, product commercialisation, business development or expansion of a high value business idea in Australia. Table A8.3 compares the Business Innovation and investment Visa (subclass 888) with the Business Talent Visa (subclass 132) - Significant Business History stream - in terms of requirements, application fees and rights.

580 The legislative reference is the Immigration Act 1958, consolidated version, http://www.austlii.edu.au/au/legis/cth/consol_act/ma1958118/, and the 1994 Migration Regulations, as amended, https://www.legislation.gov.au/Details/F2016C00379. 581 Australian Government webpage, Business Talent Visa, https://www.border.gov.au/Trav/Visa-1/132-





V1: 18th April 2016 202

Table A8.3 Permanent visas, subclass 888 and 132

Business Innovation and investment Visa (subclass 888) Business Talent Visa (subclass 132) - Significant Business History stream582

Previous visa/process

The applicants must have been on one of the following temporary visas for at least one year in the two years immediately before the application

a Business Innovation visa (subclass 188)

a Special Category visa (subclass 444)

Business (Long Stay) visa (subclass 457IE)

The application may be submitted from within or outside Australia. The applicant must send an expression of interest first, through the SkillSelect, and receive a nomination and an invitation to apply then. The applicant does not need to show s/he stayed on a temporary visas before the application.

Requirements Ownership and turnover of the main business(es)

The foreigner must show to have, in relation to the main business (or main businesses): - had an ownership interest and a direct and continuous management in Australia for the previous two years - had an annual turnover of at least AUD 300,000 in the previous 12 months (this requirement may be waived if the business was set up in a specified regional area of Australia) - a certain percentage in the previous year equals to:

if the turnover is less than AUD 400,000 per year, 51 % if the turnover is higher than AUD 400,000 per year, 30

% 10 % for a publicly listed company

Ownership and turnover of the main business(es)

The foreigner must show to have, in relation to the main business (or main businesses): - a total annual turnover of at least AUD 3 million in at least two of the four fiscal years - a certain percentage in the previous year equals to:

if the turnover is less than AUD 400,000 per year, 51 % if the turnover is higher than AUD 400,000 per year, 30 % 10 % for a publicly listed company

Achievements in assets and jobs creation

Moreover, the applicant must have achieved at least two of the following requirements throughout the previous year:

■ a net value of business assets of at least AUD 200,000 in the main business

■ a net value of personal and business assets of at least AUD 600,000

■ employed at least the equivalent of two full-time employees who are Australian or New Zealander citizens

Assets

The applicant (possibly combined with the partner) must show, in relation to the main business (or main businesses):

■ total net assets of at least AUD 400,000 as the ownership interest for least two of the four fiscal years immediately

■ if the qualifying business(es) was a publicly listed company, a shareholding of at least 10% of the total issued capital

■ net business and personal assets of at least AUD1.5 million that are legally acquired and can be transferred to Australia within two years after the visa is granted

582


V1: 18th April 2016 203

Business Innovation and investment Visa (subclass 888) Business Talent Visa (subclass 132) - Significant Business History stream582

or Australian permanent residents, excluding the foreigner’s family members.

Other requirements

Finally, the foreigner must have complied with the regulation, i.e. obtained an Australian Business Number and submitted the Business Activity Statements to the Australian Taxation Office for the previous two years.

Other requirements

The applicant must have a successful overall business career, must not have been involved in unacceptable business activities and finally must show a genuine desire to own and maintain a management role in a business in Australia. Contrary to the Business and Innovation visa, here the applicant is not on the Australian territory yet; therefore, some first-time applicants criteria applies:

■ s/he must be younger than 55 years of age, although this requirement can be waived in exceptional circumstances,

■ s/he meet some health and character requirements (see temporary visas section).

Fees AUD 2,305; if the English requirement is not met, applicants have to pay a second instalment equals to AUD 1,155.

AUD 6,990; if the English requirement is not met, applicants have to pay a second instalment equals to AUD 9,795.

Rights

The rights that come along the permanent visa are: ■ the possibility to permanently stay in Australia ■ to work and study in Australia ■ to enrol in Medicare, which is the public-funded

system for health care ■ apply for citizenship, if eligible ■ sponsor eligible relatives to migrate to Australia ■ be absent from Australia for up to 5 years, after

which period a return visa must be applied for ■ be able to apply to Special Benefit583, if financial

hardship caused by circumstances beyond the person’s control occurs

The rights that come along the permanent visa are: ■ the possibility to permanently stay in Australia ■ to work and study in Australia ■ to enrol in Medicare, which is the public-funded system for

health care ■ apply for citizenship, if eligible ■ sponsor eligible relatives to migrate to Australia ■ be absent from Australia for up to 5 years, after which period a

return visa must be applied for

583 Australia Government webpage (2016), Special Benefit, https://www.humanservices.gov.au/customer/services/centrelink/special-benefit?utm_id=7

https://www.humanservices.gov.au/customer/services/centrelink/special-benefit?utm_id=7


V1: 18th April 2016 204


There are three features of the Australian schemes that differentiate them from their European

counterparts:

■ the high level of capital required

■ the two-step application process, implying the candidates’ pre-selection through the points-based

system and the invitation to apply from regional and government body584

■ the possibility to immediately obtain a permanent visa, if the requirements are met.

Foreigners on the Business Talent Visa (subclass 132) undergo a monitoring process by the

government or the first 3 years585. The monitoring serves a twofold objective: compliance checking, i.e.

verifying that the foreigner meets the visa requirement and taking actions if s/he does not, and

evaluating the scheme, i.e. checking that the objectives of the scheme are in fact met. The foreigner is

asked to fill in a survey and report on the business activities s/he is running.

The available statistics up to March 2014 are the following586:

■ For the Business Talent (permanent) (subclass 132), in the period 2012-13 97 applications were

lodged and 15 were granted, while, in the period 2013-14 (up to March 2014), 144 were lodged

and 57 granted.

■ For the Business Innovation and Investment programme (temporary) (subclass 188) in the period

2012-13, 429 applications were lodged and 46 were granted, whereas in the period 2013-14 (up to

March 2014), 739 applications were lodged and 342 granted.

■ For the Business Innovation and Investment programme (permanent) (subclass 888), in the period

2012-13, 5 applications were lodged and 0 were granted while in the period 2013-14 (up to March

2014) 12 were lodged and 11 granted587.

The migration policy in Australia is frequently subject to review and amendment by the government.

In 2012, the Business Skills programme was replaced by the Business Innovation and Investment

Programme with the aim to simplify the visa options, to ensure better economic outcomes from higher

threshold criteria, to better target migrants and in general to “ensure that the strategic objectives of the

progammes could be met in a changed business environment”588.

A monitoring report589 was subsequently drafted in March 2015, but it was considered to be too early

to perform an evaluation of the programme itself. However, some possible amendments were

considered on the points below:

■ The use of points to assess the business potential, in relation to previous business experience,

was contested as cumbersome and not suitable to grasp the entrepreneurial skills of potential

migrants. Moreover, the fact that no technical experts but rather bureaucrats assessed the

application was contested, as they may not formulate informed judgements.

■ Another element of the debate was the required threshold investment. In 2012, the government

increased the threshold and this was considered a discouraging factor for applicants. Considering

that the threshold are very high compared to rest of OECD countries (typically between 20,000

584 For a discussion on the expression of interest and its applicability in the EU, Desiderio, M. V. and Hooper, K. (2016). The Canadian Expression of Interest. A model to manage Skilled migration to the European Union. Mpi Europe. 585 Australian Government Webpage (2016), Monitoring https://www.border.gov.au/Trav/Work/Moni 586 Australian migration statistics normally include also family members, who migrate on the same visa of the main applicant. 587 In the original text of the Report, 11 were lodged and 12 granted. See: he Parliament of the Commonwealth of Australia (2015), “Report of the Inquiry into the Business Innovation and Investment Programme”. 588 ibid 589 The Parliament of the Commonwealth of Australia (2015), Report of the Inquiry into the Business Innovation and Investment Programme, available at Parliament.

https://www.border.gov.au/Trav/Work/Moni


V1: 18th April 2016 205

and 50,000$), the criticism was that Australia would be less attractive at the advantage of its

international competitors.

■ Whether to include specific elements for young entrepreneurs and start-up founders was also

discussed in 2014, as Australia did not have a specific scheme for them.

Overall, the Joint Standing Committee on Migration that conducted the review concluded that there

was no enough information to introduce any amendments.

This country fiche described the evolution of the Australian immigration system and the current permits

in place. However, several open issues remain to be addressed:

■ In the points system, the criteria to invite the candidates to apply for a visa seem to be

discretionary and they vary by territorial government. Some of the bodies require a personal

interview from candidates, others do not. The selection criteria need to be more transparent.

■ Temporary migrants, after a certain period spent on the territory, can either apply for a settlement

permit or can renew their temporary permits. It is not clear how the procedures to renew the permit

are conducted and how meeting the obligations is assessed.

■ From the information provided by official sources, it seems that the Australian schemes for

entrepreneurs consist ‘only’ in a visa; whereas it is emphasised by scholarly research590 that what

enhances the attractiveness of a country is not merely the existence of a visa, but rather the

ecosystem around it. It is not clear, however, whether Australia offers also some ecosystem-

related incentives to potential migrants.

■ The results of the ex-post evaluation carried out in view of the overhaul held in 2012 are not

available. However, these could be helpful to understand in which specific sense the precedent

schemes showed weaknesses in meeting the set objectives.

■ The latest available statistics date back to March 2014591, when the new schemes had been in

place only for two years. More recent statistics will be important to understand the effects of the

Australian schemes. Moreover, the results of the monitoring of the Business Talent Visa (subclass

132) carried out on individual holders could provide insights.

■ The schemes do not have sectoral limitation, however, an in-depth analysis of the statistics could

highlight the trends and the most popular sectors.

■ Finally, the objectives of the Australian scheme are not entirely clear. Therefore, it is also not clear

which matrix is supposed to be used to evaluate whether the schemes have been effective in

meeting their objectives. For instance, there are multiple economic development objectives that

are not necessarily consistent which each other. Creating jobs may conflict with building innovative

companies. Likewise, economic objectives and migration control objectives could conflict as, for

instance, the age, the language or the good character requirements can serve migration control

purposes but not economic development purposes.

References

■ Jock Collins (2008), “Immigrant entrepreneurs in Australia: Regulations and responses”, in

Migracoes

■ The Parliament of the Commonwealth of Australia (2015), Report of the Inquiry into the Business

Innovation and Investment Programme, available at Parliament.

■ Australian Government Webpage (2016), Business Talent Visa (132)

https://www.border.gov.au/Trav/Visa-1/132-, Business Innovation and Investment Visa (188)

https://www.border.gov.au/Trav/Visa-1/188-, Business Innovation and Investment Visa (888),


590 Desiderio, M. V (2014), Polices to support immigrant entrepreneurs, mpi 591 The Parliament of the Commonwealth of Australia (2015), Report of the Inquiry into the Business Innovation and Investment Programme, available at Parliament.




V1: 18th April 2016 206

■ OECD (2010), Open for Business. Migrant Entrepreneurship in OECD countries, available at

http://www.keepeek.com/Digital-Asset-Management/oecd/social-issues-migration-health/open-for-

business_9789264095830-en#page1

■ Australian Government webpage (2016), SkillSelect, http://www.border.gov.au/Trav/Work/Skil

■ Australian Government webpage (2016), Business Innovation and Investment visa (subclass 188),


■ Australian Government webpage (2016), Character requirements,

https://www.border.gov.au/Trav/Visa/Char; Australian Government webpage, Health requirements,

https://www.border.gov.au/Trav/Visa/Heal.

■ Australian Government webpage (2016), Values Statement,


■ Australian Government webpage, Points test, https://www.border.gov.au/Trav/Visa-1/188-

■ Australia Government webpage (2016), Special Benefit,


■ Australian Government Webpage (2016), Monitoring https://www.border.gov.au/Trav/Work/Moni

■ Australian Government webpage, Innovation Point Test,

http://www.border.gov.au/Forms/Documents/innovation-points-test.pdf.

■ Desiderio, M. V. and Hooper, K. (2016). The Canadian Expression of Interest. A model to manage

Skilled migration to the European Union

■ Desiderio, M. V (2014), Polices to support immigrant entrepreneurs, mpiImmigration Act 1958,

consolidated version, http://www.austlii.edu.au/au/legis/cth/consol_act/ma1958118/,

■ Migration Regulations 1994, as amended, https://www.legislation.gov.au/Details/F2016C00379



http://www.border.gov.au/Trav/Work/Skil


https://www.border.gov.au/Trav/Visa/Char

https://www.border.gov.au/Trav/Visa/Heal




https://www.border.gov.au/Trav/Work/Moni





V1: 18th April 2016 207

Annex 9 Country Fiche: Canada

Key Messages:

The Canadian Federal Business Immigration program focuses on foreign nationals

who wish to start a business activity in Canada. Since 2013, the applicants can only

apply for one of the two programmes below:

The Self-Employed Persons Programme;

The Federal Start-Up Visa Programme.

This Canadian immigration Self-Employed Programme (2013) is designed to attract

applicants, who intend to become self-employed in Canada. To qualify for this

program, the applicant must demonstrate that he/she has relevant agricultural,

artistic, or athletic experience, of interest for in Canada and to make a significant

contribution to his/her field.

To qualify as a self-employed person, the applicant must have two years of relevant

experience and demonstrate the intent to become self-employed in Canada. In

addition, the applicant must also score at least 35 points on a selection criteria, which

determine whether he/she is able to make an economic contribution to Canada.

The Start-Up Visa Programme launched in 2013, is a pilot programme for five years

granting permanent residence to immigrant entrepreneurs. It targets immigrant

entrepreneurs with the necessary skills to build innovative businesses in Canada that

can create new jobs and compete on a global level.

Under this Programme, applicants must be admitted into a business incubator, secure

at least CA$75,000 in investments from an angel investor group, or secure at least

CA$200,000 in investments from a venture capital fund. The target groups of this

programme differs from those immigrants who enter self-employment as a result of

poor job prospects.


V1: 18th April 2016 208


The Canada’s immigration system is built on a points-based assessment of candidates, considering a

range of factors to determine immigrant eligibility and impacted by a range of additional variables,

such as employer or provincial nomination592. The point-based system was introduced in 1967593.

Since its introduction, Canada tried to ensure that immigration complies with the country’s economic

needs and interests.

The immigration system is split into two main parts: Permanent Immigration (i) and Temporary Visa

Status (ii)594. The Permanent Immigration comprises three subgroups:

■ The Family Class;

■ The Refugee Class; and

■ The Economic Class.

The Economic Class is composed by:

■ Provincial Nominee (PNP) – includes workers and businesses;

■ Federal Immigration Programme (skilled workers, investors, entrepreneurs and self -employed

individuals).

The category of entrepreneurs was regulated under the Federal Immigration Programme, which

requires certain qualifications to be eligible. For instance, it required a post-secondary education and

skill level of O595, A596 and B597, on the National Occupation Classification (NOC). The NOC is a

system used by the Government of Canada to classify jobs, which are grouped based on the type of

work and the types of work duties.

An important part of the Federal Immigration Regulations was the language test to prove language

proficiency of one of the two official languages (IELTS for English and the TEF for French). As a final

step, the applicant had to pass a medical examination and background check.

In addition to the permanent residence programs, the Temporary Visa status included three groups:

Visitor, Student and Work permit. There are two temporary schemes to attract skilled workers in

Canada:

■ The Temporary Foreign Worker Program (TFWP)598 - applications through the TFWP must

always be supported by a job offer and a positive Labour Market Impact Assessment (LMIA);

■ The International Mobility Program (IMP). The IMP is mostly regulated by international

agreements and applications are exempt from the requirement for LMIAs. The majority of entrants

under the TFWP are low-skilled, although there is a stream for 'high-wage' workers.

The Canada’s Federal Business Immigration system is designed for third-country nationals, who

wish to start their business experience and immigrate to Canada599. Applicants may only apply for one

of the four programmes listed below and cannot change the programme once the application is

submitted:

■ Immigrant Investor;

592 Pointed –based immigration systems: Canada Available at: http://www.loc.gov/law/help/points-based-immigration/canada.php#immigration (Accessed on 25 February 2016) 593 Ibid 594 Government of Canada website- http://www.canadaimmigrationvisa.com/visatype.html (Accessed on 25 February 2016) 595 This category includes management jobs 596 This category includes professional jobs: e.g. doctors, dentists, architects 597 This category includes technical jobs and skilled trades, e.g. chefs, electricians, plumbers 598 Temporary Foreign Programme - http://www.cic.gc.ca/english/resources/publications/employers/temp-foreign-worker-program.asp (Accessed on 25 February 2016). 599 https://www.canadianimmigration.com/immigration-to-canada/investors-entrepreneurs-and-self-employed/#sthash.lLMc2u5m.

http://www.loc.gov/law/help/points-based-immigration/canada.php#immigration


http://www.canadaimmigrationvisa.com/visatype.html

http://www.cic.gc.ca/english/resources/publications/employers/temp-foreign-worker-program.asp


https://www.canadianimmigration.com/immigration-to-canada/investors-entrepreneurs-and-self-employed/#sthash.lLMc2u5m

https://www.canadianimmigration.com/immigration-to-canada/investors-entrepreneurs-and-self-employed/#sthash.lLMc2u5m


V1: 18th April 2016 209

■ Federal Entrepreneur;

■ Self-Employed Persons;

■ Start-Up Visa Program.

Each of the aforementioned programmes have their own criteria and requirements. The first two

programmes (Investor and Federal entrepreneur) are permanently closed. The Self-employed and

Start-up Visa programme will be elaborated below (Section 2).

Canada has been appealing immigrant entrepreneurs for decades. The economic objectives of the

Canadian government are to develop further the national market size, improve the economy structure,

fill labour shortages and attract foreign entrepreneurs. Following the Economic Action Plans 2012600,

the need of exploring ways to reform business immigration and render it more flexible was

emphasised. Under the Economic Action Plan in 2013601, the Government launched a new Start-Up

Visa pilot program for immigrant entrepreneurs.

The following year, the Economic Action Plan 2014602 announced the Government`s intention to end

the Federal Immigrant Investor and Entrepreneur Programmes, as they had very limited economic

impact. A large number of immigrant entrepreneurs were not making a long-term economic

contribution to Canada603. As a consequence, on 19th June 2014, Canada put an end to the Federal

Entrepreneur Programme which aimed to attract experienced foreign entrepreneurs. The Investor

Programmes was replaced by the Immigrant Investor Venture Capital (IIVC) Pilot Program (launched

in 2015).

On 19 June 2014, the Federal Immigration Programme was terminated604. The reason behind its

termination was because its ineffectiveness in luring foreign investment605.

The Provincial Nominee are still applicable but under specific criteria as it analysed in Section 2.2. The

above-mentioned temporary schemes are also available.


Foreign nationals willing to establish in Canada and start-up a business, may apply for one of the

programmes: The Canadian Start-up visa Programme or Self-Employed Programme.

The Federal Start-up visa Programme

The Canadian Start-up Visa Programme adopted in April 2013606 was the first of its kind in the

world. The programme replaces the previous Federal Entrepreneur Programme, requiring the

immigrant entrepreneur to recruit one Canadian for one year. The main aim is to connect successful

entrepreneurs with private sector organizations in Canada, in order to provide funding as well as

guidance on establishing and operating a business in Canada607. Under this programme, applicants

are granted the Canadian permanent residency. The programme applies to all provinces of Canada

(except Quebec). The program has set a quota of 2,750 visas per year. In 2014, only five visas were

600 Economic Action Plan 2012, page 19 – Available at: http://www.budget.gc.ca/2012/plan/pdf/Plan2012-eng.pdf (Accessed on 25 February 2016). 601 Economic Action Plan 2013, page 82 – Available at: http://www.budget.gc.ca/2013/doc/plan/budget2013-eng.pdf (Accessed 25 February 2016). 602 Economic Action Plan 2014 – Available at: http://actionplan.gc.ca/en/blog/economic-action-plan-2014 (Accessed on 25 February 2016). 603 Ibid 604 http://www.cic.gc.ca/english/immigrate/business/entrepreneurs (Accessed on 26 February 2016). 605 http://www.cic.gc.ca/english/resources/evaluation/ (Accessed on 27 April 2016). 606 Government of Canada Website- Start-up Available at http://www.cic.gc.ca/english/immigrate/business/start-up/ (Accessed on 25 February 2016) 607 J, Goube (2015), “Worldwide start-up visa policies compared”, Available at: www.migreat.com (Accessed on 29 February 2016).

http://www.budget.gc.ca/2012/plan/pdf/Plan2012-eng.pdf

http://www.budget.gc.ca/2013/doc/plan/budget2013-eng.pdf


http://actionplan.gc.ca/en/blog/economic-action-plan-2014

http://www.cic.gc.ca/english/immigrate/business/entrepreneurs

http://www.cic.gc.ca/english/resources/evaluation/

http://www.cic.gc.ca/english/immigrate/business/start-up/


http://www.migreat.com/


V1: 18th April 2016 210

issued. 30 more visa are reportedly being processed at the moment608. The programme runs under

three stages:

■ The entrepreneur is matched with a suitable qualifying business;

■ The entrepreneur will quickly receive a temporary work permit;

■ The approved entrepreneur and family members will receive Canadian permanent residence

This is a pilot program running for five years (2013-2018) and it is foreseen to process a maximum of

2,750 applications per year609. If this program proves successful, the Canadian Government may

choose to establish the Start-Up Visa Program permanently.

Self-Employed Programme

As regards the Self-employed Persons Programme, the scheme applies to three main categories of

applicants: Farmers, Cultural activity individuals and Athletic activity individuals. The rationale behind

this programme610 is to make a significant contribution to cultural activities or athletics and manage a

farm in Canada. The Province of Quebec has its own Self-employed Programme. The applicants must

have two years of applicable experience, possess a personal net worth of CA$100,000, and come to

Quebec to create employment for his/herself by practicing a profession defined in the National

Occupational Classification. Prospective applicants must also meet applicable occupational entry or

licensing requirements611.

Provincial Entrepreneur Programmes

Individuals, with may be eligible to apply also under the one of many Provincial Entrepreneur

Programmes612. These entrepreneur programs are administered by individual provinces. The

programs vary in the requirements to qualify but generally refer to a minimum net worth of CA $350,000 (around €245,000)613. The full overview of each programme is provided in the Error!

Reference source not found. below.

Table A9.1 Individual Provincial Entrepreneur Programmes614

Provincial entrepreneur programmes

Description pf the criteria

British Columbia

Province – Possess a net worth of at least CA$800,000 (around €560,000);

– Make an investment of at least CA$400 000 (around €280,000) to establish a

business or purchase a business in B.C.;

– Create at least three jobs for Canadian citizens or permanent residents;

– Day-to-day management of the business activity;

– Sign a performance agreement with B.C. prior to start the business;

N.B This programme is currently under review.

608 Five visas in 20 months. Is Canada’s Startup Visa program achieving what it set out to do? http://business.financialpost.com/entrepreneur/fp-startups/five-visas-in-20-months-is-canadas-startup-visa-program-achieving-whatit-set-out-to-do?__lsa=f330-d07b 609 https://www.canadianimmigration.com/immigration-to-canada/investors-entrepreneurs-and-self-employed/start-visa-program/#sthash.fDMalxVZ.dpuf (Accessed on 26 February 2016)l. 610 Self-Employed programme http://www.immigration.ca/en/self-employed-programs.html (Accessed on 26 February 2016). 611 Ibid 612 http://www.immigration.ca/en/provincial-entrepreneur-programs.html (Accessed on 26 February2016) 613 Ibid 614 http://www.immigration.ca/en/provincial-entrepreneur-programs.html

http://business.financialpost.com/entrepreneur/fp-startups/five-visas-in-20-months-is-canadas-startup-visa-program-achieving-whatit-set-out-to-do?__lsa=f330-d07b


https://www.canadianimmigration.com/immigration-to-canada/investors-entrepreneurs-and-self-employed/start-visa-program/#sthash.fDMalxVZ.dpuf


http://www.immigration.ca/en/self-employed-programs.html

http://www.immigration.ca/en/provincial-entrepreneur-programs.html

http://www.immigration.ca/en/provincial-entrepreneur-programs.html


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Saskatchewan

Immigrant Nominee

Program’s Entrepreneur

– A net worth of CA$300,000 (around €210,000) legally obtained;

– Three years’ of relevant entrepreneurial or business management experience;

– Intention to settle in Saskatchewan Province;

– A minimum investment of CA$150,000, or own 33.3% of the business;

– Participate in the day to day management of the business;

– Deposit a CA$75,000 (around €53,000)with the province (refunded once the

business has become operational)

Manitoba Provincial

Nominee Immigration

Program for Business

– A minimum personal net worth of $350 000 (around €245,000);

– Three years of business or farm ownership experience (or in a senior

management role);

– Invest CA$150,000 into establishing or purchasing 33.3% of a business in

Manitoba.

– Deposit CA $75 000 to the Government of Manitoba which will be refunded

when the investment is made.

N.B This programme is not accepting new applications until further notice.

Ontario’s provincial

nominee program

(Opportunities

Ontario)615

– Actively involved in the management of the business;

– Control at least 33.334% of the equity in the business, or make a minimum $1

million (around €700,000) investment in the business;

– Not have the option of redeeming the investment after a specified period;

– Invest the capital in the business.

New Brunswick

Provincial Nominee

Program for Busines616

– Proven management experience in three of the last five years;

– Have sufficient funds to finance the first phase of a planned business venture;

– Have a personal net worth of at least CA$300,000 (around €210, 000);

– Have an approved business plan or business proposal;

– Active managerial role.

– Have an understanding of the business environment in New Brunswick and

Complete an exploratory visit to New Brunswick;

– Have at least 50 points on a self-assessment grid;

– Be willing to sign an agreement to settle permanently in New Brunswick;

– Make a CA $75,000.00 conditionally refundable deposit prior to nomination.

N.B The New Brunswick Provincial Nominee Program for business is not accepting

new applications until further notice.

Prince Edward Island

Provincial Nominee

Program for Busines

– Have a verifiable personal net worth of CA$600,000 (around €420,000) legally

acquired;

– A minimum investment of CA$150,000 (around €105,000)to establish or

purchase an eligible business;

– Control 100% of the business into which investment is made and active

manage it;

– Sign an agreement and make a CA$150,000 (€105,000) deposit with the

province, refundable upon fulfilling the terms of the agreement;

– Have sufficient funds to cover the business investment;

– Minimum level of English or French.

North West Territories’

Entrepreneur – Have a personal net worth of:

– At least CA$500,000 (around €350,000) if starting or buying a business;

615 http://www.immigration.ca/en/ontario-immigration.html#investor (Accessed on 29 February 20116). 616 http://www.immigration.ca/en/new-brunswick-immigration.html#business (Accessed on 29 February 2016).

http://www.immigration.ca/en/ontario-immigration.html#investor

http://www.immigration.ca/en/new-brunswick-immigration.html#business


V1: 18th April 2016 212



Programme617 – At least CA$250,000 if starting or buying a business outside Yellowknife, NWT.

– Deposit CA$75,000 and released upon completion of a Performance

Agreement based on a business proposal;

– Knowledge and understanding of the NWT and its economy;

– Good communication skills;

– Necessary experience and education to successfully implement the business

plan.

Yukon’s Business

Nominee Programme618 – A personal net worth of at least $250 000 (around €175,000);

– Make an investment of at least $150 000 (€105, 000);

– Demonstrate reasonable knowledge of Yukon and its economy as well as

reasonable communication skills, necessary experience and education to

successfully implement business plan.

As self-employed:

– Provide a service such as: doctors, nurses, electrical engineers and electronic

engineers;

– Have good communication skills and reasonable knowledge of Yukon and its

economy;

– Have a business plan and sufficient resources

Source: ICF based on the information under each Provincial Programme (Immigration Canada

Website)

Admission criteria

Start-Up Visa Programme

Under the Start-Up Visa Programme, any immigrant entrepreneur wishing to start up a business in

Canada should satisfy the following criteria619:

■ Support: obtain the support of one of several designated Canadian organizations (angel investor

group, venture capital fund or business incubator). The investor organization has to provide a

Commitment Certificate directly to Citizenship and Immigration Canada, summarizing the details of

the commitment made with the applicant.

■ Investment: secure an investment of at least CA$200,000 (around €140, 000) (from a designated

venture capital fund) or a secure a minimum of CA$75,000 (around €53,000) (from a designated

angel investor group);

■ Language proficiency: provide language test results from an approved agency, and meet the

minimum level of CLB 5 in either English or French.

■ Education: have completed at least one year of study at a post-secondary institution.

■ Sufficient settlement funds: have sufficient settlements funds to support themselves and their

family once they immigrate to Canada. The amount of money required depends on the number of

family members.

■ Security and medical clearance: the applicant and accompanying family members must

undergo a security clearance and a medical examination.

For 2014, the sufficient amount of money required for family members is outlined below:

617 http://www.immigration.ca/en/northwest-territories-and-nunavut-immigration.html#entrepreneurbus (Accessed on 26 February 2016). 618 http://www.immigration.ca/en/yukon-immigration.html (Accessed on 29 February 2016). 619 Ibid

http://www.immigration.ca/en/northwest-territories-and-nunavut-immigration.html#entrepreneurbus

http://www.immigration.ca/en/yukon-immigration.html


V1: 18th April 2016 213

Table A9.2 Sufficient settlement fund per family member

Family members Amount of money required

1 CA$11,824 (around €8,000)

2 CA$14,720 (around €10,135)

3 CA$18,097 (around €13,000)

4 CA$21,971 (around €15,000)

5 CA$24,920 (around €17,000)

6 CA$28,105 (around €20,000)

7 (or 7+) CA$31,291 (around €22, 000)

Source: Canadian Immigration website

In addition, the Start-Up Visa Programme also include a Peer Review Process620. This process is

designed to make sure that the deals made between the investment organizations and immigrant

entrepreneurs are legitimate. Panels have been established by an industry association that represents

the type of investment organization making the commitment. For instance, in the case of an angel

investor group, the National Angel Capital Organization would be responsible for the peer review

panel621.

In cases, where the group making the commitment is a venture capital fund, Canada’s Venture Capital

and Private Equity Association would be the authority responsible622. The assessment of the peer

review panel is not legally binding on the immigration officer. It will only confirm that the investment

organization has carried out the proper checks and investigations according to industry standards.

Under the Start-Up Visa Programme, applicants are first selected by a province if they satisfy the basic

requirements. These basic requirements include623:

■ Satisfy the minimum language requirements in English or French (CLB 5 in all abilities);

■ Have obtained at least one year of post-secondary education;

■ Have sufficient financial resources to settle in Canada;

■ Plan to settle in a province other than the Province of Quebec; and

■ Pass Canadian security and medical clearances.

Once selected, they may then apply to Citizenship and Immigration Canada for permanent residence.

Self-Employed Programme

Under the Self-Employed Persons Programme, the criteria to be satisfied under this programme are

the following624:

■ Have at least 2 years’ experience of self-employment in cultural activities or in athletics, and/or

have farm management experience;

■ Have sufficient funds to support their own or their family members;

■ Have the intention and capacity to establish a business that will generate self-employment;

■ Make a significant contribution to the cultural or athletic life of Canada and manage a farm in

Canada;

620 http://www.canadavisa.com/the-entrepreneur-start-up-visa-program.html#cgAHbCyxWfqkBayw.99 (Accessed on 29 February 2016). 621 Ibid 622 Ibid 623 http://www.canadavisa.com/the-entrepreneur-start-up-visa-program.html (Accessed on 27 April 2016). 624 http://www.workpermit.com/canada/business1_self_employed.htm (Accessed on 29 February 2016).

http://www.canadavisa.com/the-entrepreneur-start-up-visa-program.html#cgAHbCyxWfqkBayw.99

http://www.canadavisa.com/the-entrepreneur-start-up-visa-program.html

http://www.workpermit.com/canada/business1_self_employed.htm


V1: 18th April 2016 214

■ Earn sufficient points in the selection process to meet the pass mark. The selection process

include the following criteria such as education, proficiency in Canadian official languages, work

experience, age, and adaptability factors to life in Canada.

Once applicants are found to meet the aforementioned criteria, they have to be assessed based on

the selection criteria outlined in the Table A9.3 below. Applicants must meet a minimum of 35 point out

of 100 potential points in order to immigrate to Canada as a self-employed person625.

Table A9.3 Selection criteria for self-employed persons

Criteria Points

Education 25

Experience 35

Age 10

Language proficiency (English or French) 24

Adaptability 6

Source: Self-Employed Persons Program website


Table below provides on overview of the main application procedure and fees required under both

programmes: Start-Up Visa Programme and Self-Employed Persons Programme:

Table A9.4 Application requirements for entrepreneurs

Start-Up Programme626 Self-Employed Persons627

Application The applicant should fill out the required

form (following the guidelines provided in

the website of Government of Canada)

and validate the Generic Application

Form for Canada online.

The applicant should print out, sign and

date the validated application should be

printed including the barcode page(s).

The application is submitted to the

Centralized Intake Office.

The applicant should fill in the Generic Application

Form for Canada (IMM 0008) online.

In addition, the applicant should fill out the also the

following:

– Background/Declaration form (IMM 5669).

This includes the detailed personal

information (jobs, period of unemployment,

study, vacations);

– Dependants Declaration (if applicable);

– Declaration to intend reside in Canada;

– A list of self-employed persons.

Assessment of

the application

The Centralized Intake Office (CIO)

contact the applicant when it receives

the complete application. An officer will

let you know what you need to do and

what will happen next.

The Citizenship and Immigration

Canada (CIC) verify the filled out

application forms correctly and the paid

your processing fee.

The application is assessed by the Citizenship and

Immigration Canada (CIC). The CIC assess the

following:

– If the filled out application forms correctly and

signed;

– If the processing fee is duly paid.

– If there is need for additional information.

The Centralized Intake Office (CIO) confirms the

receipt of the application.

625 Canadian Immigration – Self-Employed Programme https://www.canadianimmigration.com/immigration-to-canada/investors-entrepreneurs-and-self-employed/self-employed-persons-program/ (Accessed on 26 February 2016). 626 Please not that the Province of Quebec is in charge of its own start-up program available at: http://www.immigration-quebec.gouv.qc.ca/en/home.html 627 See http://www.cic.gc.ca/english/pdf/kits/forms/IMM5784E.pdf (Accessed on 27 April 2016). Important note: The province of Quebec runs its own business immigration program available at: http://www.immigration-quebec.gouv.qc.ca/en/home.html

https://www.canadianimmigration.com/immigration-to-canada/investors-entrepreneurs-and-self-employed/self-employed-persons-program/


http://www.immigration-quebec.gouv.qc.ca/en/home.html

http://www.cic.gc.ca/english/pdf/kits/forms/IMM5784E.pdf




V1: 18th April 2016 215

Start-Up Programme626 Self-Employed Persons627

Once the application is approved by the

CIC, a permanent resident visa is issued.

This visa includes the Confirmation of

Permanent Residence (COPR) and the

entry visa.

Fees The applicant has to pay the required fees.

1. The processing fee for him/herself and family members accompanying him to Canada.

This include:

– Applicant Processing fees: CA$1,050 (around €735);

– Spouse/partner: CA$1,050 (around €400)

– Dependent children: CA $150 (around €105)

2. The Right of Permanent Residence Fee (in case of approval)

3. Other fees

– Medical exam fees (depending on medical exams fees needed);

– Police certificate from the country of origin;

– Language test (depending on the level);

– Services at a Visa Application Centre (if applicable).

Application

processing

times

Processing times are not available628. The processing time of the applications vary

based on the visa office receiving it.

Source: Government of Canada website

The Citizenship and Immigration Canada (CIC) department selects third country nationals as

permanent and temporary residents. This department defines the conditions for entering and

remaining in Canada and assist immigrants settle and integrate in Canada.

Unlike entrepreneurship programs in other countries, successful applicants in Canada to this can

benefit from permanent residents status with no conditions related to the success of their business629.


All applicants under the aforementioned schemes have the same working standards and equal labour

rights to residents born in Canada. Once permanent residents, entrepreneurs and self-employed

persons do not face any restrictions to their labour market access or mobility.

For permanent residence programs, provincial and territorial governments have responsibility for

enforcing labour standards (applicable on equal terms to those born in Canada and landed

immigrants, i.e. immigrants with a right to permanent residence). The CIC would only get involved

when working with its provincial counterparts.

According to the CIC, there are different kinds of 'settlement services' for foreign nationals, but these

tend to be fairly limited for entrepreneurs and self-employed persons. For instance, they already have

to meet the minimum language requirements before they come (at least average level language

proficiency in English and/or French), so access to language training is fairly limited.


The Start-up Visa Program is helping the expansion of entrepreneurialism and create economic

growth across Canada and in a variety of sectors.

628 http://www.immigration.ca/en/canada-immigration-applications-processing-times/177-optis/2198-processing-times-canadian-permanent-residence.html (Accessed on 26 February 2016) 629 Canada wants entrepreneurs – Available at http://www.cic.gc.ca/english/resources/publications/entrepreneurs.asp (Accessed on 26 February 2016).

http://www.immigration.ca/en/canada-immigration-applications-processing-times/177-optis/2198-processing-times-canadian-permanent-residence.html


http://www.cic.gc.ca/english/resources/publications/entrepreneurs.asp


V1: 18th April 2016 216

Since the launch of the program (2013), 16 applicants have been approved for permanent residency,

helping launch eight companies630. In 2015, nearly 60 applications were at various stages of the

process. These entrepreneurs are behind 34 business projects. An additional 25 projects have

secured financial support from dedicated investment groups under the program631.

In 2009, during the recent labour market recession, the gap in self-employment rates between

immigrants and non-immigrants achieved 4.6% points, compared with a gap of 3.8% a year before632.

No further statistics about the two programmes were found.

Success of the scheme

Canada’s business immigration ecosystem have undergone fundamental shifts with the introduction of

Start-up Visa Programme and Self-Employed Persons Programme. Via these two programmes, the

Canadian government re-shaped its policy towards innovation, productivity and stronger businesses

that can compete on a global level633. Immigrant-owned businesses are increasingly recognised by

Canada as important to economic growth. Moreover, the immigrant entrepreneurship process helps to

attract talent, and facilitates immigrant success in Canada.

The success factors of the Canada Start-up Visa Programme:

■ Streamlined process for entrepreneurs with suitable qualifying business;

■ No condition attached to the immigrant visa (unlike Provincial Entrepreneur programmes);

■ Entrepreneurs matched with reputable angel investors, venture capital funds or business

incubators will receive introductions to business advisors, mentors and strategic planning

professionals who will help bring a qualifying business to the international marketplace;

■ Successful investors can realize future returns in accordance with the negotiated % of share

ownership in the business, to the extent returns are realized.

■ Interview waiver;

The Accelerator Centre in Waterloo634 region has been designated business incubator for Canada’s

Start-up Visa Program. Through tailored programing and mentorship and networking opportunities,

start-ups are offered a friendly environment to start their business. So far, around 130 start-ups have

explored the program, and over 1,100 jobs have been created with a total revenue of CA$350

million635. The centre has proceeded 43 companies including Clearpath Robotics, Magnet Forensics,

Miovision, and Kik.

The biggest barrier faced by immigrant entrepreneurs is the approval of angel investor group, venture

capital fund or business incubators who will assist in identifying a suitable qualifying business.

Thereare already some key lessons drawn at the pilot phase of the Start-up Visa Programme:

■ It is generally hard to attract a start-up that has already started to build and has some employees

to move to a different country;

■ The incubator and accelerator programs designated by the Canadian government are not

mandated to recruit foreign teams;

630 http://news.gc.ca/web/article-en.do?nid=981649 (Accessed on 29 February 2016). 631 http://www.theglobeandmail.com/report-on-business/small-business/startups/start-up-visa-program-starting-to-gain-traction/article24692163/ (Accessed on February 2016). 632 Ibid 633 Canada’s Start-Up Visa: Build-Measure-Learn – Available at http://www.hireimmigrants.ca/2015/07/07/canadas-start-up-visa-build-measure-learn/ (Accessed on 29 February 2016). 634 Accelerator Centre. N.p., n.d http://acceleratorcentre.com/about/ (Accessed on 29 February 2016). 635 Ibid

http://news.gc.ca/web/article-en.do?nid=981649

http://www.theglobeandmail.com/report-on-business/small-business/startups/start-up-visa-program-starting-to-gain-traction/article24692163/

http://www.theglobeandmail.com/report-on-business/small-business/startups/start-up-visa-program-starting-to-gain-traction/article24692163/

http://www.hireimmigrants.ca/2015/07/07/canadas-start-up-visa-build-measure-learn/

http://acceleratorcentre.com/about/


V1: 18th April 2016 217

■ The government and private sector partners (venture capital funds, angel investor groups, and

business incubators) need to do a better job marketing Canada as a place to build great tech

companies;

■ Lack of language skills, business culture knowledge and lack of social and professional networks

are big challenges faced by immigrants;

■ There is not adequate awareness about the program globally, and that good start-up companies

can easily raise venture capital from an established firm without having to apply for start-up visa636.

With regard to the immigrant self-employed persons, the disadvantages of being self-employed are: the uncertainty, insecurity, risk and lack of stability637. The lack of benefits and cash flow problems are also flagged.

References

■ Accelerator Centre. N.p., n.d http://acceleratorcentre.com/about/ (Accessed on 29 February 2016).

■ Canada wants entrepreneurs – Available at

http://www.cic.gc.ca/english/resources/publications/entrepreneurs.asp (Accessed on 26 February

2016).

■ Canada Work permit http://www.workpermit.com/canada/business1_self_employed.htm


■ Canada’s Start-Up Visa: Build-Measure-Learn – Available at

http://www.hireimmigrants.ca/2015/07/07/canadas-start-up-visa-build-measure-learn/ (Accessed

on 29 February 2016).

■ Canadian Immigration – Self-Employed Programme

https://www.canadianimmigration.com/immigration-to-canada/investors-entrepreneurs-and-self-

employed/self-employed-persons-program/ (Accessed on 26 February 2016).

■ Canadian Immigration – Start visa programme https://www.canadianimmigration.com/immigration-

to-canada/investors-entrepreneurs-and-self-employed/start-visa-program/#sthash.fDMalxVZ.dpuf

(Accessed on 26 February 2016)l.

■ Canadian Permanent residence Permit http://www.immigration.ca/en/canada-immigration-

applications-processing-times/177-optis/2198-processing-times-canadian-permanent-

residence.html (Accessed on 26 February 2016)

■ Economic Action Plan 2012, page 19 – Available at:

http://www.budget.gc.ca/2012/plan/pdf/Plan2012-eng.pdf (Accessed on 25 February 2016).

■ Economic Action Plan 2013, page 82 – Available at:

http://www.budget.gc.ca/2013/doc/plan/budget2013-eng.pdf (Accessed 25 February 2016).

■ Economic Action Plan 2014 – Available at: http://actionplan.gc.ca/en/blog/economic-action-plan-

2014 (Accessed on 25 February 2016).

■ Five visas in 20 months. Is Canada’s Startup Visa program achieving what it set out to do?

■ Government of Canada website- http://www.canadaimmigrationvisa.com/visatype.html (Accessed

on 25 February 2016)

■ Government of Canada Website- Start-up Available at

http://www.cic.gc.ca/english/immigrate/business/start-up/ (Accessed on 25 February 2016)

636 http://www.immigration.ca/fr/2011/160-canada-immigration-news-articles/2014/december/1128-how-successful-has-canada-s-startup-visa-program-been.html (Accessed on 29 February 2016). 637 Immigrants in self-employment - Available at: http://www.statcan.gc.ca/pub/75-001-x/2011003/article/11500-eng.htm (Accessed on 29 February 2016).

http://acceleratorcentre.com/about/

http://www.cic.gc.ca/english/resources/publications/entrepreneurs.asp

http://www.workpermit.com/canada/business1_self_employed.htm

http://www.hireimmigrants.ca/2015/07/07/canadas-start-up-visa-build-measure-learn/








http://www.budget.gc.ca/2012/plan/pdf/Plan2012-eng.pdf




http://www.canadaimmigrationvisa.com/visatype.html


http://www.immigration.ca/fr/2011/160-canada-immigration-news-articles/2014/december/1128-how-successful-has-canada-s-startup-visa-program-been.html


http://www.statcan.gc.ca/pub/75-001-x/2011003/article/11500-eng.htm



V1: 18th April 2016 218

■ How successful has Canada Start-up Visa Programme been?

http://www.immigration.ca/fr/2011/160-canada-immigration-news-articles/2014/december/1128-

how-successful-has-canada-s-startup-visa-program-been.html (Accessed on 29 February 2016).

■ http://business.financialpost.com/entrepreneur/fp-startups/five-visas-in-20-months-is-canadas-

startup-visa-program-achieving-whatit-set-out-to-do?__lsa=f330-d07b

■ http://news.gc.ca/web/article-en.do?nid=981649 (Accessed on 29 February 2016).

■ http://www.immigration.ca/en/new-brunswick-immigration.html#business (Accessed on 29

February 2016).

■ Ontario Immigration http://www.immigration.ca/en/ontario-immigration.html#investor (Accessed on

29 February 20116).

■ Yukon Immigration Programme http://www.immigration.ca/en/yukon-immigration.html (Accessed


■ Immigrants in self-employment - Available at: http://www.statcan.gc.ca/pub/75-001-

x/2011003/article/11500-eng.htm (Accessed on 29 February 2016).

■ J, Goube (2015), “Worldwide start-up visa policies compared”, Available at: www.migreat.com


■ Pointed –based immigration systems: Canada Available at: http://www.loc.gov/law/help/points-

based-immigration/canada.php#immigration (Accessed on 25 February 2016)

■ Self-Employed programme http://www.immigration.ca/en/self-employed-programs.html (Accessed


■ Temporary Foreign Programme -



■ The Entrepreneur Start-up Visa http://www.canadavisa.com/the-entrepreneur-start-up-visa-

program.html#cgAHbCyxWfqkBayw.99 (Accessed on 29





http://news.gc.ca/web/article-en.do?nid=981649

http://www.immigration.ca/en/new-brunswick-immigration.html#business

http://www.immigration.ca/en/ontario-immigration.html#investor

http://www.immigration.ca/en/yukon-immigration.html



http://www.migreat.com/



http://www.immigration.ca/en/self-employed-programs.html





V1: 18th April 2016 219

Annex 10 Country Fiche: Chile

Key Messages:

Start-Up Chile is a national scheme launched by the Chilean Government in 2010. The aim

of the scheme is to attract early-stage, high-potential entrepreneurs worldwide. The

ultimate objective of this scheme to position Chile as the innovation and entrepreneurship

hub of Latin America.

The scheme selects promising young firms and gives their founders the equivalent of

€35,000 and a year’s visa to come and work on their ideas in Chile. Chile also has one of

the fastest incorporation rates in the world, allowing a new start-up to incorporate almost

in one day.

The scheme is divided in three programs based on the stage of the start-up.

o S Factory: Pre-acceleration program for start-ups in early stage focusing in female

founders. Selected companies benefit a financial support of $10 million CLP

(€13.000) and three months acceleration.

o Seed: Acceleration program for start-ups with an efficient product. Selected

companies receive 20 million CLP (around €26.000) equity free and six months

acceleration.

o Scale: Subsequent fund for start-ups that are already incorporated in Chile and

proved to be performant. Selected companies receive $60 million CLP (around

€78.000) equity free under the condition that they incorporate and operate in Chile.

Since its introduction, around 500 companies and almost 900 entrepreneurs from a total of

37 countries have benefited from it.

Start-Up Chile has attracted a lot of global high-tech companies. In addition, the influx of

start-ups is boosting local interest in entrepreneurship. The introduction of the Start-Up

Chile has also change Chileans’ attitudes and provided them with a global network of

business contacts.


V1: 18th April 2016 220


In 2010, the Chilean government introduced Start-up Chile (SUP)638 as a pilot scheme639. It aims to

select promising young entrepreneurs from around the world to enter and work in Chile. During the

first year, the Entrepreneurship and Innovation Agency of the Government of Chile (hereinafter

CORFO), through its Innova Chile Committee640, selected over 20 projects from 14 countries, projects

which were inserted into the Chilean ecosystem641. CORFO is composed by five committees642 that

include representatives of the private and public sector.

CORFO provided co-financing for participants’ projects, temporary visas and access to various social networks. The first instalment of the co-financing is provided to selected start-ups with € 51,000 equity-

free seed capital. The capital is staged: 50% at the beginning of the programme, and the remaining

50%, 3 months after the start of the business. The second instalment depends on pre-determined

performance conditions643.The scheme was adopted in a context where the United States (hereinafter

US) were making it difficult for foreign entrepreneurs to enter and start-up a business there644. The

strategy of the Chilean Ministry of Economy, Development and Tourism for the economic development

of the country had the objective to position Chile as the centre of innovation and entrepreneurship in

Latin America. The idea was to attract early-stage, high-potential entrepreneurs to start their activity

via Chile as a platform to go afterwards global. This would accelerate the establishment of start-ups

and make a profit for Chilean economy645. The end goal of this scheme was to increase the perception

of Chile as a country of innovation and entrepreneurship across Latin America646.

The scheme provides a yearly financial support of approximately €35,000 for each project, a year’s

visa for start-up founders, office facilities and mentoring and coaching opportunities647. Since the

introduction of the scheme, some 500 companies and almost 900 entrepreneurs from 37 countries

have taken part648.

Start-Up Chile receives annually between 200 – 250 companies649. The programme is composed by

three distinct programmes based on the stage of the start-up.

■ The S Factory Programme650;

■ Seed Programme651;

■ Scale Programme652.

638http://scioteca.caf.com/bitstream/handle/123456789/685/CAF%20N18%20FINAL%20V9.pdf?sequence=5&isAllowed=y (Accessed on 6 April 2016). 639 Start-up Chile http://startupchile.org/ (Accessed on 1st April 2016). 640 http://www.corfo.cl/sobre-corfo/estructura-corporativa/comites-corfo (Accessed on 5 April 2016). 641 Start-Up Chile Phase 1-Technical and Administrative Requirements Corfo 642 The CORFO’s committees are: Business System Committee; National Clean Production Council Committee ; Bio-Bio Technology Innovation; Region Committee Agricultural insurance; Insurance Committee on Agriculture National Center for Innovation and Development of Sustainable Energy (CIEDs) 643 Cohen, Yael H. ( 2014) Accelerating Startups: The Seed Accelerator

Phenomenon, available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2418000 (Accessed on 11 April 2016). 644 David. F (2011), “Start-Up Chile; A critical analysis” available at: http://www.ia-forum.org/Files/Start-Up%20Chile%20A%20Critical%20Analysis2.pdf (Accessed on 11 April 2016). 645 Ibid 646Juanita G-U, Michael, L (2015), “Business Accelerators: Evidence from Start-Up Chile”, available at: http://www.lse.ac.uk/fmg/events/SUP-Gonzalez-Uribe-Leatherbee-13032015.pdf (Accessed on 5 April). 647 The Economist http://www.economist.com/node/21564589 (Accessed on 1st April 2016). 648 Startup Stories Part 6: Building a Startup Ecosystem: Lessons from Chile, available at: http://cherylyeoh.com/2015/03/22/startup-stories-part-6-building-a-startup-ecosystem-lessons-from-chile/ (Accessed on 4 April 2016) 649 Ibid 650 Chile - S Factory http://startupchile.org/about/about-the-s-factory/ 651 http://startupchile.org/about/seed/

http://scioteca.caf.com/bitstream/handle/123456789/685/CAF%20N18%20FINAL%20V9.pdf?sequence=5&isAllowed=y

http://scioteca.caf.com/bitstream/handle/123456789/685/CAF%20N18%20FINAL%20V9.pdf?sequence=5&isAllowed=y

http://startupchile.org/

http://www.corfo.cl/sobre-corfo/estructura-corporativa/comites-corfo

http://www.ia-forum.org/Files/Start-Up%20Chile%20A%20Critical%20Analysis2.pdf


http://www.economist.com/node/21564589

http://cherylyeoh.com/2015/03/22/startup-stories-part-6-building-a-startup-ecosystem-lessons-from-chile/

http://startupchile.org/about/about-the-s-factory/

http://startupchile.org/about/seed/


V1: 18th April 2016 221


The S Factory Programme aims to attract, boost and create new high businesses, through globally

minded female leaders and foster the female entrepreneurial environments653. The programme has

also some specific goals654:

■ Creation and pre-acceleration of female-potential and global new businesses;

■ Develop and strengthen leadership and business development skills; and

■ Strengthen national and international entrepreneurship networks.

Under this scheme, female founders can join a 12-week training to learn all the basics to get their

business started in start-up world. The S Factor offers the companies to receive 10 million Chilean pesos (CLP) (around €13.000) and three months acceleration655. The programme is conceived for

start-ups in early stages, in concept stage or with a prototype that has less than 6 months of

development. The applicants eligible under this programme must be Chilean female national or foreign

person over eighteen years old and be founders or owners of a business projects.

The beneficiaries under this programme are the following categories656:

■ A female person, representation the business project, as the person responsible before CORFO

during the application and execution of the business project. The female person designated as the

beneficiary must participate in the Programme in Chile, during the entire period of project

execution, and be exclusively dedicated to the development of this project

■ Executor – optionally, the female leader can decide to identify another person as executor, in

addition to the female leader This person should form part of the founding team and be specified

during the application process.

The Seed Programme657 aims to attract and retain human capital and entrepreneurships with high

international perspective and global growth. In addition, the programme seeks to promote interaction,

international networking and stimulate the transfer of the skills between entrepreneurs. It also aims to

attract talented Chilean nationals, who are based in foreign countries after their accomplishment of

international graduate degree in foreign universities658.

The applicants should be Chilean national or foreign person over eighteen years of age and who are

the founders or owners of a project to be implemented using Chile. The beneficiaries of the

programme are the same as for S Factory Programme, except the condition of being a women. Selected companies receive a subsidy of 20 million CLP (approx. €26.000) per project and six months

acceleration. The beneficiary must provide 10% of the costs659. This program seeks to attract

entrepreneurs in early stage to start their business in Chile, strengthening enterprise environment and

supporting the culture of innovation in Chile. In return, the entrepreneur can receive a work visa for

one year660. During participation in this programme, and during the execution of the project, the

beneficiary must participate in the activities describe below (See figure 2.1):

652 http://startupchile.org/about/scale/ 653 http://www.thesfactory.org/startup/common-files/TSF_TandC_June2015.pdf (Accessed on 5 April 2016). 654 http://startupchile.org/about/about-the-s-factory/ 655 The pre-acceleration and the acceleration of start-ups means to support Startups to build, execute and validate their business model, access international markets and get funding. 656 Ibid 657 http://startupchile.org/about/ (Accessed on 6 April 2016). 658 http://www.wipo.int/wipo_magazine/en/2014/05/article_0006.html (Accessed on 11 April 2016). 659 http://startupchile.org/about/seed/ (Accessed on 1st April 2016). 660 Ibid


http://www.thesfactory.org/startup/common-files/TSF_TandC_June2015.pdf


http://startupchile.org/about/




V1: 18th April 2016 222

Figure A10.1 Activities to be performed by Seed applicants

Source: Start-Up Chile website

■

The evaluation process by CORFO to qualify for the SEED Programme is done within a period of 10

working days661. The evaluation process includes the following criteria662:

■ Composition, qualification and experience of the beneficiary (15%):

■ Beneficiary networks (15%):

■ Communities they participate

■ Composition, qualification and experience of the executor(s) (10%):

■ Executor(s) networks (10%):

■ Market and competitive position (25%):

Target segment Market size Product testing Competitors Product or service (25%):

Start-Up Chile Scale Programme was designed to boost local start-up growth. Scale programme

offers 60 million CLP (approx. €78.000) to entrepreneurs, who need an additional capital to grow in

Chile and to expand to the rest of Latin America. Companies have to first pass through the Start-Up

Chile Seed program, or other programs of the Entrepreneurship of CORFO during the last two years.

In addition, companies must be legally incorporated in Chile for no more than five years663.

Every company selected must consider in their budget, expenses intended to finance activities for

internationalisation and exporting of goods and/or services; and also the creation of the brand

strategy664. Moreover, each applicant selected is required to develop a social impact activity – i.e.

creating jobs, delivering new products, services. .As a public policy, Start-up Chile seeks to change

and improve the Chilean entrepreneurial culture. In this regard, the entrepreneurs should engage with

the local ecosystem by doing activities that generate social impact665. To achieve this purpose, an

innovative scoring system, called Return Value Agenda (RVA) is put in place666. The RVA assess the

social impact that each entrepreneur generates when they approach the local community (e.g,

661 Ibid 662 Start-up Chile, Technical and administrative requirements CORFO, available at http://img.startupchile.org/wp-content/uploads/2015/05/11172545/Terms-Conditions-English-1.pdf (Accessed on 11 April 2016), 663 Scale Programme http://startupchile.org/about/scale/ (Accessed on 5 April 2016). 664 The start-ups need to design a strategy how to barnd their products and services via networks and media. 665 http://startupchile.org/start-up-chile-celebrates-5-years-with-a-growing-entrepreneurial-ecosystem-and-over-a-thousand-startups-supported/ (Accessed on 5 April 2016). 666 Ibid

http://img.startupchile.org/wp-content/uploads/2015/05/11172545/Terms-Conditions-English-1.pdf

http://img.startupchile.org/wp-content/uploads/2015/05/11172545/Terms-Conditions-English-1.pdf


http://startupchile.org/start-up-chile-celebrates-5-years-with-a-growing-entrepreneurial-ecosystem-and-over-a-thousand-startups-supported/

http://startupchile.org/start-up-chile-celebrates-5-years-with-a-growing-entrepreneurial-ecosystem-and-over-a-thousand-startups-supported/


V1: 18th April 2016 223

organisations, companies, municipalities). This enforced collaboration with local community allows

entrepreneurs to improve their behaviours, learn new strategies and built valuable social networks667.

The RVA is assessed by the CORFO Entrepreneurship Committee668.

Admission criteria

For being eligible under the S Factory, Seed and Scale programme the following criteria are

required669:

■ A two minute video, explaining what pain is solved, introduce the team members and why the

company are is applying to Start-Up Chile (no video with animations).

■ Recommendation letters (provide the email contact of one person;

■ All applicants must be over 18 years old;

■ Early stage start-up (less than 6 months);

■ Applications can only be submitted online thought the Younoodle platform670;

■ A 100% dedication to the project (not employed in any other company);

■ The policy of one application, one start-up;

■ Passport or Chilean ID for foreigners.

The applicants should also choose a Supporting Entity (Entidad de apoyo), which supports the

company to:

■ Get the insurance for the grant;

■ File the expenses for the grant to CORFO and,

■ Guide the applicants towards the accomplishment of the goals of the project.

The supporting entity can be chosen prior the application. Otherwise, the applicant can still choose the

supporting entity before the signature of the grant.

The Seed Programme requires applicants to also have:

■ A qualified team and relevant experience for the start-up, with demonstrable achievements;

■ They must also have strong networks;

■ A clear business strategy; and

■ An innovative product/service.

These criteria are assessed by CORFO on a case-by case basis.


The general requirements for the start-up visa under the Start-up Chile scheme are the following671:

■ A valid passport,

■ A Chilean National ID (cédula) or a Chilean ID for foreigners.

667 Ibid. 668 Start-up scale available at: http://startupchile.org/about/scale/ (Accessed on 5 April 2016). 669 http://startupchile.org/about/ (Accessed on 1st April 2016). 670 YouNoodle platform https://www.younoodle.com/ (Accessed on 5 April 2016). 671 Start-up Chile website





V1: 18th April 2016 224

■ A recommendation letter from an investor, mentor or academic to advocate the experience and

talent of the team or individual.

■ Fill out the online application form;

■ A video pitch on YouTube or Vimeo in two/three minutes or less presenting the project, the team

and the social impact in Chile.

The applications are done through an online application form and in addition to the above

requirements, the entrepreneurs have to satisfy some other specific criteria under each programme672:

S Factory Programme Seed Programme Scale Programme

Projects should be in an early stage

and have started in the past 6 months.

The admission process is done with

the support of YouNoodle, a

California-based company that

provides a technology platform used

by leading entrepreneurship clubs

and university competitions

worldwide.

The entrepreneurs have first to

apply for other programs of the

Entrepreneurship Branch of

CORFO, such as:

– Start-Up Chile Seed

programme (phase 1)

– Capital Semilla

– PRAE

– SSAF

The applications may contain the

following:

– Motivation to develop the

project from Chile.

– Participation in organisations

related to entrepreneurship and

innovation.

– Relationship with national

networks to enhance those

existing in Chile.

– Relationship with international

networks.

– Activities to promote

interaction, networking and

the transfer of knowledge

skills and best practices to

local entrepreneurs and their

environment.

Concerning the applicant:

– Motivation to develop the

project from Chile.

– The number of times that

applicant has founded a start-

up.

– Participation in organisations

related to entrepreneurship

and innovation.

– Relationship with national

networks to enhance those

existing in Chile.

– Relationship with international

networks

– Activities to promote

interaction, networking and

the transfer of knowledge

skills and best practices to

local entrepreneurs and their

environment.

– Every start-up company

will have to set a four

month critical continuity

milestone in the

application form.

– This milestone will be

set by the company

during the application

and revised by the

CORFO

Entrepreneurship

Committee.

Concerning the business project:

– Commercialisation strategy.

– Entry and exit barriers.

– Progress to date and plan

during participants’ stay in

Chile.

– Market challenge or opportunity

addressed by the Project.

– Target market and its size.

– Market position.

Concerning the business project:

– Commercialisation strategy.

– Entry and exit barriers.

– Progress to date and plan

during participants’ stay in

Chile.

– Investors.

– Mentor.

– Competitive advantage.

– Market challenge or

opportunity addressed by the

Project.

The projects have to finish their

past execution period for not

more than 2 years before their

application to Scale

programme.

672 Ibid


V1: 18th April 2016 225

S Factory Programme Seed Programme Scale Programme

– Target market and its size.

– Market position.

– Stage of development of the

Project.

Source: Start-up Chile website

The admission process is done with the support of YouNoodle, a California-based company that

provides a technology platform used by leading entrepreneurship clubs and university competitions

worldwide.

The applications are reviewed by a committee at CORFO (Entrepreneurship and Innovation Agency of

the Government of Chile)673. Once accepted into program, the applicant need to bring all

documentation required by the local consulate. The family members (spouses and/or children) are

also be eligible to get visa, valid for one year.

Once the evaluation is concluded, the project is presented to the First Entrepreneurship

Subcommittee674, which will decide, upon the project’s approval or rejection of the project. CORFO

inform its decision to approve, reject or leave pending the business project, within the 48 hours

following the Subcommittee decision675.

The entrepreneurs selected have to sign a contract with CORFO, where the grant will be delivered in two equal instalments of 30 million CLP (approx. € 39.000)676.


Both start-up entrepreneurs and their family members receive a one-year visa to stay and work in

Chile. Migrant entrepreneurs once they have been accepted through one of the programme of Start-up

Chile, can benefit from the access to a large start-up community and to accelerate their business

project. In addition, migrant entrepreneurs build their businesses with Chilean taxpayers’ pesos

without having to give up any equity.


In 2015, after the application process for the 13th generation of Start-up companies, 90 worldwide

start-ups were chosen to take part of the flagship entrepreneurial program of the Start-up Chile677. In

this new generation, the most represented countries are Chile (30%), USA (20%), Argentina (6%),

Brazil (6%) and India (6%). The full overview is provided in Table 2.1 below:

673 CORFO website http://www.corfo.cl/inicio (Accessed on 1st April 2016). 674 This is part of CORFO and serves as an evaluation entity of the first entrepreneurial applications. It is composed by professionals (tech experts, investors and entrepreneurs. The Subcommittee may approve the projects with the modifications that it deems pertinent, as long as the nature and general objective of these is not altered, and with the power to require technical modifications. 675 Ibid 676 Ibid 677 http://startupchile.org/start-up-chile-announced-the-90-companies-that-will-be-part-of-the-13th-generation/

http://www.corfo.cl/inicio

http://startupchile.org/start-up-chile-announced-the-90-companies-that-will-be-part-of-the-13th-generation/


V1: 18th April 2016 226

Figure A10.2 Start-up applicants by country

The activities of the start-up companies’ involved Start-Up Chile scheme include the: IT & Enterprise

Software (21%), Education (11%), Mobile & Wireless (10%), E-commerce (9%) and Healthcare &

Biotechnology (7%). The Table 2.2 below illustrates the full overview:

Figure A10.3 Type of start-up companies

As regards the gender of entrepreneurs, 84% are men and 16% are women.

For the period 2010-2012, it has successfully put Chile on the map with 15,000 applications coming in

from over 65 countries678. According to the Compass Global Start-up Ecosystem report (2012), the

Chile Start-up programme emerged at 20 position. In 2015, the same report revealed that Chile Start-

678 http://cherylyeoh.com/2015/03/22/startup-stories-part-6-building-a-startup-ecosystem-lessons-from-chile/



V1: 18th April 2016 227

up programme fell out of the top 20 as it has experienced fast growth for several years but is currently

a bit above average with a growth index of 2.6679.

In 2015, 2,448 start-up applications were competing for the 100 available spots.


The introduction of Start-Up Chile showed a positive impact in entrepreneurial ecosystem since its

introduction. Between 2010 and September 2012, Start-Up Chile participants held almost 380

meetings and took part in more than 1,000 workshops and conferences to share experiences and best

practices680. The incorporation rates under this scheme are also recognised as one of the fastest in

the world, allowing a new start-up to incorporate in as little as one day. Start-Up Chile has attracted more than 1000 start-ups from its accelerator program that offers entrepreneurs 40.000 CLP (€51.000)

to temporarily relocate to Santiago. These companies have raised hundreds of millions funding681.

In addition, the Start-Up Chile has helped to drive a big increase in the number of Chilean firms

applying to other seed-capital funds run by the government, as well as a rise in the number of

universities that teach students about enterprise (The Catholic University of Chile, for instance has

open an innovation centre to enable academics and entrepreneurs to work side by side). Start-Up

Chile created incentives for Chilean newspapers to devote a specific space to entrepreneurs. This

increased also interest elsewhere in Latin America: Brazil is planning to launch a similar programme to

attract foreign talent.

The Washington post article acknowledges that “the Start-Up Chile pilot programme purpose was to

learn whether a technology hub would follow from importing entrepreneurs and providing them with

the right networking support and mentorship”682.

Five years later the adoption of the scheme, the results are mixed. Start-Up Chile has become the

radar of start-ups coming from all over the world, giving to Santiago, its capital, the nickname

“Chilecon Valley.”683

Despite Start-Up Chile’s success, the scheme has faced a shortage of local venture capitalists and has struggled to retain the program’s participants in Santiago684. Around 80% of Start-Up Chile participants leave Santiago after the six month program and move on to the US685. In addition, approximately 85% of the funding Start-Up Chile came from abroad, mainly from the US686. Around, 300 new companies are accepted annually, but the large number are facing the challenge that Chile has in fostering entrepreneurship and innovation687. Moreover, some experts have questioned the long-term sustainability of the scheme. Compared to other entrepreneurship initiatives in Chile, Start-Up Chile may appear to fall short in terms of its benefits to the Chilean economy688. For instance, only 37% of Start-Up Chile participants between 2010 and 2012 began activities in Chile, compared to

679 Global Startup Ecosystem Ranking 2015 available at: http://blog.compass.co/the-2015-global-startup-ecosystem-ranking-is-live/ (Accessed on 4 April 2016). 680 Start-Up Chile: Importing Entrepreneurs To Become The Silicon Valley Of Latin America, Forbes Magazine (Accessed on 4 April 2016) 681 Start-Up Chile: A “start-up for start-ups” in Chilecon Valley, available at: http://www.brookings.edu/blogs/techtank/posts/2015/08/19-startup-chile-chilecon-valley (Accessed on 5 April 2016). 682 Washington post article, available at: https://www.washingtonpost.com/news/innovations/wp/2014/06/11/chile-teaches-the-world-a-lesson-about-innovation/ (Accessed on 4 April 2016). 683 Importing Entrepreneurs To Become The Silicon Valley Of Latin America, Forbes Magazine 684 Start-Up Chile Launches Follow-On Fund To Boost Local Growth, available at: http://techcrunch.com/2015/01/19/start-up-chile-launches-follow-on-fund-to-boost-local-growth/ (Accessed on 1 April 2016). 685 Start-Up Chile: A “start-up for start-ups” in Chilecon Valley, available at: http://www.brookings.edu/blogs/techtank/posts/2015/08/19-startup-chile-chilecon-valley (Accessed on 4 April 2016) 686 Ibid 687 Chile Keeps Nurturing Seeds for ‘Chilecon Valley’, available at: http://www.wsj.com/articles/chile-keeps-nurturing-seeds-for-chilecon-valley-1440371282 (Accessed on 1 April 2016). 688 http://www.wipo.int/wipo_magazine/en/2014/05/article_0006.html (Accessed on 6 April 2016).

http://blog.compass.co/the-2015-global-startup-ecosystem-ranking-is-live/



https://www.washingtonpost.com/news/innovations/wp/2014/06/11/chile-teaches-the-world-a-lesson-about-innovation/








V1: 18th April 2016 228

CORFO’s Seed Capital Program (which provides up to $120,000 (around €154.000) in seed capital to

selected ventures). Chile has business-friendly regulations, efficient immigration policies, and a relatively stable economy, but it lacks the entrepreneurial spirit amongst its young people and Santiago is not a very international city689.

A few recommendations were identified as to improvement of the scheme for the future690:

■ Increase coordination between start-up policies and innovation;

■ Promote entrepreneurial culture;

■ Ensure availability of financing in all phase of start-ups development;

■ Define mechanisms to create synergies with new open innovation strategies and new trends in

private sector development;

■ Improve management of incubators and introducing performance based assessments;

■ Design integrated instruments matching financing and services for entrepreneurs;

■ Simplify legal framework for start-up creation;

■ Investing in new and better metrics to capture start-ups dynamics

■ Implement monitoring and evaluations and setting up feedback mechanisms.

In 2014, a plan to restructure the Start-up Chile was introduced with the aim to increase the

investment and encourage more rapid rates of company formation and job creation in Chile691.

Particular attention was drawn to improve access to business finance and to strengthening intellectual property (IP) awareness. To do this, in addition to seed capital of 40,000 CLP (around €51.000),

projects demonstrating high growth potential can also apply for a non-refundable grant of 120,000 CLP (around €154.000). Thereafter, innovation and technology projects which raise funds in Chile will

be eligible for up to 50% of their equity funding under a specialised Early Investment Fund.

References

■ Chile - S Factory http://startupchile.org/about/about-the-s-factory/

■ Chile Keeps Nurturing Seeds for ‘Chilecon Valley’, available at: http://www.wsj.com/articles/chile-

keeps-nurturing-seeds-for-chilecon-valley-1440371282

■ Cohen, Yael H. ( 2014) Accelerating Start-ups: The Seed Accelerator Phenomenon, available at:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2418000

■ CORFO website http://www.corfo.cl/inicio

■ David. F (2011), “Start-Up Chile; A critical analysis” available at: http://www.ia-

forum.org/Files/Start-Up%20Chile%20A%20Critical%20Analysis2.pdf

■ Global Startup Ecosystem Ranking 2015 available at: http://blog.compass.co/the-2015-global-

startup-ecosystem-ranking-is-live/

■ Importing Entrepreneurs To Become The Silicon Valley Of Latin America, Forbes Magazine

■ OECD (2016), “Start-up Latin America 2016: Building and Innovative Future”, available at:

http://www.oecd.org/dev/americas/ProgressReport.pdf

689 Start-Up Chile: A “start-up for start-ups” in Chilecon Valley http://www.brookings.edu/blogs/techtank/posts/2015/08/19-startup-chile-chilecon-valley (Accessed on 1st April 2016). 690 OECD (2016), “Start-up Latin America 2016: Building and Innovative Future”, available at: http://www.oecd.org/dev/americas/ProgressReport.pdf (Accessed on 5 April 2016). 691 Start-Up Chile available at: http://www.wipo.int/wipo_magazine/en/2014/05/article_0006.html (Accessed on 5 April 2016).




http://www.corfo.cl/inicio










V1: 18th April 2016 229

■ S Factory http://startupchile.org/about/about-the-s-factory/

■ Scale Programme http://startupchile.org/about/scale /

■ Seed Programme http://startupchile.org/about/seed/

■ Start-Up Chile Launches Follow-On Fund To Boost Local Growth, available at:


■ Start-Up Chile Phase 1-Technical and Administrative Requirements Corfo

■ Start-Up Chile website http://startupchile.org/about/

■ Start-Up Chile: A “start-up for start-ups” in Chilecon Valley


■ Start-Up Chile:90 companies will be part of 19th generation http://startupchile.org/start-up-chile-

announced-the-90-companies-that-will-be-part-of-the-13th-generation/

■ Start-up Ecosystem: Lessons from Chile http://cherylyeoh.com/2015/03/22/startup-stories-part-6-

building-a-startup-ecosystem-lessons-from-chile/

■ Startup Stories Part 6: Building a Startup Ecosystem: Lessons from Chile, available at:

http://cherylyeoh.com/2015/03/22/startup-stories-part-6-building-a-startup-ecosystem-lessons-

from-chile/

■ The Economist http://www.economist.com/node/21564589

■ Washington post article, available at:

https://www.washingtonpost.com/news/innovations/wp/2014/06/11/chile-teaches-the-world-a-

lesson-about-innovation/

■ WIPO - Start-Up Chile available at:


■ YouNoodle platform https://www.younoodle.com/


http://startupchile.org/about/scale











http://www.economist.com/node/21564589






V1: 18th April 2016 230

Annex 11 Country Fiche: New Zealand


V1: 18th April 2016 231


New Zealand is one of the OECD countries with the highest percentage of foreign-born population692,

reaching 28.2% in 2013, after Switzerland (28.3%) and Luxembourg (43.7%). In 2014, New Zealand

had the fourth highest percentage of foreign born in employment (almost up to 30%)693 and had the

second-highest percentage of highly educated in the foreign born population (in 2012 around 45%)694,

which was well above the share of highly educated among natives (around 30% in 2012).

The country has a long history of migration and migration policy. Since the 70s, it has been a

traditional destination country for migrants from Europe (the United Kingdom in the first place within

the Commonwealth agreements), Australia and some neighbouring Pacific islands. In 1973, New

Zealand and Australia signed an informal arrangement (i.e. not a binding treaty, but a set of

immigration procedures), called the Trans-Tasman Travel Arrangement, whereby Australians and New

Zealanders could move from the one country to the other for unlimited time.

A modern and economy-oriented migration policy that did not focus only on certain countries of origin started to be designed back in 1986695, with the objectives of contributing to New Zealand’s human resource pool, developing the entrepreneurship potential by attracting migrant entrepreneurs and investors, and filling the short-term skills shortages696. A points-based system to select migrants with skills and characteristics that match the needs in New Zealand was introduced in 1991697. In 2004 the government reformed the skilled migration system and introduced the Skilled Migrant Category698 in the ‘Skilled Migration Stream’ to attract highly-skilled migrants in industries and regions with expected high growth and skills shortages. Skilled occupations are divided in A, B and C categories and include a variety of occupations (over 50) such as accountants, pilots, architects or doctors699. This scheme has two stages: i) the expression of interest (EOI) and ii) the invitation to apply (ITA) for residency stage. These stages are valid for entrepreneur work visa, as seen in the descriptions below. The further permanent and temporary visas part of the Skill Stream are:

■ The Work to Residence700 Visa for qualified workers with a job offer by an accredited employer in

a shortage occupation.

■ The Temporary Work Visa701 targeting different categories, like potential migrants with a job offer,

young and skilled persons looking for skilled employment, students and trainees, and highly

specialised workers.

■ The Investor Visa(s)702 and the long-term visitor visa (Temporary Retirement Visa) for those who

wish to invest in New Zealand.

692 OECD Statistics on foreign-born population, https://data.oecd.org/migration/foreign-born-population.htm, extracted on 4th April 2016. 693 OECD (2015), International Migration Outlook. 694 OECD (2014), International Migration Outlook. 695 Bedford, R. (2003), New Zealand: The Politicization of Immigration, MPI, http://www.migrationpolicy.org/article/new-zealand-politicization-immigration, viewed on 4th April 2016. 696 Australian Government (2011), Competing for Skills: Migration Policies and Trends in New Zealand and Australia, https://www.border.gov.au/ReportsandPublications/Documents/research/migration-policies-trends-fullreport.pdf, viewed on 4th April 2016. 697 Bedford, R. (2003), New Zealand: The Politicization of Immigration, MPI, http://www.migrationpolicy.org/article/new-zealand-politicization-immigration, viewed on 4th April 2016. 698 New Zealand Government website, Skilled Migrant Category, http://www.immigration.govt.nz/migrant/stream/work/skilledmigrant/default.htm, viewed on 4th April 2016. 699 For a full list of the current skilled occupations, please see here: Immigration New Zealand (2016), Appendix 6 - List of Skilled Occupations, http://www.immigration.govt.nz/opsmanual/35165.htm, viewed on 12th April 2016. 700 New Zealand Government website, Working Toward Residence, http://www.immigration.govt.nz/migrant/stream/work/worktoresidence/default.htm, viewed on 4th April 2016. 701 New Zealand Government website, Temporary Work visa, http://www.immigration.govt.nz/migrant/stream/work/worktemporarily/requirements/, viewed on 4th April 2016. 702 New Zealand Government website, Investor Visa, http://www.immigration.govt.nz/migrant/stream/invest/investment/default.htm, viewed on 4th April 2016.

https://data.oecd.org/migration/foreign-born-population.htm

http://www.migrationpolicy.org/article/new-zealand-politicization-immigration

https://www.border.gov.au/ReportsandPublications/Documents/research/migration-policies-trends-fullreport.pdf

https://www.border.gov.au/ReportsandPublications/Documents/research/migration-policies-trends-fullreport.pdf


http://www.immigration.govt.nz/migrant/stream/work/skilledmigrant/default.htm

http://www.immigration.govt.nz/opsmanual/35165.htm

http://www.immigration.govt.nz/migrant/stream/work/worktoresidence/default.htm

http://www.immigration.govt.nz/migrant/stream/work/worktemporarily/requirements/

http://www.immigration.govt.nz/migrant/stream/invest/investment/default.htm


V1: 18th April 2016 232

As for the specific schemes to attract foreign entrepreneurs, the Long Term Business and Investor Visa was first introduced in 1999. In 2014 the visa had undergone a major reform, thereby the ‘old’ entrepreneur route under the Long Term Business and Investor Visa was replaced by Entrepreneur Work Visa. The Entrepreneur Work Visa is also part of the New Zealand Migration Skill Stream.

As stated in the Proposal of the Business Migration Review put forward by the Minister of Immigration703, business migration was seen as a key factor to foster the country’s economic development and support the Business Growth Agenda704. However, the growth potential of businesses needed to be emphasised. In this respect, three weaknesses of the previous scheme were highlighted.

■ It was reported that almost 40% of foreign businesses were in low productivity sectors with limited

export growth potential, like retail and hospital. Furthermore, only 34% of income of business visa

holders derived from their business, revealing their low profitability. Also, the new employment

positions created remained low.

■ Most foreign businesses gathered around big cities, and in particular the area of Auckland, rather

than being scattered throughout the country.

■ It was also recorded that the applications’ success rate declined considering the period 2009-

2013, and evidence suggested that the process was not clear enough for the applicants to figure

out their chances of success.

The identification of such weaknesses led to rethinking of the target of the scheme and re-setting the

height of the bar. The proposed changes aimed at targeting “high growth and innovative business with

export potential”, at incentivising the establishment of businesses in regional areas, at facilitating the

business creation in innovative sectors, namely Information and Communication Technology (ICT) and

science, and, finally, at making the overall process more transparent.

The Immigration Act 2009, Section 25705, laid down that “the chief executive must publish immigration

instructions”. Accordingly, Immigration New Zealand, which is a service of the New Zealand Ministry of

Business, Innovation and Employment, published the Operational Manual706 containing Government’s

instructions on granting visas and provides extensive information on the visas available on the

Immigration New Zealand portal707. The Entrepreneur Work Visa Category and its functioning are

described in section BB of the Operational Manual.


The Entrepreneur Work Visa is a temporary visa valid in total 3 years that allows a foreign citizen to buy or establish a business in New Zealand. It includes two stages:

■ Start-up stage, with a duration of 12 months to buy or establish a business in New Zealand, and

■ Balance stage, with a duration of 24 months once the entrepreneur can prove that s/he has taken

steps to establish a business. The evidence to show that steps have been taken in order to set up

703 Minister of Immigration (2014), Proposal for Business Migration Review http://www.immigration.govt.nz/NR/rdonlyres/7B2C078F-CD8A-402B-833C-9B76BF50AF46/0/cabpaperbusinessmigrationreview.pdf. 704 Ministry of Business, Innovation and Employment website, Business Growth Agenda, http://www.mbie.govt.nz/info-services/business/business-growth-agenda, viewed on 4th April 2016. 705 Parliamentary Counsel Office, Immigration Act 2009, http://www.legislation.govt.nz/act/public/2009/0051/latest/DLM1440618.html, viewed on 25th April 2016. 706 Immigration New Zealand, Operational Manual, http://www.immigration.govt.nz/opsmanual/index.htm, viewed on 25th April 2016. 707 Immigration New Zealand, Portal, http://www.immigration.govt.nz/m viewed on 25th April 2016.

https://en.wikipedia.org/wiki/Ministry_of_Business,_Innovation_and_Employment

https://en.wikipedia.org/wiki/Ministry_of_Business,_Innovation_and_Employment


http://www.immigration.govt.nz/NR/rdonlyres/7B2C078F-CD8A-402B-833C-9B76BF50AF46/0/cabpaperbusinessmigrationreview.pdf


http://www.mbie.govt.nz/info-services/business/business-growth-agenda

http://www.legislation.govt.nz/act/public/2009/0051/latest/DLM1440618.html

http://www.immigration.govt.nz/opsmanual/index.htm

http://www.immigration.govt.nz/m


V1: 18th April 2016 233

the business could be, for instance, documents showing the setting up, the purchase of properties,

invoices for business equipment and supplies, employment agreements, bank statements708.

The division into stages was already implemented in the ‘old’ Long Term Business and Investor visa

and has been transferred to the Entrepreneur Work Visa.

Admission criteria

A points-based system709 was introduced to ensure transparency and flexibility: a combination of requirements would need to be met in order to be eligible to apply.

The points are given for self-employment experience, and more points are awarded if the previous experience is relevant710 to the activities the applicants is going to perform, and for relevant senior management experience. However, having past experience is not in itself a sufficient condition to pass the points test (the maximum an applicant can obtain for business experience is 40 out of 120 required); and additional points are necessary. The points for the benefit brought about to the New Zealand economy are allocated i) according to the full time positions for New Zealand citizens or residents created (up to 40 points), ii) according to the export businesses based on the annual turnover (up to 80 points, if more than 10 full-time positions are created) and iii) to the uniqueness of the products or services for New Zealand or a particular region (up to 30). Moreover, up to 80 points can be allocated according to the amount of investment (0 if under of NZ$ 200,000 (approx. €120,000) and 80 if above NZ$ 1,000,000 (approx. €600,000); additional points are available for the age of the applicant (up to 20 if the applicant is between 25 and 49) and the location of the business: if based outside Auckland, where the foreign-born population is mostly concentrated711, the applicant can receive up to 40 points. The points system is meant to be flexible so that it is not necessary to meet all the requirements, but a combination of them could be enough (for instance, the combination high export business, age, location or the combination capital investment and business experience) to reach the threshold. In Table A11.1 the points available for each item (business experience, benefit to New Zealand, uniqueness, capital investment, age and region) and sub item are listed, as well as the maximum contribution each of them could bring to building up the 120 points required.

Table A11.1 Points-based system in New Zealand

Categories and sub categories for which points are available Maximum points that can be awarded (% of the 120 points threshold)

Business experience (points can be awarded only in one category) 40 (33.3%)712

Relevant Self-employment 40 (33%)

708 New Zealand Government website, Work Entrepreneur Visa, http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/entrepreneurworkvisa/, viewed on 4th April 2016; Immigration New Zealand, Operational Manual, Section BB4.5, Requirements at the end of the Entrepreneur Start-Up stage, http://www.immigration.govt.nz/opsmanual/index.htm, ,viewed on 25th April 2016. 709 Immigration New Zealand, Operational Manual, Section BB3.10 Points scale for an Entrepreneur Work Visa, http://www.immigration.govt.nz/opsmanual/index.htm, ,viewed on 25th April 2016. 710 There is no specific definition of what counts as relevant previous business experience and each applicant has to make the case for his/her previous experience to be relevant. However, the government website reports the following example: “if a person had operated a men’s fashion retail store in their home country, we would expect that the business to be operated in New Zealand would be within the retail fashion industry. However, we will consider experience gained within the same sector; for example: retail, restaurant, agricultural etc.”, from New Zealand Government website, Questions and answers – Entrepreneur Work Visa Category http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/entrepreneurworkvisa/questionsandanswersentrepreneurworkvisacategory.htm, viewed on 4th April 2016. 711 Bedford, R. (2003), New Zealand: The Politicization of Immigration, MPI, http://www.migrationpolicy.org/article/new-zealand-politicization-immigration, viewed on 4th April 2016. 712 In this column, it is reported the highest percentage the points gained for the item (or sub-item) can contribute to building up the 120 points required to qualify.

http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/entrepreneurworkvisa/



http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/entrepreneurworkvisa/questionsandanswersentrepreneurworkvisacategory.htm




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Categories and sub categories for which points are available Maximum points that can be awarded (% of the 120 points threshold)




Other Self-employment 20 (16.6%)



More than 3 years 5

Relevant senior management experience 10 (8.3%)


More than 5 years 5

Benefit to New Zealand (points can be awarded in up to two categories) 160 (133.3%)

New full-time employment creation 80 (66.6%)




2 full time positions 20

1 full time position 10

Approved export business (based on annual turnover) 80 (66.6%)

More than NZ$ 1,000,000 (approx. €600,000) turnover/year 80






Unique or new products or services to NZ or to a particular region 30 (25%)

Capital investment 80 (66.6%)

More than NZ$ 1,000,000 (approx. €600,000) 80


More than NZ$ 500,000 (approx. €300,000 50




Age 20 (16.6%)

< 24 15

25-49 20

50-59 10

>60 0

Business Based outside Auckland 40 (33%)

Threshold to be able to apply 120 (100%)

Total available points 370 (308%)


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Moreover, the minimum investment of NZ$ 100,000 (approx. €60,000) was introduced, to ensure the applicant could create business with an export potential; however, not to penalise high-value innovative business with low financial capital but high intellectual capital, this requirement could be waived, upon request of the applicant, if the business to be established is in “science, ICT [Information Communication Technology], or other high value export-oriented sector, which demonstrate a high level of innovation or credible short-term high growth prospects” 713. As more general requirements, the applicant needs to show a clean recent history of bankruptcy, business failure and fraud, an intermediate level of English language714 and to meet health715 and character requirements716. If the partner or children accompany the applicant, they should meet the health and character requirements as well.

In sum the applicants are requested to meet the following requirements:

■ investing a minimum amount of capital of NZ$ 100,000 (approx. €60,000) owned by the applicant

or the applicant’s partner717. This minimum investment requirement can be waived for innovative

businesses;

■ having a clear business plan;

■ scoring at least 120 points at the Entrepreneur Work visa points scale (Table 2.1), which assesses

the value of the business for New Zealand, the applicant’s previous experience and the growth

potential718;

■ clean recent history of bankruptcy, business failure and fraud;

■ intermediate level of English language;

■ health and character requirements.

Application procedure

When lodging the application, the applicant must show evidence of capital, must compile the points-based self-assessment and submit the business plan. The application must be sent by post to the Business Migration Branch in Wellington (BMB). This is a standalone branch of the government that specifically deals with applications under the business migration (investors, entrepreneurs and employees of a relocating business). The application for the Entrepreneur Work visa719 is processed in approximately 3 months720 and the fees amount to NZ$ 3,340 (approx. €2,206) if the application is

713 New Zealand Government website, Work Entrepreneur Visa requirements, http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/entrepreneurworkvisa/requirements.htm, viewed on 4th April 2016. 714 The required level is equivalent to IELTS 4, which corresponds to B1 in the Common European Framework (http://takeielts.britishcouncil.org/find-out-about-results/understand-your-ielts-scores/common-european-framework-equivalencies). 715 New Zealand Government website, Health requirement, http://glossary.immigration.govt.nz/healthrequirementsresidence.htm, viewed on 4th April 2016. 716 New Zealand Government website, Character requirement, http://glossary.immigration.govt.nz/goodcharacterresidence.htm, viewed on 4th April 2016. 717 The capital to invest cannot be borrowed, but can be gifted to the applicant, http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/entrepreneurworkvisa/requirements.htm, viewed on 4th April 2016. 718 New Zealand Government website, Points scale, http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/entrepreneurworkvisa/pointsscaleforEWV.htm, viewed on 4th April 2016. 719 The application form is available at the following link: http://www.immigration.govt.nz/NR/rdonlyres/DA28B8F7-8762-4808-A8E7-4323B9618C6A/0/INZ1221.pdf 720 New Zealand Government website, Entrepreneur Work Visa, http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/entrepreneurworkvisa/apply.htm, viewed on 4th April 2016.

http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/entrepreneurworkvisa/requirements.htm

http://takeielts.britishcouncil.org/find-out-about-results/understand-your-ielts-scores/common-european-framework-equivalencies

http://takeielts.britishcouncil.org/find-out-about-results/understand-your-ielts-scores/common-european-framework-equivalencies

http://glossary.immigration.govt.nz/healthrequirementsresidence.htm

http://glossary.immigration.govt.nz/goodcharacterresidence.htm

http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/entrepreneurworkvisa/requirements.htm

http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/entrepreneurworkvisa/pointsscaleforEWV.htm

http://www.immigration.govt.nz/NR/rdonlyres/DA28B8F7-8762-4808-A8E7-4323B9618C6A/0/INZ1221.pdf

http://www.immigration.govt.nz/NR/rdonlyres/DA28B8F7-8762-4808-A8E7-4323B9618C6A/0/INZ1221.pdf

http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/entrepreneurworkvisa/apply.htm


V1: 18th April 2016 236

lodged in New Zealand, to NZ$ 2,282 (approx. €1,370) if lodged in pacific countries721 and NZ$ 3,340 (approx. €2,206) in the rest of the world.

Access to long term residence

The Entrepreneur Work Visa is a temporary visa, but before it expires (3 years), the entrepreneur can apply for a long term visa (called Entrepreneur Residence Visa). There are two streams to access to the Entrepreneur Residence Visa722:

■ the first addresses migrants who have already spent at least 2 years in New Zealand on a visa that

allowed self-employment activities (not necessarily an entrepreneur visa) and have been self-

employed in the previous 2 years;

■ the second is a fast-track route and addresses migrants who have held for at least the previous 6

months an Entrepreneur Work Visa (or its predecessor, the Long Term Business Visa) and have

invested at least NZ$ 500,000 (approx. €300,000) in the business and created at least three full-

time equivalent jobs for New Zealand citizens or residents723.

The access to the Entrepreneur Residence Visa is not automatic: the applicants must demonstrate

that they have complied with the employment and immigration law, that they (and their dependents)

meet the English requirements, that they have not accessed welfare assistance and that the business

has benefited the New Zealand economy724.

Business environment

Unlike other countries, such as France and Chile, New Zealand does not provide a specific support

scheme or incentives to foreign entrepreneurs, for instance in terms of capital. On the contrary, there

is a minimum investment threshold of NZ$ 100,000 deriving from the applicant’s and/or partner’s

resources that can be waived only in case of innovative businesses. Moreover, points for the capital

investment starts to be available only for investment of at least NZ$ 200,000.

However, despite specific support schemes are missing, the ecosystem in New Zealand results to be

particularly favourable to new businesses. According to the World Bank Doing Business Report 2016,

New Zealand ranks second, after Singapore, against the general indicator of ease of doing business;

and it comes first against the sub-indicators of starting a new business, registering properties, getting

credit and protecting minority investors. New Zealand is also within the top 20 most competitive

economies, according to the Global competitiveness Index725, placing itself at the 16th position out of

140.

721 Pacific countries are the following: Australia, American Samoa, Fiji, Kiribati, Marshall Islands, Federated States of Micronesia, Nauru, Palau, Papua New Guinea, Pitcairn Islands, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu, and citizens of Cook Islands and Niue, form New Zealand Government website, Application Fees, http://www.immigration.govt.nz/NR/rdonlyres/00B58004-04AB-46C6-B32B-5CE91FBA979A/0/FeesGuide.pdf, viewed on 4th April 2016. 722 New Zealand Government website, Residence for Entrepreneur, http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/, viewed on 4th April 2016. 723 Immigration New Zealand, Operational Manual, http://www.immigration.govt.nz/opsmanual/index.htm, viewed on 25th April 2016. 724 The Section BH4.10, Criteria for a business benefiting New Zealand, of the Operational Manual, lists the following conditions as examples: “introducing new, or enhancing existing, technology, management or technical skills; or introducing new, or enhancing existing, products or services; or creating new, or significantly expanding existing, export markets; or creating sustained and ongoing full time employment for one or more New Zealand citizens or residents; or the revitalisation of an existing New Zealand business that has led to significantly increased financial performance; or introducing productivity-enhancing spillover benefits or increased capacity utilisation (such as significant net new job creation)”, http://www.immigration.govt.nz/opsmanual/index.htm, viewed on 25th April 2016. 725 World Economic Forum 2016, Global Competitiveness Index 2015-2016, http://www3.weforum.org/docs/gcr/2015-2016/Global_Competitiveness_Report_2015-2016.pdf.

http://www.immigration.govt.nz/NR/rdonlyres/00B58004-04AB-46C6-B32B-5CE91FBA979A/0/FeesGuide.pdf

http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/



http://www3.weforum.org/docs/gcr/2015-2016/Global_Competitiveness_Report_2015-2016.pdf


V1: 18th April 2016 237

In the web pages of New Zealand Now, hosted by the government New Zealand Immigration website,

New Zealand is sponsored as a place to migrate. In particular, when it comes to investment in the

country, the adopted market strategy stresses the advantages of doing business in New Zealand, for,

among other factors, the safe, stable and secure business environment, for the efficient and market-

oriented economy, for the flexibility of the migration system and the innovative and entrepreneurial

culture726.

Finally, New Zealand hosts a dynamic business ecosystem and it is easy to find information, not

necessarily targeted on migrants, on how to find funding, incubators and accelerators and what kind of

support can be received from the government727.


As described in Section 1, in 2014, the government introduced the new visa, the Entrepreneur Work Visa, to replace the former Long Term Business Visa that also included two stages as seen in the description above.

As seen in figure 2.1, the number of applications728 for the temporary business visas increased in the period 2010-2014 from 324 in 2010/11729 up to 554 in 2014/15. It is worth to note that the introduction of a scheme with more restrictive requirements (for instance, the points scale and the minimum investment requirement) in 2014 did not mark a drop in the number of the applications. The success rate has always been above 85%, the only exception being the year 2012/13, where it dropped at 73%.

Figure A11.1 Applications for the Entrepreneur Work Visa and Long Term Business, balance of 3 years, 2010-2016

Source: ICF calculation on New Zealand Government Statistics730

The number of applications731 to the long-term residence visa (Entrepreneur Residence Category) that received a positive decision has been between 100 and 250 in the period 2010-2016 and

726 New Zealand, Trade and Enterprise, Invest, https://www.nzte.govt.nz/en/invest/new-zealands-investment-advantage/ viewed on 26th April 2016. 727 Creative HQ, NZ Startup Ecosystem, http://creativehq.co.nz/ecosystem/#, viewed on 26th April 2016. 728 New Zealand Government website, Statistics, http://www.immigration.govt.nz/NR/rdonlyres/41E67310-701A-4687-88D9-F357F5DBC07E/0/W1WorkAppsDecidedbyFY.zip, viewed on 4th April 2016. 729 Statistics are collected per financial year. 730 New Zealand Government website, Statistics, http://www.immigration.govt.nz/NR/rdonlyres/41E67310-701A-4687-88D9-F357F5DBC07E/0/W1WorkAppsDecidedbyFY.zip, viewed on 4th April 2016.



http://creativehq.co.nz/ecosystem/

http://www.immigration.govt.nz/NR/rdonlyres/41E67310-701A-4687-88D9-F357F5DBC07E/0/W1WorkAppsDecidedbyFY.zip





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registered a steady increase over time. The success rate was always high and ranged between 70% and 85%. As in New Zealand family members are registered on the same visa application, the number of people who could migrate on the business visa was higher than the number of visa applications, and ranged between 300 and 750 in the 2010-2016, registering a steady increase.

Figure A11.2 Positive decisions on Entrepreneur Residence visa (by absolute number and success rate) and total number of people on the visa

Source: ICF calculation on New Zealand Government Statistics732

With regard to the nationality of applicants, most applications were lodged by Chinese citizens: in

2015/16, 523 out of 750 applications for the consolidation stage (balance of 3 years) were made by

Chinese. As for the other top nationalities, South Korean, British and Japanese nationals lodged

between 20 and 40 applications for the consolidation stage. Chinese represent also the first nationality

to receive positive decisions733.


As described in Section 1, the Entrepreneur Work Visa was introduced in 2014, replacing the old long

term business and investor visa. The government did not set a specific target for the number of

successful applicants, and noted that there might be a trade-off between the quality and the quantity of

the applications734. It is still too early to evaluate the new visa, but some peculiar features of the

scheme can be pointed out.

■ The Entrepreneur work Visa offers a long perspective to migrants to set up their business, as it is

valid 3 years; however, there is a built-in conditionality, as only if migrants can show that they have

taken steps to establish their business after 12 months, they see their visa validated for the

remaining 24 months.

731New Zealand Government website, Statistics, http://www.immigration.govt.nz/NR/rdonlyres/C8FC1AEE-7147-44C8-A56F-E030CBEF8E3F/0/R7ResidenceApplicationsAccepted.zip, viewed on 4th April 2016. 732New Zealand Government website, Statistics, http://www.immigration.govt.nz/NR/rdonlyres/C8FC1AEE-7147-44C8-A56F-E030CBEF8E3F/0/R7ResidenceApplicationsAccepted.zip, viewed on 4th April 2016. 733 New Zealand Government website, Statistics, http://www.immigration.govt.nz/NR/rdonlyres/C8FC1AEE-7147-44C8-A56F-E030CBEF8E3F/0/R7ResidenceApplicationsAccepted.zip, viewed on 4th April 2016. 734 Minister of Immigration (2014), Proposal for Business Migration Review http://www.immigration.govt.nz/NR/rdonlyres/7B2C078F-CD8A-402B-833C-9B76BF50AF46/0/cabpaperbusinessmigrationreview.pdf.

http://www.immigration.govt.nz/NR/rdonlyres/C8FC1AEE-7147-44C8-A56F-E030CBEF8E3F/0/R7ResidenceApplicationsAccepted.zip









V1: 18th April 2016 239

■ The points-bases system offers a transparent self-assessment instrument to potential applicants,

and allows a combination of different requirements, rather than a limited list of them, to be met to

qualify for the visa.

■ On the one side, a minimum investment of NZ$ 100,000 (approx. €60,000) is required, to ensure

that business have growth potential; on the other, this requirement can be waived for certain

sector, if the business’ focus is on intellectual rather than financial capital, so that innovative start-

ups are not penalised.

■ A residence visa can be accessed relatively fast (compared to European standards), i.e. after 3

years, or, if the investment and the benefit to the national economy are particularly high, after 6

months.

■ The research can be expanded to fill the following gaps.

■ More data on which types of businesses are set up by migrants can give more information on the

strengths and weaknesses of the scheme. Specifically, data on how many applicants benefit from

the wave of investment requirement and which kinds of companies they set up could give insights

on the role of the minimum investment threshold.

■ Statistics on the visa applications and decisions were available for the consolidation stage of the

business (balance of 3 years); however, statistics on the first year start-up stage were not found.

These would be relevant to understand how many businesses survive after the initial stage.

■ The scheme specifically dedicated to entrepreneurs was described above, however, it remains

unclear whether migrants who entered though other schemes (most importantly, skilled-based, but

not necessarily so) become entrepreneurs and to what extent.

■ The additional rights associated to the Entrepreneur Work Visa, beside family reunification and

access to the Residence Visa, can be researched upon.

■ The control mechanisms (for instance, under which conditions it can be withdrawn?) associated to

the Residence Visa were out of the scope of the present research, but since migrants can access

to the Residence Visa (much) faster than in the EU (after 6 months or 3 years as entrepreneur in

New Zealand, whereas the EU Long Term Residency requires 5 years or residence), it is

important to clarify this aspect.

■ A more in-depth exploration of the available statistics could reveal the applicants’ behaviour, for

instance whether migrants are likely to apply for the Entrepreneur Visa when they are already in

the country on another visa.

■ Finally, although the conditions are very positive for setting up new business, New Zealand, in the

words of the Ministry of Immigration, remains “a small and isolated economy and has few markets

in close proximity”735; it might be therefore worth exploring the motivations behind migrants’

choices to set up their business specifically in New Zealand.

References

■ Immigration New Zealand (2016), Appendix 6 - List of Skilled Occupations,

http://www.immigration.govt.nz/opsmanual/35165.htm, viewed on 12th April 2016.

■ New Zealand Government website, Questions and answers – Entrepreneur Work Visa Category

http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/entrepreneurworkvisa/question

sandanswersentrepreneurworkvisacategory.htm, viewed on 4th April 2016.

■ Bedford, R. (2003), New Zealand: The Politicization of Immigration, MPI,

http://www.migrationpolicy.org/article/new-zealand-politicization-immigration, viewed on 4th April

2016.

735 Minister of Immigration (2014), Proposal for Business Migration Review http://www.immigration.govt.nz/NR/rdonlyres/7B2C078F-CD8A-402B-833C-9B76BF50AF46/0/cabpaperbusinessmigrationreview.pdf.








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■ New Zealand Government website, Entrepreneur Work Visa,

http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/entrepreneurworkvisa/apply.ht

m, viewed on 4th April 2016.

■ New Zealand Government website, Application Fees,

http://www.immigration.govt.nz/NR/rdonlyres/00B58004-04AB-46C6-B32B-

5CE91FBA979A/0/FeesGuide.pdf, viewed on 4th April 2016.

■ New Zealand Government website, Residence for Entrepreneur,

http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/, viewed on 4th April 2016.

■ New Zealand Government website, Statistics,

http://www.immigration.govt.nz/NR/rdonlyres/41E67310-701A-4687-88D9-

F357F5DBC07E/0/W1WorkAppsDecidedbyFY.zip, viewed on 4th April 2016.

■ New Zealand Government website, Statistics,

http://www.immigration.govt.nz/NR/rdonlyres/C8FC1AEE-7147-44C8-A56F-

E030CBEF8E3F/0/R7ResidenceApplicationsAccepted.zip, viewed on 4th April 2016.

■ Parliamentary Counsel Office, Immigration Act 2009,

http://www.legislation.govt.nz/act/public/2009/0051/latest/DLM1440618.html, viewed on 25th April

2016.

■ Immigration New Zealand, Operational Manual,

http://www.immigration.govt.nz/opsmanual/index.htm, viewed on 25th April 2016.

■ Immigration New Zealand, Portal, http://www.immigration.govt.nz/m viewed on 25th April 2016.

■ World Bank (2016), Doing Business Report. Measuring regulatory quality and efficiency,


Reports/English/DB16-Full-Report.pdf, viewed 25th April 2016.

■ New Zealand, Trade and Enterprise, Invest, https://www.nzte.govt.nz/en/invest/new-zealands-

investment-advantage/ viewed on 26th April 2016.

■ Creative HQ, NZ Startup Ecosystem, http://creativehq.co.nz/ecosystem/#, viewed on 26th April

2016.





http://www.immigration.govt.nz/migrant/stream/invest/entrepreneur/





http://www.legislation.govt.nz/act/public/2009/0051/latest/DLM1440618.html


http://www.immigration.govt.nz/m





http://creativehq.co.nz/ecosystem/


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Annex 12 Country Fiche: Singapore

Key Messages:

The Entrepreneur Pass (known also as EntrePass) scheme was introduced in 2004 to

attract foreign entrepreneurs with innovative business proposals. The scheme is part

of Singapore’s general plan to become a regional business hub and attract the best

entrepreneurial minds to the country. The scheme was revised in 2013.

The business must satisfy the ‘innovativeness’ requirement which was introduced in

September 2013.

The application for EntrePass can be made before the incorporation of the business in

Singapore. This application include also the expenses that incur before obtaining the

EntrePass. Once the pass is approved, the applicant has 30 days to incorporate the

proposed business and introduce the necessary share capital.

In select cases for particularly promising businesses, the government will match

investment form the private sector.

An EntrePass visa is valid for up to one year, and is renewable subsequently as long

as the business continues to run.

EntrePass’ admission conditions were restricted in 2013. From 1 September 2013 only

businesses with funding from a recognised venture capitalist firm or angel,

businesses holding registered intellectual property or businesses supported by a

Government agency, are eligible for an EntrePass.

The EntrePass allows the applicant to bring family members (spouse and unmarried

children under 21) to Singapore by applying for their Dependant’s Passes. EntrePass

holders are also eligible to apply for Singapore permanent residence.

There is no official quota of the number of EntrePass to be granted. In 2012, there

were 1,300 EntrePass visa applications and 1,000 applications in 2013, 50% of which

were accepted.


V1: 18th April 2016 242


Rapid economic growth has made Singapore a major attraction for international migrants,

predominantly labour migrants, with official numbers rising from about 80,000 in 1980 to 612,000 in

2002, or 29% of the labour force. Furthermore, Singapore is considered a free port and open economy

as most imports are duty-free. It has based its economic development on a pro-active strategy of

attracting FDI and trade openness.736

Singapore also ranks first in Ease of Doing Business index of the World Bank. Favourable lending to

foreign investors, simple regulatory system, tax incentives, high quality industrial estate parks, political

stability and absence of corruption make Singapore a very attractive destination for investment and

setting up businesses.

From 2004 to 2014, Singapore’s annual GDP declined from 9.5% to 2.9%, mainly due to a maturing

economy. As a mature economy, Singapore, can no longer rely on the traditional sectors alone to

ensure growth737. This has been quite challenging as shipping, shipbuilding, and commodities as

tradition sectors have long been an important share of Singapore’s market capitalisation738. In order to

maintain economic vitality the government aims to foster growth in emerging sectors, notably

information technology and e-commerce. Singapore can capitalize on its ethnic and linguistic links with

many parts of Asia to help foster the creation of an Asian investment and entrepreneur hub. Singapore

has been proactive in attracting foreign tech firms, launching the EntrePass Visa a streamlined visa

for foreign entrepreneurs seeking to found and run businesses in Singapore.

The Singapore Entrepreneur Pass Visa (hereinafter EntrePass)739 scheme was introduced in 2004

to attract foreign entrepreneurs with innovative business proposals740. It is the primary type of work

permit for owners of newly incorporated or to be incorporated companies who wish to relocate to

Singapore to operate their business. The scheme is part of Singapore’s general plan to become a

regional business hub and attract the best entrepreneurial minds to the country. The scheme is jointly

administered by the Ministry of Manpower (MOM) and the Standards, Productivity and Innovation

Board (SPRING) of Singapore. SPRING measures the viability of the proposed venture and MOM is

responsible for granting the EntrePass to successful applicants. EntrePass is approved to

entrepreneurs based on the feasibility and growth prospects of the proposed business741. The

EntrePass allows the holder’s family members to live in Singapore.

In 2013, the Singapore government wanted to restrict immigration742. The rationale behind these

changed was to raise the quality of the profile of the foreign workforce, and ensure that only foreign

entrepreneurs who can insert innovation into Singapore’s business sector can be attracted. Therefore,

MOM announced revisions to the eligibility criteria for the EntrePass scheme. The revisions make it

more difficult to qualify for the EntrePass visa743. From 1 September 2013 only businesses with

736 Lorenzo Riccardi (2016) ‘ Investing in China through Free Trade Zones”, Springer-Verlag Berlin Heidelberg,

234 737 Traditional’ sectors fostered by the government, such as shipping, shipbuilding, and finance have been in decline. 738 Start-ups poised to change politics in Singapore, available at: http://globalriskinsights.com/2015/08/start-ups-poised-to-change-politics-in-singapore/ (Accessed on 6 April 2016). 739 Legislation – Employment of foreign manpower Act, Regulation 9 First published in the Government Gazette, Electronic Edition, on 8th November 2012, No. S 569 available at http://www.mom.gov.sg/~/media/mom/documents/services-forms/passes/wpspassconditions.pdf (Accessed on 6April 2016). 740 Singapore Entrepreneur Pass Guide http://www.guidemesingapore.com/relocation/work-pass/singapore-entrepreneur-pass-guide (Accessed on 5 April 2016). 741 Entrepass Approval & Renewal Information in Singapore available at: http://www.newlandchase.com/immigration-insights/latest-news/singapore-changes-to-the-entrepass-for-entrepreneurs/(Accessed on 5 April 2016). 742 Entrepass- Key facts http://www.mom.gov.sg/passes-and-permits/entrepass/key-facts (Accessed on 5 April 2016). 743 The new requirements introduced in 2013 for foreign entrepreneurs to be eligible under the EntrePass are:

Be receiving funding from a recognized third-party venture capitalist;

http://www.singapore-visa.net/entrepass-singapore

http://globalriskinsights.com/2015/08/start-ups-poised-to-change-politics-in-singapore/

http://globalriskinsights.com/2015/08/start-ups-poised-to-change-politics-in-singapore/

http://www.mom.gov.sg/~/media/mom/documents/services-forms/passes/wpspassconditions.pdf

http://www.guidemesingapore.com/relocation/work-pass/singapore-entrepreneur-pass-guide


http://www.mom.gov.sg/passes-and-permits/entrepass/key-facts


V1: 18th April 2016 243

funding from a recognised venture capitalist firm or angel, businesses holding registered intellectual

property or businesses supported by a Government agency, are eligible for an EntrePass.


The EntrePass is a business visa type targeted to foreign entrepreneurs, who would like to set up a

new company in Singapore or relocate an existing one744. The visa should be processed prior the

incorporation of the company (or six months after). EntrePass scheme is a beneficial and easy

business relocation solution along with low tax rates and swift 1-day company registration745. The

scheme is mainly addressed to techno-preneurs and R&D-intensive enterprises seeking to establish a

presence in Singapore746.

The EntrePass holder obtains the following advantages747:

■ A financial support of around S$3,000 by a Singapore-based company (refunded when the

Singapore entrepreneur visa ends);

■ A deadline of 30 days to set up the business after approval of the visa;

■ One year visa with a possibility of future renewals provided that the business is still operational;

■ EntrePass processed before incorporation of the company or 6 months after it;

■ A permanent residence permit after 2 years of successful business; and

■ Low corporate tax rate of 17%748.

There is no official quota on the number of EntrePass to be granted.

Admission criteria

As a general rule, any foreigner above the age of 21 is eligible to apply EntrePass if fulfilling the

following conditions749:

■ Establish a business in Singapore or relocate a business to Singapore;

■ Establish an innovative and entrepreneurial business;

■ Have an entrepreneurial and/or relevant background;

■ The company is not yet incorporated or the company is not more than six months old at the time of

EntrePass application;

■ Have at least 30% shareholding in the proposed business;

■ Have a minimum capital of S$50,000 (approx. €32,000;

Hold a proprietary or licensed Intellectual Property (IP) recognized by an approved national IP institution;

Have research collaboration with a research institution recognized by the Agency for Science, Technology and Research (A*STAR) or any local tertiary institution;

Be supported by a recognized enterprise incubator scheme supported by SPRING Singapore or National Research Foundation (NRF); or

Be receiving support from a Singapore Government agency.

744 Singapore Entrepreneur Pass (EntrePass) Scheme available at: http://www.guidemesingapore.com/relocation/work-pass/singapore-entrepreneur-pass-guide (Accessed on 6 April 2016). 745 Ibid 746 ingapore Entrepass (Entrepreneur Pass) http://www.singapore-company-registration.net/singapore-entrepass-entrepreneur-pass/ (Accessed on 6 April 2016). 747 Singapore Visa http://www.singapore-visa.net/entrepass-singapore (Accessed on 5 April 2016). 748 Singapore Entre Pass visa http://www.one-visa.com/singapore-entrepass-service (Accessed on 5 April 2016). 749 Singapore Ministry of Manpower website http://www.mom.gov.sg/passes-and-permits (Accessed on 5 April 2016).


http://www.singapore-company-registration.net/singapore-entrepass-entrepreneur-pass/



http://www.one-visa.com/singapore-entrepass-service

http://www.mom.gov.sg/passes-and-permits


V1: 18th April 2016 244

■ Sponsored by a well-established Singapore-registered company or are able to furnish a Banker’s Guarantee of S$3,000 (approx. €3000) issued by a Singapore-based bank upon approval of

application.

■ In select cases for particularly promising businesses, the government will match investment form

the private sector.750

In addition to the above, to demonstrate ‘innovativeness’, the applicant must also fulfil at least one of the following conditions751:

■ The company is receiving monetary funding or investment of at least S$100,000 (approx. €65,000)

from a Venture Capitalist (VC) or an accredited angel investor;

■ The company holds a registered Intellectual Property Right (IPR);

■ The company has on-going research collaboration with an institution recognised by Agency for

Science, Technology and Research (A*STAR) or Institutes of Higher Learning in Singapore.

■ The company is supported by a Singapore Government-incubator.

Regarding the last criteria, the incubators are selected by the Ministry of Manpower. The Singapore

government co-invests in start-ups together with a third-party investor. The popular government-

backed financing schemes include the following:

■ SPRING Startup Enterprise Development Scheme (SPRING SEEDS752): SPRING SEEDS is an

equity investment scheme where SPRING SEEDS Capital, a subsidiary of government agency SPRING Singapore, co-invests in Singapore-based start-ups awith at least (€200.000) investment

capital. The Incubator Development Programme (IDP), part of Spring SEEDS provides up to 70%

grant support to incubators to improve their capabilities and programmes to better support

innovative start-ups753.

■ Business Angels Scheme (BAS)754: It is an investment scheme where SPRING SEEDS Capital,

a subsidiary of SPRING Singapore, co-invests in innovative Singapore-based start-ups with at least (€1 million) investment capital.

■ Early-Stage Venture Funding Scheme (EVFS)755: It is a co-funding scheme where selected

venture capital firms with at least S$10 million (around €7 million) from third-party investors.

The incubator/accelerator are contacted by the applicant. They evaluate the business idea of the

applicant and decide whether to support or not. They also help with the paperwork and support the

applicant to understand the market and conditions.


To apply for EntrePass Visa, the applicants need to present the documents756:

■ Completed EntrePass application form;

■ Evidence of the innovativeness of the business;

750 Vivek Wadha (2012), ‘The Immigrant Exodus’ 751 Ibid 752 http://www.spring.gov.sg/Nurturing-Startups/SEEDS/Pages/spring-start-up-enterprise-development-scheme.aspx (Accessed on 6 April 2016). 753 http://www.spring.gov.sg/Nurturing-Startups/Pages/incubator-development-programme.aspx (Accessed on 5 April 2016). 754 http://www.spring.gov.sg/Nurturing-Startups/Pages/business-angel-scheme.aspx (Accessed on 6 April 2016). 755 http://www.nrf.gov.sg/innovation-enterprise/national-framework-for-research-innovation-and-enterprise/early-stage-venture-fund (Accessed on 6 April 2016). 756 Singapore Entrepreneur Pass (EntrePass) Scheme available at: http://www.guidemesingapore.com/relocation/work-pass/singapore-entrepreneur-pass-guide (Accessed on 5 April 2016).

http://www.spring.gov.sg/Nurturing-Startups/SEEDS/Pages/spring-start-up-enterprise-development-scheme.aspx

http://www.spring.gov.sg/Nurturing-Startups/SEEDS/Pages/spring-start-up-enterprise-development-scheme.aspx

http://www.spring.gov.sg/Nurturing-Startups/Pages/incubator-development-programme.aspx

http://www.spring.gov.sg/Nurturing-Startups/Pages/business-angel-scheme.aspx

http://www.nrf.gov.sg/innovation-enterprise/national-framework-for-research-innovation-and-enterprise/early-stage-venture-fund

http://www.nrf.gov.sg/innovation-enterprise/national-framework-for-research-innovation-and-enterprise/early-stage-venture-fund



V1: 18th April 2016 245

■ A business plan;

■ A copy of the company’s bank statement if the company is incorporated prior to the submission of

application

■ A copy of the company’s latest business profile, if incorporated already;

■ A passport photograph of the founder taken the past three months;

■ Evidence of previous employment(s) and/or business venture(s), if any;

■ Copies of educational certificates, if any;

■ Other documents that can be useful to the application.

Along with the EntrePass application form, the entrepreneur has to provide a comprehensive

business plan of around 10 pages including the following elements757:

■ A short summary about the business concept;

■ Details about the offered business: products, services to provide;

■ Analysis of industry potential in Singapore, key competitors, and potential for growth;

■ A Marketing plan;

■ An operational plan description deals specifically with the internal operations and resources;

■ A summary of key management individuals running the business; and

■ Projected sales and net profit before tax for three years.

The EntrePass application, supported by the above-mentioned documents should be filed with

Singapore Ministry of Manpower (MOM). The evaluation is done by two government bodies:

Standards, Productivity and Innovation Board Singapore SPRING and MOM758.

Once submitted, the evaluation of application takes about 6-8 weeks759. If the application is

successful, an Approval In-Principle (AIP) letter is issues. The entrepreneur has then 30 days to

register the company, open a bank account and provide the required share capital (if the company is

not registered yet)760. In practice, the registration generally takes 1-2 days761. The proof of company

registration is provided to MOM, after which it issues a final approval letter (known as In-Principal

Approval letter (IPA)). In certain cases, the applicant might be required to go through a medical

test762. The requirement to undergo a medical test is evaluated on case by case baiss and included in

the AIP letter. Generally, the medical test includes a physical examination and some blood tests (to

rule out serious diseases) and would usually require you to undergo an HIV Test and a Chest X-Ray.

Once the final IPA has been issued, the entrepreneur can relocate to Singapore within 6 months763.

The family members of the entrepreneurs can apply for Dependant’s Passes (DP) at the same time of

EntrePass.

To require a Dependant's Pass, the applicant has to satisfy the following criteria:

757 Singapore Entrepreneur Pass (EntrePass) Services http://www.singaporecompanyincorporation.sg/services/relocation-and-immigration/entrepass-services/ (Accessed on 5 April 2016). 758 Ministry of Manpower website : http://www.mom.gov.sg/passes-and-permits/entrepass/key-facts (Accessed on 5 April 2016). 759 Ministry of Manpower website - Eligibility for EntrePass available at: http://www.mom.gov.sg/passes-and-permits/entrepass/eligibility (Accessed on 5 April 2016). 760 Singapore entrepreneur Pass, available at: http://www.guidemesingapore.com/relocation/work-pass/singapore-entrepreneur-pass-guide (Accessed on 5 April 2016). 761 Ibid 762 Ibid 763Entrepreneur Pass – Business Work http://www.bycpa.com/html/news/20095/1380.html (Accessed on 5 April 2016).

http://www.singaporecompanyincorporation.sg/services/relocation-and-immigration/entrepass-services/


http://www.mom.gov.sg/passes-and-permits/entrepass/eligibility




http://www.bycpa.com/html/news/20095/1380.html


V1: 18th April 2016 246

■ Hold an Employment Pass or S Pass;

■ Earn a minimum fixed monthly salary of $5,000 (approx. €3,000); and

■ Receive financial support by a Singapore-registered company.

The Dependant’s Pass is granted within 7 working days, if applied online and within 5 weeks if applied

manually,

The documents needed to apply for a Dependant's Pass are illustrated in Table A12.1 below:

Table A12.1 Documents to be provided for Dependant’s Pass

Family members Documents

Spouse (legally married) Copy of the passport

Copy of the marriage certificate

Unmarried children under 21 year Copy of the official birth certificate stating the parent's

names

Unmarried, legally adopted children under 21 years Copy of the adoption order or other relevant documents

Source: Ministry of Manpower 2016

The EntrePass is valid for up to two years. As a general rule, three months before its expiry, a renewal

request is sent to the entrepreneur by MOM. EntrePass renewal application requires the following

documents:

■ Latest copy of business profile;

■ Latest audited accounts764;

■ Highest educational certificates of local employees;

■ CPF statements for the employees.

■ Office Tenancy Agreement.

In addition to the above, evidence on the office rental agreement, invoices issued, and/or contracts

awarded are also required765.

For all successful EntrePass entrepreneurs who submitted their application after 1 September 2013,

there are some renewal criteria to be satisfied:

Table A12.2 Renewal criteria as from 2013

NO. OF YEARS AFTER AWARD OF ENTREPASS

NO. OF LOCAL JOBS CREATED

MINIMUM TOTAL BUSINESS SPENDING

EMPLOYMENT PASS (EP) STATUS766

1 2 S$100,000 (€ 65,000) Q1767

2 4 S$150,000 (€97,000) Professionals (P2)768

3 6 S$200,000 (€130,000) Professionals (P2)

4 8 S$300,000 (€195,000) P1

≥5 10 S$400,000 €(260,000) P1

Source: Ministry of Manpower (MOM) 2014

764 Ibid 765 http://www.mom.gov.sg/passes-and-permits/entrepass/eligibility (Accessed on 5 April 2016). 766 ‘P’ and ‘Q’ employment passes, which are determined by skill and salary levels, offer differential rights. 767 Foreigner earning a fixed monthly salary of more than S$3,000 and possesses recognised qualifications. 768 Foreigner has to earn a fixed monthly salary of S$4,500 and above, and possess acceptable.

Qualifications.



V1: 18th April 2016 247

The processing time for renewals takes around 4-6 weeks. As indicated in the table above, local jobs

created refers to full-time employment of Singaporeans for at least 3 months, under a contract of

service769.

EntrePass holders are eligible to apply for permanent residence, which is subject to approval by the

Singapore immigration authority770.This authority evaluates whether the entrepreneur is running a

viable and innovative business, and whether the business is not become a financial burden on

Singapore771. In addition, the EntrePass holder can bring family members to Singapore, but under

certain conditions772:

■ Renewed the pass (not possible during the first application);

■ Meet the minimum amount of total business spending;

■ Created the minimum number of local jobs;

The requirements for total business spending and local jobs created are:

Table A12.3 Requirements to bring family members

Family member Minimum total business spending No. of local jobs created

Spouse or children $150,000 (€97,000) ≥ 4

Parents $300,000 (€195,000) ≥ 8

Source: ICF based on the findings at Ministry of Manpower website


Dependant passes granted to immediate family members of EntrePass holder, allow them to live,

study and work and study in Singapore. Different pass types apply for different family members, as

illustrated in Table 2.3 below:

Table A12.4 Type of pass by family member

Family member Type of pass

Spouse (legally married) Dependant's Pass773

Unmarried children under 21 years old ( including

those legally adopted)

Common-law spouse Long Term Visit Pass774

Unmarried handicapped children above 21 years old

Unmarried step-children under 21 years old

Source: ICF based on the findings at Ministry of Manpower website

769 Eligibility for EntrePass http://www.guidemesingapore.com/relocation/work-pass/entrepreneur-pass-faqs (Accessed on 5 April 2016). 770 Ibid 771 Ibid 772 Ministry of Manpower – Passes for Familyhttp://www.mom.gov.sg/passes-and-permits/entrepass/passes-for-family (Accessed on 5 April 2016). 773 Ministry of Manpower – Documents required http://www.mom.gov.sg/passes-and-permits/dependants-pass/documents-required (Accessed on 5 April 2016). 774 Ministry of Manpower – Long-term visit pass http://www.mom.gov.sg/passes-and-permits/long-term-visit-pass (Accessed on 5 April 2016).

http://www.guidemesingapore.com/relocation/work-pass/entrepreneur-pass-faqs

http://www.mom.gov.sg/passes-and-permits/entrepass/passes-for-family


http://www.mom.gov.sg/passes-and-permits/dependants-pass/documents-required


http://www.mom.gov.sg/passes-and-permits/long-term-visit-pass


V1: 18th April 2016 248


In 2012, there were 1,300 EntrePass visa applications and 1,000 application in 2013, 50% of which

were rejected775.

Unfortunately, no further statistics were possible to find.


According to World Bank’s Doing Business Report 2013776, Singapore was on the top of the list for the

seven consecutive year. The low tax policy and business friendly regulations are considered attractive

for migrant entrepreneurs.

World Economic Forum’s Global Competitiveness Report 2013–2014777 also ranked Singapore state

as the second most competitive economy in the world (after Japan), offering the best IP protection,

incentives in Asia for foreign entrepreneurs.

Singapore can capitalize on its ethnic and linguistic links with many parts of Asia to help foster the

creation of an Asian investment and entrepreneur hub.778 Singapore has been proactive in attracting

foreign tech firms, launching the EntrePass program, a streamlined visa for foreign entrepreneurs

seeking to found and run businesses in Singapore. Unlike similar programs in other countries,

EntrePass allows applicants to raise start-up capital from any source, not just Singaporean investors.

EntrePass scheme is a beneficial and easy business relocation solution along with low tax rates and

registering a company in Singapore is swifter than in other jurisdictions – i.e. 1-day company

registration779. Applicants can also apply for permanent residency in two years – or after only one

renewal of the one year visa.

References

■ Eligibility for EntrePass http://www.guidemesingapore.com/relocation/work-pass/entrepreneur-

pass-faqs

■ Entrepass Approval & Renewal Information in Singapore available at:

http://www.paulhypepage.com/guide-faq/entrepass-approval-renewal-information-in-singapore/

■ Entrepass- Key facts http://www.mom.gov.sg/passes-and-permits/entrepass/key-facts

■ Entrepreneur Pass – Business Work http://www.bycpa.com/html/news/20095/1380.html

■ Singapore Entrepass (Entrepreneur Pass) http://www.singapore-company-

registration.net/singapore-entrepass-entrepreneur-pass/

■ Josephine G, Daniel L-K, (2015), “Worldwide start-up visa policies compared”, Migreat London.

Available at:

http://a.migreatstatic.com.s3.amazonaws.com/reports/Open%20Borders%20to%20Entrepreneurs.

%20Migreat%20Report.%20May%202015.pdf

■ Ministry of Manpower – Documents required http://www.mom.gov.sg/passes-and-

permits/dependants-pass/documents-required

775 Josephine G, Daniel L-K, (2015), Worldwide start-up visa policies compared, Migreat London. Available at: http://a.migreatstatic.com.s3.amazonaws.com/reports/Open%20Borders%20to%20Entrepreneurs.%20Migreat%20Report.%20May%202015.pdf 776 World Back Doing Business Report 2013, available at: http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-Reports/English/DB13-full-report.pdf (Accessed 6 April 2016). 777 World Economic Forum’s Global Competitiveness Report 2013–2014, available at: http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf (Accessed 6 April 2016). 778 http://globalriskinsights.com/2015/08/start-ups-poised-to-change-politics-in-singapore/ 779 Ibid




http://www.paulhypepage.com/guide-faq/entrepass-approval-renewal-information-in-singapore/


http://www.bycpa.com/html/news/20095/1380.html



http://a.migreatstatic.com.s3.amazonaws.com/reports/Open%20Borders%20to%20Entrepreneurs.%20Migreat%20Report.%20May%202015.pdf






http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-Reports/English/DB13-full-report.pdf


http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf


V1: 18th April 2016 249

■ Ministry of Manpower – Long-term visit pass http://www.mom.gov.sg/passes-and-permits/long-

term-visit-pass

■ Ministry of Manpower – Passes for Family http://www.mom.gov.sg/passes-and-

permits/entrepass/passes-for-family

■ Ministry of Manpower website - Eligibility for EntrePass available at:

http://www.mom.gov.sg/passes-and-permits/entrepass/eligibility (Accessed on 5 April 2016).

■ Singapore Entre Pass visa http://www.one-visa.com/singapore-entrepass-service

■ Singapore Entrepreneur Pass (EntrePass) Scheme available at:


■ Singapore Entrepreneur Pass (EntrePass) Services, available at :

http://www.singaporecompanyincorporation.sg/services/relocation-and-immigration/entrepass-

services/

■ Singapore Entrepreneur Pass Guide available at :


■ Singapore Ministry of Manpower website http://www.mom.gov.sg/passes-and-permits

■ Singapore Visa http://www.singapore-visa.net/entrepass-singapore

■ World Back Doing Business Report 2013


Reports/English/DB13-full-report.pdf

■ World Economic Forum’s Global Competitiveness Report 2013–2014






http://www.one-visa.com/singapore-entrepass-service





http://www.mom.gov.sg/passes-and-permits






V1: 18th April 2016 250

Annex 13 Country Fiche: United States

Key Messages:

In the United States there is no stand-alone, dedicated visa for innovative start-ups.

However, there are a number of other types of visas that can be used for such

purposes.

The US system is rather lenient. While in most OECD countries credibility, especially

previous business experience and submitting a sound business plan, is crucial to get

a visa, there are no such requirements in the US. Age restrictions and requirements

on language abilities are also absent.

Assessment periods have become lengthier recently; it may take over a year to get an

EB 5 visa.

The EB 5 visas became highly attractive recently driven by demand from China. The

number of visas that can be given out a year is capped, although this was

unnecessary in most years so far since the program was severely undersubscribed.

The caps only became relevant in the last few years, when the limit was reached. The

demand has mostly risen in respect of Chinese applicants.

The success of US start-up attraction may not be simply attributed to the visas

available. The US has an attractive business environment which is the primary cause

of innovative start-ups targeting the country. The visa system simply enables them to

set up their business in the US, but is not an attracting factor.

The US system is prone to abuse (frauds). This is essentially because the Federal

Government only has loose oversight on the regional centres who are primarily

interested in attracting funds. Frauds cases occurred since the start of the

introduction of the visas and, albeit a reform took place to solve this problem, frauds

still occur.


V1: 18th April 2016 251


The United States does not currently have a start-up visa, but there are alternative visas that may prove to be attractive to potential entrepreneurs.780There have been plans to establish a Startup visa in the United States. Bi-partisan legislative proposals were introduced to the Senate in 2010, 2011 and 2013781 but have not been adopted. It was found that Temporary visas, including H-1B visas, are ill-suited for entrepreneurs and can be disallowed for use by a foreign national who controls a company. Startups have been shown to be responsible for much of the net increase in employment in some recent years. As discussed in the U.S Congress, “The Startup Act,” could create 500,000 to 1.6 million jobs over the next 10 years if it becomes law.782 The proposed start-up visa aimed to address two problems. Firstly, it would correct the problem that no visa category exists for a foreign national to gain permanent residence as an entrepreneur. Secondly, the proposed bill would have relatively few bureaucratic requirements so as to allow the new visa category to function well.783

The blue box below shows how the Startup visa was envisaged in the latest draft Bill.

In November 2014, U.S. President Obama

announced the creation of an easier visa route

for entrepreneurs and start-up founders.785 A

memo was released by the Department of

Homeland Security, which reveals a significant

new opportunity for foreign entrepreneurs:

parole status. Parole status is typically granted

for humanitarian or medical relief as a way to

enter the country without a visa. The DHS

recommended that the U.S. Citizenship and

Immigration Services propose such a program

that would enable inventors, researchers and

start-up founders to legally come to the U.S. for

an unspecified period of time. This

announcement pointed at the creation of a fast-

tracked visa process for entrepreneurs and

founders. This means that applications of

entrepreneurs would get processed faster,

using an existing provision known as “parole”.

President Obama has proposed expanding the

use of “national interest waivers” and granting

“parole” to give more foreign-born

entrepreneurs a chance to stay in America long terms to build their businesses. Given that

adjudicators are not known for giving great deference to employer-sponsored immigration, including

startup activities, administrative policy changes are likely to be less effective than a legislative solution

that establishes an entrepreneur visa.

780 Migreat (2015), “Worldwide start up visa compared” P. 9. 781 Startup Visa Act of 2010 introduced in Senate on24th February 2010 which expired in the Judiciary Committee at the end of 111th Congress and was not enacted https://www.congress.gov/bill/112th-congress/senate-bill/565

Startup Visa Act of 2011 introduced in Senate on14th March 2011 which expired in the Judiciary Committee at the end of 112th Congress and was not enacted;

Startup Visa Act of 2013 has been introduced in the Senate on January 30, 2013 782 National Foundation for American Policy, Policy Brief 2016 783 Ibid

784http://www.kauffman.org/newsroom/2013/02/startup-visa-could-create-at-least-16-million-us-jobs-in-next-10-

years-according-to-kauffman-foundation-report

785 http://blog.migreat.com/2014/12/09/is-a-front-door-for-migrant-entrepreneurs-opening-in-the-us/

Legislative proposal Startup Visa Act 3.0 – Not adopted784

The latest proposal Startup Act 3.0 bill introduced in the U.S. Senate entailed a fixed pool of 75,000 foreign-born individuals who already hold H-1B visas or F-1 student visas and who start companies in the US. In the first year of business, these entrepreneurs would be required to employ at least two full-time, non-family workers and to invest or raise an investment of $100,000 or more. By meeting the first-year requirements, recipients would be granted a three-year visa extension. If, over that three-year period, the business owner has hired, on average, one additional employee each year, they may apply for permanent status.

http://www.dhs.gov/sites/default/files/publications/14_1120_memo_business_actions.pdf

https://www.congress.gov/bill/112th-congress/senate-bill/565

http://www.kauffman.org/newsroom/2013/02/startup-visa-could-create-at-least-16-million-us-jobs-in-next-10-years-according-to-kauffman-foundation-report

http://www.kauffman.org/newsroom/2013/02/startup-visa-could-create-at-least-16-million-us-jobs-in-next-10-years-according-to-kauffman-foundation-report

http://blog.migreat.com/2014/12/09/is-a-front-door-for-migrant-entrepreneurs-opening-in-the-us/


V1: 18th April 2016 252

The table below provides an overview of the proposals for special admission of entrepreneurs in the

US.

Table A13.1 Proposals for start-up visa

U.S.: proposed

Startup Visa (S.565) –

applications from

abroad

Raise at least $100,000 from a

qualified U.S. investor.

Create 5 jobs and raise additional $500,000 in

capital investment or revenue within 2 years.

U.S.: proposed

Startup Visa (S.565) –

applications within the

country

Raise at least $20,000 from a

qualified U.S. investor; hold an H-1B

visa or another visa and an

advanced STEM (science,

technology, engineering, math)

degree from a U.S. institution.

Create 3 new jobs and raise at least $100,000 in

new investment or revenue within three years.

U.S.: proposed

Startup Visa 2.0 (S.

3217)

Hold an H-1B visa or an advanced

STEM degree from a U.S.

institution.

Within the first year, create 2 jobs and raise

$100,000 investment funds from any source;

within the first four years, create 5 jobs.

U.S.: proposed

Startup Visa 3.0

Hold H-1B visas or F-1 student

visas

individuals who already hold H-1B visas or F-1

student visas and who start companies in the US.

In the first year of business, these entrepreneurs

would be required to employ at least two full-time,

non-family workers and to invest or raise an

investment of $100,000 or more.

Obama’s

announcement of

‘Parole status’

Parole status is typically granted for

humanitarian or medical relief as a

way to enter the country without a

visa.

The DHS recommended that the U.S. Citizenship

and Immigration Services propose such a

program that would enable inventors, researchers

and startup founders to legally come to the U.S.

for an unspecified period of time.

The US citizenship and immigration services website786 indicates that foreign entrepreneurs can enter

the US under different pathways which are outlined in Table 1.1 below.

While many immigrants are successful entrepreneurs in the US, they accomplish this only after

gaining permanent residence through other schemes of the legal immigration system, either as a

refugee or as a family or employer sponsored immigrant.

The closest to start up business is the EB-5 Immigrant Investor visa, which is actually for investors, not

entrepreneurs. Foreign nationals invest usually $500,000 in ongoing projects, known as Regional

Center Projects.

The E-2 visa for treaty investors is for temporary status (not permanent residence) and is not open to

entrepreneurs from India, China and a number of other countries.

Table A13.2 Non-immigrant (temporary) and immigrant (permanent) visa pathways for entrepreneurs

Type of visa Brief overview Period of stay

Non-

immigrant

(temporary)

visas

B-1 Business investor Foreigners coming to the United States as a business visitor in order to secure funding or office space, negotiate a contract, or attend certain business meetings in connection with opening a new business in this country

Up to 6 months; extension possible

F-1 OTP Optional Practical Training Foreigners F-1 student in the United States seeking to start a business that is directly related to the major area of

Up to 12 months of OPT An F-1 student with a qualifying

786 USCIS, “Entrepreneur Visa Guide” available at: http://www.uscis.gov/eir/visa-guide/entrepreneur-visa-guide (accessed 23 February 2016)

http://www.uscis.gov/eir/visa-guide/entrepreneur-visa-guide


V1: 18th April 2016 253


study. Students in English language training programs, however, are ineligible for OPT.

Science, Technology, Engineering or Mathematics (STEM) degree may apply for a 17-month extension of their post-completion OPT.

H1-B Specialty Occupation Foreigners planning to work for the

business they start in the United

States in an occupation that

normally requires a bachelor’s

degree or higher in a related field of

study (e.g., engineers, scientists or

mathematicians), and have at least

a bachelor’s degree or equivalent in

a field related to the position.

Up to 6 years.

Extensions possible

in up to 3 years

increments

O-1A Extraordinary ability and

achievement

Foreigners with extraordinary ability

in the sciences, arts, education,

business or athletics, which can be

demonstrated by sustained acclaim

and recognition, and be coming to

the United States to start a business

in their field. Extraordinary ability

means a level of expertise indicating

the person is one of the small

percentage of people who have

risen to the very top of their field.

Up to 3 years.

Extensions possible

in up to 1 year

increments

E-1 Treaty Trader Foreigners nationals of a country with

which the United States maintains a

treaty of commerce and navigation

and who carry on substantial trade

maximum initial stay

of two years.

Requests for

extension of stay

may be granted in

increments of up to

two years

E-2 Treaty Investors

https://www.uscis.gov/node/41125

Foreigners who invest a substantial amount of money in a new or existing U.S. business from a country that has a treaty of commerce and navigation with the United States or a country designated by Congress as eligible for participation in the E-2 nonimmigrant visa program.

Up to 2 years.

Extensions possible

in up to 2 year

increments

Immigrant

(permanent)

visas

EB-1 Extraordinary Ability

Extraordinary ability in the sciences,

arts, education, business, or

athletics as demonstrated by

sustained national or international

acclaim and recognized

achievements in the field of

expertise. In addition, you must

show that you will continue working

in your area of extraordinary ability.

Extraordinary ability means that your

level of expertise indicates that you

are one of the small percentage of

individuals who have risen to the

very top of your field. You may self-

petition as an extraordinary ability

individual since a job offer is not

Permanent

settlement




V1: 18th April 2016 254


required for this classification.

EB-2 Classification and National

Interest Waiver

The EB-2 classification is divided

into two sub-categories:

professionals with advanced

degrees and individuals with

exceptional ability in the sciences,

arts or business. Although a job

offer from an employer and a labor

certification from the Department of

Labor are generally required for the

EB-2 classification, you may be

eligible to self-petition if you are

asking for a waiver of the labor

certification requirement based on

the national interest.

Permanent

settlement

EB-2 Advanced Degree Professional

You may be eligible for this category

if: (1) you are a professional holding

a U.S. master’s degree or higher or

foreign equivalent degree that

relates to the field you will be

working in; or (2) you have a U.S.

Bachelor’s degree or foreign

equivalent degree and at least 5

years of progressively responsible

experience in your field after

receiving your Bachelor’s degree.

Permanent

settlement

EB-2 Exceptional Ability

You may be eligible for this category

if you have exceptional ability in the

sciences, arts, or business.

Exceptional ability means that you

have a degree of expertise

significantly above that ordinarily

encountered in the sciences, arts or

business.

Permanent

settlement

EB-5 Immigrant investor Available for foreigners who invest

at least USD 1 million in the creation

of a new commercial enterprise that

employs at least ten full-time

American workers (or foreigners

authorised to work in the United

States)

Permanent

settlement

U.S. Citizens and Immigration Services https://www.uscis.gov/eir/visa-guide/entrepreneur-visa-guide

The following self-employed/entrepreneurs visas are available for the US, which are suitable for

innovative start-ups: (1) EB-5 visa; (2) E-1 and E-2 Treaty investors visa and (3) H1-B

(1) EB-5 visa

The EB-5 Visa is available specifically for Immigrant Investors. Congress created the EB-5 Program in

1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors.

The following types of EB-5 visas are available:

■ EB-5 residence

■ EB-5 residence visa for investment in a Targeted Employment Area (TEA)

■ EB-5 residence visa pilot

■ EB-5 residence visa pilot in a TEA





https://www.uscis.gov/eir/visa-guide/entrepreneur-visa-guide


V1: 18th April 2016 255

EB-5 residence is available for foreigners who invest at least USD 1 million in the creation of a new

commercial enterprise that employs at least ten full-time American workers (or foreigners authorised to

work in the United States). For the EB-5 residence TEA the minimum capital requirement for an EB-5

visa is halved for investments in a rural area or in an area where the unemployment rate is two and a

half times higher than the national average (TEA). These visas are capped at 10 000 per year. 787

In 1992, Congress created the Immigrant Investor Program, also known as the Pilot Program. Under

this program a further 3 000 EB-5 visas (per year) may be granted788 for participants who invest in

commercial enterprises associated with regional centres approved by USCIS based on proposals for

promoting economic growth.789 The requirements under the Pilot Program are essentially the same as

in the basic EB-5 investor program, except it is affiliated with an economic unit known as a “Regional

Centre” and it allows for a less restrictive job creation requirement based upon the creation of

“indirect” and “direct” jobs.790 While the program is still technically a pilot, the majority of visas

administered annually since 2007 have been through regional centres. The program has been

continuously reauthorized, most recently in 2012, when the program was renamed to regional centre

program (the word “pilot” was dropped from the name).”791

(2) Treaty investors E-1 and E-2

The United States has two further temporary visas (the E-1 treaty trader and E-2 treaty investors),

for nationals of third countries with which the United States maintain a treaty of commerce and

navigation.792

To qualify for E-1 classification, the treaty trader must:

■ Be a national of a country with which the United States maintains a treaty of commerce and

navigation;

■ Carry on substantial trade; and

■ Carry on principal trade between the United States and the treaty country which qualified the treaty

trader for E-1 classification793

E-2 Treaty Investor visas are available to foreigners coming to the US to invest a substantial amount

of money in a new or existing U.S. business. Admission requirements for the E-2 programme are less

stringent than those for the EB-5.794 Similarly to the E-1, foreigner must come from a country that has

a treaty of commerce and navigation with the United States or a country designated by Congress as

787 USCIS, “EB-5 Immigrant Investor Pilot Program” available at: https://www.uscis.gov/sites/default/files/USCIS/Resources/Resources%20for%20Congress/Congressional%20Reports/EB-5%20Investor%20Pilot%20Program.pdf (accessed 29 Bebruary 2016) p. 7. 788 Any economic unit, private or public, engaged in the promotion of economic growth through increased export sales, improved regional productivity, job creation and increased domestic capital investment in a geographical area approved by the government to receive capital inflows from immigrant investors is a “regional centre” under the EB-5 pilot scheme. - OECD (2010), “Open for Business: Migrant Entrepreneurship in OECD Countries”, OECD Publishing p. 70. 789 USCIS, “EB-5 Immigrant Investor Program” available at: http://www.uscis.gov/eb-5 (accessed 23 February 2016) 790 USCIS, “EB-5 Immigrant Investor Pilot Program” available at: https://www.uscis.gov/sites/default/files/USCIS/Resources/Resources%20for%20Congress/Congressional%20Reports/EB-5%20Investor%20Pilot%20Program.pdf (accessed 29 Bebruary 2016) p. 7. 791 Audrey Singer, Camille Galdes, “Improving the EB-5 Investor Visa Program: International Financing for U.S. Regional Economic Development” available at: http://www.brookings.edu/~/media/research/files/reports/2014/02/05-eb5/eb5_report.pdf (accessed 23 February 2016) p. 4. 792 OECD (2010), “Open for Business: Migrant Entrepreneurship in OECD Countries”, OECD Publishing p. 65. 793 USCIS “E-1 Treaty Traders” available at: https://www.uscis.gov/working-united-states/temporary-workers/e-1-treaty-traders (Accessed 29/02/16) 794 OECD (2010), “Open for Business: Migrant Entrepreneurship in OECD Countries”, OECD Publishing p. 75.

https://www.uscis.gov/sites/default/files/USCIS/Resources/Resources%20for%20Congress/Congressional%20Reports/EB-5%20Investor%20Pilot%20Program.pdf


http://www.uscis.gov/eb-5



http://www.brookings.edu/~/media/research/files/reports/2014/02/05-eb5/eb5_report.pdf

https://www.uscis.gov/working-united-states/temporary-workers/e-1-treaty-traders



V1: 18th April 2016 256

eligible for participation in the E-2 non-immigrant visa program. The visa grants an initial period of stay

up to 2 years which may be extended or renewed in 2 year increments.795

(3) H1-B visas

Until relatively recently, it was unclear whether or not individuals who owned businesses (Self-Employed) could get their company to sponsor them to obtain an H-1B Visa. In this regard, USCIS takes the position that in cases where the H-1B beneficiary is self-employed or has an ownership

interest in the petitioning entity, the petition must demonstrate that the petitioning entity is distinct from the beneficiary such that there is an employer-employee relationship that the entity (not the individual) can control. In these cases, it is very important to document the employer-employee relationship and the petition must include clear documentation to establish this. This includes that the employer, and not the individual, will have the right to supervise, direct and review the business owner’s work and terminate/fire his or her employment.


The design of the different schemes available in the US are summarised above.

Admission criteria

EB-5 and E-1 and E-2 visas The E5 visas are administered by the United States Citizenship and Immigration Services (USCIS).

The criteria of granting self-employed/entrepreneur visas are summarised in the table below:

Table A13.3 Admission criteria of self-employed/entrepreneurs visas in the US

Admission requirements/ programme

EB-5 residence visa

EB-5 residence visa for investment in a Targeted Employment Area (TEA)

EB-5 residence visa pilot

EB-5 residence visa pilot in a TEA

E-1 visa (Treaty trader), based on a Treaty of Commerce and Navigation according to INA, 101(a)(15)(E)

E-2 visa (Treaty investor), based on a Treaty of Commerce and Navigation according to INA, 101(a)(15)(E)

Minimum

investment

USD 1

million

USD 500 000 USD 1

million

USD 500

000

No, but trade must

be

"substantial"

No, but investment

must be

"substantial"

Minimum jobs

created

10 (direct creation of jobs US

residents other than the

applicant and his/her family

No, but prove indirect

creation of 10 jobs as a

result of the activity (e.g.

induced jobs)

No No

Experience No No No No Existing trade:

trade between the

partner country

and the US must

already be

in progress on

behalf of the

individual.

No

Other Invest and

be involved

in a new

commercial

enterprise;

Invest and be

involved in a

new

commercial

enterprise in a

TEA (rural

Invest and

be involved

in the

operation of

a new

commercial

Invest and

be

involved in

the

operation of

a new

■ "Substantial

trade" within

the meaning of

INA*, and

>50% trade

must be

Invest in and

operate a

nonmarginal and

self-supporting

commercial

enterprise in the US

795 USCIS, “E-2 Treaty Investors” available at: https://www.uscis.gov/working-united-states/temporary-workers/e-2-treaty-investors (accesses 01 March 2016)

https://www.uscis.gov/working-united-states/temporary-workers/e-2-treaty-investors

https://www.uscis.gov/working-united-states/temporary-workers/e-2-treaty-investors


V1: 18th April 2016 257

area/area

where

unemployment

rate is 150%

the national

average rate)

enterprise in

"designated

regional

centers"

commercial

enterprise

in

"designated

regional

centers" in

a TEA

between the

US and the

treaty country;

■ Trade provides

income for

maintenance

Source: OECD (2010), “Open for Business: Migrant Entrepreneurship in OECD Countries”, OECD

Publishing

Unlike some other countries’ comparable visas, none of the above require the applicants to submit a

business plan (or indeed have any criteria related to a business plan). There are no restrictions

regarding the age of the applicant or any language requirement.

H-1B visa

H-1B visa season starts on April 1st of every year. To benefit from a H1B visa, the foreign national must hold a higher education degree (or its equivalent) and be sponsored by a US employer. The employer must establish the wage and compare it to the prevailing wage that is determined by the State Workforce Agencies by completing a special form which asks the employer for the responsibilities, duties, skills and experience needed for the job. The actual wage is then determined by comparing other workers’ wages in the same positions with the same level of experience. After this is done the employer must then submit a Labor Condition Application (LCA) to the Department of Labor agreeing to pay the determined wage. Once the LCA is approved and certified, the employer must post the notice in two conspicuous places in their business and may then file for the visa petition with the immigration authorities.

There is no labour market test under H-1B visa category what the Department of Labor requires is that employers asking for a H-1B visa certifies in a Labor Condition Application that (1) they will meet the wage requirement; (2) that the admission of the temporary foreign worker will not affect the outcome of a labour dispute; and (3) that the employer gives public notice at the place of employment about their wish to hire a H-1B worker. The Department of Labor has no other role than to check that the LCA is complete and that those three requirements are met.

Support schemes

There is no support scheme in the United States, as understood of providing cash or in-kind incentives

to potential entrepreneurs (such as in France or Chile – see corresponding Country Fiche). However,

given the strong entrepreneurial culture in the United States and the long-standing history of

incubators796 and business accelerators, it is worth examining the case of the United States in more

detail. The Unites States has a highly favourable entrepreneurial environment among the G20

countries (ranked the first)797. It is a country “where the entrepreneurial spirit flourishes and the

entrepreneurship culture is considered as a component of the country’s DNA”798. Moreover, attitudes

towards the business failure was considered positive (30%). It also scored high (65%) in terms of

people’s willingness of considering the entrepreneurship as a career path799. The entrepreneurship

ecosystem is facilitated via a wide-ranging support, flexible labour markets and strong government

support800.

Business incubation programs are designed to accelerate the successful development of

entrepreneurial companies through an array of business support resources and services. Start-up

796 The first business incubation programs opened in Batavia, N.Y., in 1959, (Source: U.S Department of Commerce (2011), “Incubation: Best practices that leads to successful new ventures”) 797 The EY G20 Entrepreneurship Barometer 2013 – United States available at: http://www.ey.com/Publication/vwLUAssets/EY-G20-country-report-2013-US/$FILE/EY-G20-country-report-2013-US.pdf 798 Ibid 799 Op. cit EY G20 Entrepreneurship Barometer 2013, page 7. 800 Ibid




V1: 18th April 2016 258

accelerators focus on moving technology-based firms rapidly from establishment to early stage

venture funding and growth. The number of incubation programmes has increased significantly. As of

October 2006, approximately 1,400 business incubators operated in North America, including 1,115 in

the U.S. Approximately 7,000 incubation programs were in operation around the world as of 2011.801

In the United States, Blue-chip companies also provide support and funding to startup incubators or

have acted as founders. For example, Microsoft Ventures runs seven accelerators.802

Data shows that U.S incubators and venture capital firms have provided services to a substantial

number of foreign entrepreneurs. The US National Business Incubation Association803 (an association

aimed at providing information, education, advocacy and networking to the process of assisting early-

stage companies) serves more than 2,100 members in over 60 nations. While incubator managers

and developers make up a large share of NBIA’s membership base, the association also represents

other interested individuals and groups. Approximately 25 percent of the NBIA membership is from

outside the United States. A 2011 National Foundation for American Policy (NFAP) study of founding

and management teams at the Top 50 venture-backed companies in the United States, as ranked by

VentureSource, found that immigrants started nearly half of America’ s 50 top venture-funded

companies and are key members of management or product development teams. In more than 75 %

of those companies 25 % of the publicly traded companies created between 1990 and 2005 that had

received. 10 venture backing also had immigrant founders.804


EB-5 and E-1 and E-2 visas

According to the USCIS website the application process is as follows for EB5 visas:

9. File Form I-526, Petition by Alien Entrepreneur (to USCIS)

10. Upon approval of Form I-526 petition, either:

– File Form I-485, Application to Register Permanent Residence or Adjust Status, with USCIS to

adjust status to a conditional permanent resident within the United States; or

– File DS-230 or DS-260, Application for Immigrant Visa and Alien Registration, with the U.S.

Department of State to obtain an EB-5 visa for admission to the United States.

The approval of the I-485 application or the entry into the United States with an EB-5 immigrant visa,

grants a conditional permanent residence for a two-year period for the EB-5 investor and his/her

derivative family members.805

Approval of the I-526 can take between 1 month to a year, according to various sources; while

typically it used to take 4-6 months, more recently (since 2012) it is closer to a year.806 Getting an I-

485 approved takes another 3-6 months.807

801 U.S Department of Commerce (2011), “Incubation: Best practices that leads to successful new ventures” 802 https://www.microsoftventures.com/ 803 http://www2.nbia.org/ 804 The Immigrant exodus’ The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent Paperback – October 2, 2012 by Vivek Wadhwa (Author), Alex Salkever (Contributor) 805 USCIS, “EB-5 Immigrant Investor Process” available at https://www.uscis.gov/working-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-immigrant-investor-process (accessed 23 February 2016) 806 Anthony Olson P.A. “How long does it take to get the money out of the EB-5 investment?” available at: http://www.immigrationvisausa.com/Immigration_Law_Blog/2013/March/How_long_does_it_take_to_get_the_money_out_of_th.aspx (accessed 23 February 16); Zhang & Associates P.C. “Frequently Asked Questions about EB-5” available at: http://www.hooyou.com/eb-5/faq.html (accessed 23 February 2016); EB-5 Center, “How long does the entire EB-5 processing take before I can obtain permanent resident status?” available at: http://www.eb-5center.com/node/486 (accessed 23 February 2016) 807 EB-5 Center, “How long does the entire EB-5 processing take before I can obtain permanent resident status?” available at: http://www.eb-5center.com/node/486 (accessed 23 February 2016)

https://www.microsoftventures.com/

http://www2.nbia.org/

http://www.amazon.com/s/ref=dp_byline_sr_book_1?ie=UTF8&text=Vivek+Wadhwa&search-alias=books&field-author=Vivek+Wadhwa&sort=relevancerank

http://www.amazon.com/s/ref=dp_byline_sr_book_2?ie=UTF8&text=Alex+Salkever&search-alias=books&field-author=Alex+Salkever&sort=relevancerank

https://www.uscis.gov/working-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-immigrant-investor-process

https://www.uscis.gov/working-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-immigrant-investor-process

http://www.immigrationvisausa.com/Immigration_Law_Blog/2013/March/How_long_does_it_take_to_get_the_money_out_of_th.aspx

http://www.immigrationvisausa.com/Immigration_Law_Blog/2013/March/How_long_does_it_take_to_get_the_money_out_of_th.aspx

http://www.hooyou.com/eb-5/faq.html

http://www.eb-5center.com/node/486




V1: 18th April 2016 259

One may apply for an E-1 or an E-2 visa from either inside or outside the US by submitting a Form I-

129.808 These are filed at the California Service Centre or Vermont Service Centre.809 The application

is normally processed within 2 months or 15 calendar days upon paying a premium processing fee of

USD 1,225.810

Table A13.4 Permits of self-employed/entrepreneurs visas in the US

Permits/programme EB-5 residence visa






Initial 2-year conditional permanent resident status ("green

card"); for the conditions on residency to be removed

must file a second application within the 90-day period

preceding the second anniversary of admission as

conditional permanent resident

Temporary: 2 years, renewable

indefinitely

Withdrawal Failure to respect initial conditions, job-creation

commitments and deadlines within two years; no job-

creation

Permanent

residence

After 2 years, conditions on permanent status removed No (Non-immigrant visa)


Publishing

H-1B Once the LCA is accepted by the Department of Labor, the employer is able to submit a completed

‘Form I-129’ or Petition for a Non-immigrant Worker – which is the application form for the temporary

visa for the qualified worker - to USCIS. This form includes fields on the job offer. Once the Form I-129

petition has been approved, the prospective H-1B worker who is outside the United States may apply

with the U.S. Department of State (DOS) at a U.S. embassy or consulate.


EB-5 and E-1 and E-2 visas The table below summarises the rights granted for the families under the self-employed/entrepreneur

visas in the US:

808 USCIS, “E-1 Treaty Traders” available at: https://www.uscis.gov/working-united-states/temporary-workers/e-1-treaty-traders (accessed 23 February 2016) 809 USCIS, “Direct Filing Addresses for Form I-129, Petition for Nonimmigrant Worker” available at: https://www.uscis.gov/i-129-addresses (accessed 23 February 2016) 810 Zhang & Associates P.C. “Frequently Asked Questions about E Visas” available at: http://www.hooyou.com/e-visa/faq.html (accessed 23 February 2016)



https://www.uscis.gov/i-129-addresses


V1: 18th April 2016 260

Table A13.5 Family members’ rights linked to self-employed/entrepreneurs visas in the US

Rights/programme EB-5 residence visa






Permit With principal applicant Yes, accompanying the

principal applicant.

Work and study

rights

Yes (after the 2-year conditional period) Spouses may apply for

employment authorisation.


Publishing

Rights in the U.S. is similar to those in major non-EU countries targeted by innovative entrepreneurs;

the family members of the immigrant entrepreneur or investor have access to the labour market and

education system.811

H-1B In terms of rights granted to the H1B holder, upon dismissal, they are immediately considered as

illegally present in the U.S., unless an application for another temporary visa is currently pending.


EB 5 visas are hugely popular; in 2015 the US reached the maximum (the number that can be issued

as part of the program in a year is capped at 10 000) for the second time in a row. This success is

largely driven by demand from China. In 2014, Chinese nationals received 90% of EB-5 visas issued.

This tendency is rather recent; 10 years back (in 2004) Chinese nationals only accounted for 13% of

the EB 5 visas issued.812 Also the total numbers were much lower; “In 2009 approximately 100 people

received EB-5 visas (three quarters of whom were already in the United States and adjusted status).

Similarly, under the pilot scheme for investment in “designated regional centers” in 2009 there were

about 1 200 incoming entrepreneurs under these targeted programmes which is still a considerable

advance from 230 in 2007.”813

Table A13.6 Key statistics Please specify the reference years of the table below

Statistics EB 5 (2014)

Permits issued under the scheme 10,692

811 OECD (2010), “Open for Business: Migrant Entrepreneurship in OECD Countries”, OECD Publishing p. 74. 812 CNN Money, “U.S. runs out of investor visas again as Chinese flood program” available at: http://money.cnn.com/2015/04/15/news/economy/china-us-visa-eb5-immigrant-investor/ (accessed 23 February 2016) 813 OECD (2010), “Open for Business: Migrant Entrepreneurship in OECD Countries”, OECD Publishing p. 70.

http://money.cnn.com/2015/04/15/news/economy/china-us-visa-eb5-immigrant-investor/


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Statistics EB 5 (2014)

Disaggregated by host countries (top 10)

Mainland China, South Korea, Taivan,

Vietnam, Iran, Russia, India, Mexico, Nigeria,

Japan814

H1-B program was created in 1965 as a means to allow US employers to temporarily hire foreign

workers with specialty skills. It was modified in 1990 to add an annual cap and a labour attestation

requirement. This requirement mandates the employer to pay either the prevailing or the actual wage

for a given skill set (whichever is higher). The prevailing wage is determined by the US Department of

Labour. H1-Bs are issued for 3 years with the option of extension for another 3 years. Maximum terms

is 3 years but if the worker has filed for a green card before the 6th year and certain conditions are met,

then the H-1B can be extended for 1 year or 3 years at a time until the green card is granted. In

practice, many workers for entre on H-1B visas spend more than a decade waiting for permanent

resident status. H-1B workers who are born in India and China face the longest queues.

In 1991, more than 50,000 H-1B visas were issued. In 1999, - the number exceeded 100,000. From

2001-2003m 195,000 were issued. In 2004, the cap was dropped to 65,000 with addition 20,000 for

foreign students completing advanced degrees. Institutions of higher education are exempt from the

cap. Demand has vastly exceeded supply. In 2008, when the cap was 65,000 there were 404,907

application filed with 129m 464 visa issued.

Evaluation of the schemes

There is abundance of data which points out that foreign-born entrepreneurs have a significant role in

the entrepreneurship and innovation. From 1995 to 2005, more than 25% of all technology and

engineering companies in the US had one or more immigrant founders.815 More than half (52.4 %) of

Silicon Valley startups had one or more immigrants as a key founder, compared with the California

average of 38.8 %.This represented an increase from 24% to 28% despite the pie getting bigger with

far more tech starups. Nationwide 25.3 % of all engineering and technology companies established in

the United States between 1995 and 2005 had at least one immigrant founder. The pool of immigrant-

founded companies nationwide generated more than $52 billion in sales in 2005 and created 450,000

jobs.816

With regard to international patents, for the past 60 years, the United States has dominated global

patent filings. International patent applications filed by noncitizen immigrants increased from 7.3% in

1998 to 24.2% in 2006. Among foreign-born patent holders, those from China made up the largest

group, Indian nationals were second; followed by Canadians and British. With regard to US patents,

the share of the total US patens grants to foreigners has nearly triples from 18% in 1964 to 51% in

2011 – revers trend to 27.4$ in 2010.

EB-5 visa

There is no ideal data for calculating the performance of the EB 5 as a job generator; investors are

only required to report that they have met the requisite threshold of 10 jobs but not the exact amount

of jobs created. Still, based on the minimum requirements, it is estimated that, the program created

85,500 direct full-time jobs and attracted approximately $5 billion in direct investments since its

inception (with nearly half of this figure accruing since just 2010). The USD 5 billion number is rather

small in compared to the USD 204 billion, which the U.S. attracts in foreign direct investment annually,

however it makes a substantial difference for local projects and therefore communities. 817

814 EB 5 Investors, “2014 EB-5 Statistics” Available at http://www.eb5investors.com/blog/state-department-publishes-fy2014-eb5-statistics-immigrant-origin (accessed 23 February 2016) 815 The Immigrant exodus’ The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent Paperback – October 2, 2012 by Vivek Wadhwa (Author), Alex Salkever (Contributor) 816 Ibid 817 Audrey Singer, Camille Galdes, “Improving the EB-5 Investor Visa Program: International Financing for U.S.

http://www.eb5investors.com/blog/state-department-publishes-fy2014-eb5-statistics-immigrant-origin

http://www.eb5investors.com/blog/state-department-publishes-fy2014-eb5-statistics-immigrant-origin




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There are however suggestions that the success of attracting startups may not be attributed to the

visa system: “visa is not the 'pull factor', it is an enabler for aspiring entrepreneurs (…) Bright people

are attracted where there is a critical mass of other bright people. As an example the US are attracting

people regardless of their visa policy. The US often attract students, they become entrepreneurs and

change their status.”818

The EB 5 program battles a poor reputation, largely due to high-profile cases of fraud at regional centers.819 There seem to be some inherent flaws in the design of the system. Regional centers and their affiliates (such as lawyers and immigrant recruiters) are interested in their own profits therefore they have an incentive to emphasize the benefits of the program and tone down the risks. The Federal Government historically did not pay much oversight besides approving regional centers and the business plans of individual projects. Asymmetric information combined with conflicting interests led to several frauds. The largest case thus far was perhaps Interbank, whose owners were found guilty of a variety of money-laundering and fraud charges. After the case the program was temporarily suspended and the official guidelines for EB-5 projects were re-designed. The administrative uncertainty in this period led to a steep decline in program participation from 1998 to 2003. The issues with the system do not seem to have been fixed. There has been more recent examples of fraud:

■ In February 2013, a regional centre owner in Chicago attempted to defraud over 250 investors of

investments worth more than $150 million.

■ In March of 2012, a New Orleans regional centre misused funds that were to be used to build

restaurants and hotels in an effort to revitalize the New Orleans economy after Hurricane Katrina.

■ In October 2013, a Texas couple with stole funds from foreign investors under the guise of the EB-

5 program.”820

E-1 and E-2

E-1 and E-2 visas are targeted to specific nationalities which have trade agreements with the United

States and who have ‘substantial’ capital. No statistics on the number of vE-1 and E-2 visas have

been found through the desk research. In addition, no evaluation of the schemes has been found. The

main requirements to obtain the visa are to be a national of a list of countries which have signed

agreement as well as to show ‘substantial capital’. There is no specific cash threshold defined, but

$40,000 is probably an absolute minimum, and any investment below $100,000 would need a very

strong case to support it.821 Examples of types of enterprises that constitute trade under E visa

provisions include international banking, insurance, transportation, tourism and communications.822

H-1B Given the competitive nature of business and the globalization of markets in finance, technology, services and manufacturing, access to high-skilled talent has never been more vital. Unfortunately, the United States of America, dubbed “A Nation of Immigrants” by President John F. Kennedy, has

Regional Economic Development” available at: http://www.brookings.edu/~/media/research/files/reports/2014/02/05-eb5/eb5_report.pdf (accessed 23 February 2016) p. 9-10. 818 DG RTD (2015), “Report of the Meeting on a Support Scheme for Non-Eu Entrepreneurial Innovators” p. 6. 819 Audrey Singer, Camille Galdes, “Improving the EB-5 Investor Visa Program: International Financing for U.S.

Regional Economic Development” available at: http://www.brookings.edu/~/media/research/files/reports/2014/02/05-eb5/eb5_report.pdf (accessed 23 February 2016) p. 2. 820 Audrey Singer, Camille Galdes, “Improving the EB-5 Investor Visa Program: International Financing for U.S.

Regional Economic Development” available at: http://www.brookings.edu/~/media/research/files/reports/2014/02/05-eb5/eb5_report.pdf (accessed 23 February 2016) P. 11. 821 http://www.workpermit.com/us/investor_e1_e2.htm 822 https://travel.state.gov/content/visas/en/employment/treaty.html




http://www.workpermit.com/us/investor_e1_e2.htm

https://travel.state.gov/content/visas/en/employment/treaty.html


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developed immigration policies that make it difficult both for businesses — and the talented individuals they seek to employ — to thrive.

America has a litany of immigration problems that affect economic competition:

■ The supply of H-1B visas for high-skilled foreign nationals has been exhausted every year for

more than a decade due to low annual quotas, which prevent employers from hiring individuals

that can help them grow and innovate inside the United States.

■ Long waits for employment-based green cards — six to 10 years or longer for many high-skilled

immigrants — discourage outstanding individuals, including international students who have

graduated from U.S. universities, from building successful careers in America.

■ High denial rates for intracompany transferees, something not witnessed by employers in other

advanced economies, make completing projects and building product and service teams more

difficult in the United States.

■ The lack of legal visas for year-round, lower-skilled workers prevents employers from accessing a

critical workforce.

■ The absence of a true entrepreneur visa encourages foreigners with great ideas and access to

venture capital to pursue startup opportunities in other nations.

■ Policymakers in Washington, D.C., should remove the many obstacles that prevent U.S.

companies from attracting talented individuals from around the world.

There is also some controversy surrounding H-1B visas: advocates for the employee rights of US-born

technology workers have claimed that these types of visas are used as another form of outsourcing by

Indian and US tech companies to import cheap labour. Critics blame H-1Bs to depressed wages for

US-born workers in technical fields. Concerns of fraud and violation – 21% of H1B emerged from

improper applications.823

References

■ Anthony Olson P.A. “How long does it take to get the money out of the EB-5 investment?”

available at:

http://www.immigrationvisausa.com/Immigration_Law_Blog/2013/March/How_long_does_it_take_t

o_get_the_money_out_of_th.aspx (accessed 23 February 16)

■ Audrey Singer, Camille Galdes, “Improving the EB-5 Investor Visa Program: International

Financing for U.S. Regional Economic Development” available at:

http://www.brookings.edu/~/media/research/files/reports/2014/02/05-eb5/eb5_report.pdf (accessed

23 February 2016)

■ CNN Money, “U.S. runs out of investor visas again as Chinese flood program” available at:

http://money.cnn.com/2015/04/15/news/economy/china-us-visa-eb5-immigrant-investor/ (accessed

23 February 2016)

■ DG RTD (2015), “Report of the Meeting on a Support Scheme for Non-Eu Entrepreneurial

Innovators”

■ EB 5 Investors, “2014 EB-5 Statistics” Available at http://www.eb5investors.com/blog/state-

department-publishes-fy2014-eb5-statistics-immigrant-origin (accessed 23 February 2016)

■ EB-5 Center, “How long does the entire EB-5 processing take before I can obtain permanent

resident status?” available at: http://www.eb-5center.com/node/486 (accessed 23 February 2016)

■ Homeland security homepage available at: http://www.dhs.gov/index.shtm (accessed 23

February 2016)

823 The Immigrant exodus’ The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent Paperback – October 2, 2012 by Vivek Wadhwa (Author), Alex Salkever (Contributor)

http://www.dhs.gov/index.shtm




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■ International Student, “F1 Student Visa” available at:

http://www.internationalstudent.com/immigration/f1-student-visa/ (accessed 23 February 2016)

■ The Immigrant exodus’ The Immigrant Exodus: Why America Is Losing the Global Race to

Capture Entrepreneurial Talent Paperback – October 2, 2012 by Vivek Wadhwa (Author), Alex

Salkever (Contributor)

■ Migreat (2015), “Worldwide start up visa compared” P. 9.

■ OECD (2010), “Open for Business: Migrant Entrepreneurship in OECD Countries”, OECD

Publishing

■ USCIS, “B-1 Temporary Business Visitor” http://www.uscis.gov/working-united-states/temporary-

visitors-business/b-1-temporary-business-visitor (accessed 23 February 2016)

■ USCIS, “Direct Filing Addresses for Form I-129, Petition for Nonimmigrant Worker” available at:

https://www.uscis.gov/i-129-addresses (accessed 23 February 2016)

■ USCIS, “E-1 Treaty Traders” available at: https://www.uscis.gov/working-united-states/temporary-

workers/e-1-treaty-traders (accessed 23 February 2016)

■ USCIS, “EB-5 Immigrant Investor Process” available at https://www.uscis.gov/working-united-

states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-immigrant-

investor-process (accessed 23 February 2016)

■ USCIS, “EB-5 Immigrant Investor Program” available at: http://www.uscis.gov/eb-5 (accessed 23

February 2016)

■ USCIS, “Entrepreneur Visa Guide” available at: http://www.uscis.gov/eir/visa-guide/entrepreneur-

visa-guide (accessed 23 February 2016)

■ Zhang & Associates P.C. “Frequently Asked Questions about E Visas” available at:

http://www.hooyou.com/e-visa/faq.html (accessed 23 February 2016)

■ Zhang & Associates P.C. “Frequently Asked Questions about EB-5” available at:

http://www.hooyou.com/eb-5/faq.html (accessed 23 February 2016)




http://www.uscis.gov/eb-5

