Startup and Entrepreneur Visas: Governmental Aspirations and Industry Practice
Startup/entrepreneur visas have been a topic of intense discussion in recent weeks. Select investment migration firms decided to focus on startup visas (SUVs) rather than Residency by Investment (RIP) visas as they seem lucrative and beneficial for both migration businesses and governments. That said, startup visas are by no means a revelation. The trend has been developing since early 2010s as a bunch of advanced economies launched startup programmes to attract talent.
Some experts believe that SUVs may at some point replace RIPs. Is this so? Let’s look in more detail.
What’s the rationale behind opening a startup programme? Since the 2008 slump, many Western countries found themselves in stagnation. In an attempt to resuscitate the economy, governments raised the flag of innovation and enticed new businesses in the tech sector to set up shop on their shores. Has it worked out well?
It’s hard to tell exactly since only a few governments unveiled their startup visa stats. From what we know, SUVs still lack demand as an immigration route. Now, there are 22 startup programmes running globally with around 1,500 applications approved in 2018. Roughly 16 percent of these visas were granted by Canada.
Nothing to write home about - given the tough competition between multiple entrepreneur routes offered by the same destinations. SUVs imply a ramified multi-step procedure that immigration companies can hardly scale up. Assessing every particular startup, its viability and business potential is way beyond the scope of immigration advisors.
The existing model of attaining startup visas is of little financial interest to the migration industry. The demand is still below average whereas each client might cause a load of low-margin, yet complex work.
That said, matching the interests of governments and HNWIs might be possible. In a comprehensive model, foreign investors would support local startups. With new investment under the belt, local budgets may afford financing innovative businesses. For instance, the US EB-5 programme enrolls foreign candidates who are aware that their funds may be ultimately placed in a risky burgeoning venture. The Australian authorities offers applicants to take their chances investing in a mix of low to ultra high risk assets.
The EB-5 programme proved the scenario viable, yet startups present much more risk than an average EB-5 regional centre project.
All in all, today’s startup visas are too complicated, low-demand and short of rising stars to make a sizeable industry footprint.
Astons is a leading global immigration advisory firm with offices in London, Beijing, Moscow, Dubai and Limassol (Republic of Cyprus) and offers residency & citizenship investment solutions worldwide including UK, Turkey, Vanuatu, EU & the Caribbean. Astons is a Member of the Investment Migration Council (IMC).
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