President Jacob Zuma's state of the nation address reaffirmed the South African government's commitment to growing the economy threefold to create 11 million jobs by 2030. To achieve this, should the country be considering a start-up visa similar to the ones being mooted in the US and about to launch in Canada?
The US model is an attempt to hold on to foreign graduates in order to retain their knowledge, experience, business ideas and even fledgling start-ups. It would also encourage foreign students of STEM (science, technology, engineering and maths) to stay in the country with student visas, followed by residency, then citizenship. Two previous attempts to set up a start-up visa in the US have failed, so the jury is out on whether this version will succeed.
The conditions for this visa include investing the equivalent of R2.5 million of foreign currency into a new or existing business.
Canada's approach - which is being piloted over the next five years - has some interesting nuances. This is the first country in the world to offer immediate permanent residence to entrepreneurs, recognising that few start-ups succeed first time out the gates. Likewise, another of the conditions is just one year of tertiary education to avoid missing out on the future Mark Zuckerbergs and other famous dropouts.
In SA, according to immigration and visa consultants Global Visas, entrepreneurs can apply for 24-month business visas - with the option to extend - that can ultimately lead to a permanent residency permit. However, if the business doesn't perform, the visa may be revoked.
The conditions for this visa include investing the equivalent of R2.5 million of foreign currency into a new or existing business - this amount may be reduced for certain categories of business, including IT and communications. The business must also create five job opportunities in five years. Other preconditions must be met, including demonstrating the export potential of the company.
Andy Volk, VP of apps and developer relations at Mxit, and mentor at 88 MPH Umbono, took a different route to enter SA with the exceptional skills work permit. With a career working for start-ups in Silicon Valley, he was able to gain the three-year work permit quickly and easily. He's concerned that the exceptional work permit programme is said to be ending, as SA will miss out on 'people with entrepreneurial skills who can help unlock the entrepreneurial potential of South Africans, both in the local economy and in terms of the global market'.
The South African government's aim is to grow the economy to create 11 million jobs by 2030.
Alexandra Fraser, chairman of the Silicon Cape Initiative, which aims to improve the environment in the Western Cape to create more and better start-ups, points to the Startup Chile model as something from which SA can learn. Startup Chile, a programme to encourage early-stage entrepreneurs to bootstrap their start-ups in the country, places as much emphasis on the entrepreneur's network back home and the global viability of the start-up as it does on the idea itself. This is to drive foreign income as well as local jobs, and to ensure strong ties back to Chile if the entrepreneur does leave Chile.
Back in SA, while the business visa could be argued to tick the box as a 'start-up' visa, it doesn't appear to have been set up with an entrepreneurial ecosystem in mind. What also seems to be missing is a concerted drive to communicate this to international entrepreneurs to attract them to SA.
First published in the April 2013 issue of ITWeb Brainstorm magazine.
Share