The Tier 1 Entrepreneur Visa is the main legal door for entrepreneurs from around the world to start a business to the UK.
It aims to offer a red carpet for global entrepreneurs to build a business and spark innovation and growth in the British economy.
Although the scheme has seen a great take up, the UK home Office has recently started tightening the screws due to alleged abuses. This situation translated into an increase in applicant scrutiny leading to a refusal rate growing up to 50% – (Home Office, Immigration statistics quarterly release 2013).
But how can an entrepreneur prove that his enterprise is genuine? How is the credibility of a business plan assessed? What are documents should be presented? In other words, what is a successful application according to the Home Office?
These are few of the questions we asked our immigration expert during our last webinar:
France wants to attract foreign entrepreneurs and startups.
Foreign entrepreneurs granted the new French Entrepreneur visa (also called French Tech Ticket) will be provided with a grant of12,500Euros which will be exempted of income tax and social taxation (CSG-CRDS) – as agreed by the French Parliament in the amendment of a law on international investment.
The French Gov and the city of Paris launched the French Tech Ticket visa this year to promote its startup eco-system worldwide. This financial incentive aims to attract and support foreign entrepreneurs starting innovative companies in France.
The French Tech Ticket acts as a comprehensive “Welcome Pack” for foreign entrepreneurs. Successful applicants will benefit from a fast track visa process to obtain a work visa and receive – on top of a grant of 12,500Euros per founder (maximum 3 people) – an office space in a partner startup incubator, support on settling down and discounts on Air France flights.
The grant of 12.500Euros is renewable after 6 months if the project shows traction. Next year, the French Tech Ticket should be extended to the whole country incubators. For now, the French Tech Ticket works only with foreign entrepreneurs wanting to relocate in Paris.
Making Economic Sense
This measure to exempt the grant of taxes comes as natural as the 12,500Euros are granted by the French Government through the BPI. Indeed, a taxation on a government subsidy would not make much sense.
In the report published on Thursday the 29th of October, the government’s immigration experts have called for an overhaul of the visa system for entrepreneurs after finding substantial evidence of low-quality businesses established by applicants previously granted the visa.
The MAC advised that there should be a more thought-out process for the immigration of foreign entrepreneurs and suggested two main reforms
The selection process should involve industry experts rather than case workers. It could be done by appointing a panel of experts with expertise in early-stage entrepreneurship, such as angel investors or venture capitalists; recruiting specialist immigration officers qualified to review business plans; working with other government departments such as UKTI or BIS; or outsourcing the assessment of business plans to a professional services firm.
The minimum amount and source of money should include business angels. In particular, the Home Office could work with UKTI and the UK Business Angels Association (UKBAA) to explore the feasibility of approving selected angel investor networks or syndicates (like accelerator programmes) to provide third party endorsement.
Migreat is delighted to see its recommendations reflected in the MAC report and strongly believes that these recommendations will make a difference for many talented applicants who have been rejected for issues as minor as improperly filling out forms. It is great news in particular for foreign entrepreneurs with limited access to capital and for early stage startups.
Launched this May, the French Startup Visa is for non-French entrepreneurs who have an idea for creating or expanding a startup. During the call for proposals, which ended on 15 September, 722 startup projects were submitted, for a total of 1,372 applicants and 5,677 expressions of interest from over 90 countries.
It is a definite confirmation for Axelle Lemaire, Minister of State for Digital Affairs, that France has grown a strong “international appeal” she says and “for this fantastic startup momentum to continue” she adds “we now need to work with entrepreneurs from around the world and (…) later [expand the French Startup Visa programme] to other French Tech Metropoles throughout France.”
Paris, growing hub for international startups Buoyed by the success of forerunners such as Criteo, Withings, and Sigfox, the recent news of $200 raised by Blablacar, the acquisition of Leetchi, the plans for Deezer to go public, and with the support of the French government, which launched the French Tech initiative, French startup have reached cruising speed in recent years!
Paris is a world leader in the innovation economy: “Number one city in the world for innovation and intellectual capital” and “third most appealing city for foreign investment”.
The fifty winners of the first edition of Paris French Tech Ticket will be announced in December. Starting in January 2016, they will be welcomed into a dozen support structures and partner incubators.
Upcoming stages in the selection process: 1- By the end of September: a pre-selection process will choose 500 eligible projects, in order of submission
2- October: the 500 projects will be reviewed by a panel of experts. Seventy of them will be selected, and Skype interviews with the applicants will take place between 2 and 6 November
3- End of November: following the interview phase, the list of finalists and runners-up will be
4- January 2016: the 50 winning French Tech Ticket entrepreneurs will arrive in Paris
A new call for proposals will be launched early in 2016.
With so many governments launching start-up visa schemes this year, it makes us wonder whether the US or the EU will be first to start a comprehensive multi-state (in the EU case, multi-country) level.
Start-up Visas programs spreading like mushrooms
So far in 2015 Denmark, France and the Netherlands have already launched national programs to attract foreign entrepreneurs to start companies. Their visa schemes have a few things in common, not the least of which is to offer fast-track and specific processes to foreign entrepreneurs – with special guidance from local incubators to navigate the system. Denmark and France have put quotas in place. The Netherlands (wisely) has not.
In total, 7 countries in Europe have created start-up visa schemes, two that are outside of the Schengen area (Ireland & the UK).
Meanwhile, a national non-profit was launched to help implement a fix to the US start-up visa process in places beyond Massachusetts and Colorado (where the program has already been launched). The Global Entrepreneur in Residence Program enables talented graduates to be sponsored by a US university and gain relevant part-time work experience while allowing them to work on their start-up.
Local & national schemes
All of these local initiatives have emerged due to the deadlock around immigration reforms presented at the US federal or EU level. As well as out of frustration from bureaucratic visa rules leaving talented migrants with no options other than leaving the country they are living in. These initiatives may be limited in their scope, however, they are growing in numbers and popularity. This is leading to other countries, like Israel and Germany, considering the implementation of similar programs.
Both Brussels and Washington are discussing ways to navigate and understand how start-up visa policies can benefit their respective economies and fit their long term objectives. Adeo Ressi, CEO of the Founder Institute, spoke with Forbes about White House representatives visiting Palo Alto in January and the strong desire from President Barack Obama to sign an executive order this year. Migreat has spoken at meetings in Brussels with several representative of the EU commission that is exploring ways to introduce a start-up visa directive that would fit in the 2020 EU agenda.
These programs could well provide the spark for the US and/or the EU to launch programs that attract talent, create jobs and foster innovation on a larger scale. The question that remains is whether the EU or the US will be first get started?
With the 2016 presidential election already ramping up in the US and the sensitivity around immigration in Europe, it is our bet that the US will be first; which means that for Europe to gain an advantage, the EU will need to create a better deal for foreign entrepreneurs than the US.
France launched on wednesday a Startup Visa called the French Tech Ticket – a full package for entrepreneurs from all over the world willing to set up their startup in Paris.
What’s the programme?
The Programme targets entrepreneurs who may or may not already have a business in France, and who are, for example, completing their education and looking to create a startup. Teams must comprise one to three founding members, and a maximum of one French person per team.
The program provides
Funding of €12,500 for 6 months, renewable so to give a year funding of a EUR 25K total to each team member.
Free space in a partner incubator. What you find in spaces as such is access to training session, dedicated network and mentors to support a start-up growth.
FrenchTech event access
A Help Desk to provide assistance with red tape; and god knows how it can be useful in France.
On top of things – and so so french: you get lower prices on Air France flights, a Gold loyalty card and advertising for the startup via Air France!
So what are you waiting for to apply? And who should apply?
Any entrepreneur with a scalable or innovative idea is welcomed in the programme – with a team of three people maximum and willing to give Paris incubator a try for six to a year.
Applications opened in June online with a questionnaire and a video pitch to submit. They close by end of September when a videoconference with selected applicants will be interviewed to develop the idea of the project. The final selection will be made by a committee comprising members of the French Tech Initiative, the Paris City Council, Bpifrance, Business France, the Directorate General for Enterprise (DGE), partner incubators and leading personalities of the tech & entrepreneurship scene.
France eco-system has grown over the years to be a significant player on the world map of start-up eco-systems: there are over 40 business incubators, 80 co-working spaces, 20 fab labs, and close to 1,500 startups being set up annually. It has made itself famous thanks to the success stories of Critéo, Blablacar and Sarenza. A 33,000m2 incubator space, la Halle Freyssinet will open in November this year in the centre of Paris.
Taking a closer look at what is keeping global entrepreneurs from fully accessing the UK’s thriving startup scene, and what we can do to change this.
This morning, Emerge, the UK’s leading education accelerator program for startups, hosted its final demo day – an occasion for their cohort of innovative startups to showcase initial results and progress to potential investors.
Since its inaugural class in 2010, Emerge has not only grown quickly a network of entrepreneurs and investors in the education space in the UK, but also a solid reputation to attract innovative entrepreneurs. Out of the 136 startups applications for the last program, almost half were coming from outside the European Union (US 27%, India 6%, China 3%, Canada 3%). A similar ratio regarding the nationalities of applicants is found at other leading accelerators like StartupBootcamp or Collider.
The visa wall
And this has been a growing paradoxical problem for accelerators: as their programs become more and more popular worldwide, they receive numerous applications from entrepreneurs outside the EU, for which UK visa rules are nothing but easy to comply by for these kind of innovative startups.
Last year Collider had to drop last minute a selected team from Pakistan because they could not comply with the strict rules in time. Emerge reports much visa hassle and stress with founders from non-EU countries. Already, two of their non-EU startup have decided to return to their home country after the program as they do not qualify for the entrepreneur visa yet. Similar stories can be heard from other accelerators with which Migreat works.
For non-EU nationals, successfully navigating the entire application and selection process at an accelerator does not guarantee that you will gain entry to the UK – because non-EU migrant needs a visa. Worse, since the current entrepreneur visa was not designed with technology startups in mind, once accepted, visas are only to be temporary and have no guarantee of renewal. In 2014, one out of two entrepreneurs failed the renewal of their entrepreneur visa. Working for a simpler and more flexible immigration system
This highlight the limits of UK’s bureaucratic immigration system: a system that is thought with in mind a tick the box mentality of what Government think is an entrepreneur and startup.
They help give a voice to issues faced by entrepreneurial migrants within the UK’s economy – and help solve them. The UK Government is also listening – the Migration Advisory Committee is currently calling for evidence of the economic impact of the entrepreneur visa route. The solutions ahead
There is a quick solution to this growing issue of recruitment of global entrepreneurs in the UK.
Currently there are five accelerators on the list of UKTI that have a competitive advantage: they can fast track the applications for entrepreneurs accepted into their programs. Better, entrepreneurs accepted at those accelerators benefit from a rebate; instead of having to apply for the visa showing demonstrating £200K in a UK bank account, they “only” need to show £50K – which makes much more sense for early stage and internet startups. It would help a little if more serious accelerators where on the list.
This being said, the goal of the UK startup community should be to ensure that not only the entrepreneurs and startup accepted at accelerator can take advantage of a fast tracked visa process. The goal is to make it fair for every entrepreneur that wants to build a successful business in the UK to be able to do so without the visa-hassle. It would significantly help if a few tweaks regarding the visa process were rethought with the help of foreign entrepreneurs and the startup community itself.
Migreat.com published a report on this exact issue in 2014. It discussed the four main issues of the visa process, taken directly from the experience of 60 global entrepreneurs, and suggested four ways that these problems could be tackled right away.
Call to action
Migreat supports the immigration of the best and brightest entrepreneurs to the UK and has started to work beyond – at a European level – to help immigration of the ones that will create jobs, wealth and businesses.
If you’re a global entrepreneur looking to start a company in the UK or Europe or that has started a company in the UK or in the EU, simply join our linkedin group to receive the latest news on visa and immigration policies for entrepreneurs and startups.
This way, when Governments or the EU Commission approaches Migreat to advise reforms of their immigration system, we will be able to provide suggestions of entrepreneurs who have ideas on how to do so!
Following a call made out last January by the European Commission’s Directorate General for Migration and Home Affairs, Migreat received an invitation to take part in a temporary expert group set up to discuss economic migration to Europe and how to attract highly skilled talents.
The Expert group will discuss economic migration issues with the view to contribute to the elaboration of a new European policy on legal migration and a review of the Blue Card Directive.
There is a real need for the EU blue card to perform its full potential of becoming the equivalent of the US green card. The EU is suffering from specific skills shortages and needs to become a more open and attractive destination for talented workers who would consider migrating elsewhere.
The expert group meets for the first time in Brussels this March 2015 to discuss the opportunities and limitations of the EU Blue card in attracting the best and brightest talents.
As a practitioner and expert on the migration of entrepreneurs, Migreat was chosen to leadon the questions that cover visa schemes for graduate students, entrepreneurs and start-up visas.
Migreat will be able to share fresh insights thanks to data gathered with its online visa wizard app helping thousands of economic migrants navigate the European visa system daily.
“Migreat receives daily request from foreign entrepreneurs and highly skilled migrants to Europe. It is our mission to make sure these international talents are assisted by top immigration lawyers whereby they don’t get turned away by the bureaucracy of the visa system.” says Tara, Business Development Manager.
From the look of it, this announcement seems to point 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”. It will allow startup founders to enter the U.S provided they show they can create jobs and revenue from their venture.
In 2012, the administration allowed entrepreneurs to use this [provision] if they could prove job creation and revenue generation or attracting investment. However, there was not enough guidance provided for this and as a result, utilization was low. Now, under executive action, guidance is expected.
This announcement did no go into the details. As such, Obama’s speech could lead to the creation of a complete new visa for entrepreneurs, similar to the “startup visa” silicon valley entrepreneurs have been lobbying for since 2009. A Startup Visa wouldcreate a visa category for foreign entrepreneurs who have raised capital from qualified American investors. From the startup visa act draft, such visa would be a temporary work visa. It would be tied to investment thresholds as well as job & revenue creation targets to meet.
Craig Montuori joined on the phone by Migreat to comment on Obama’s announcement, suggested that a startup visa would likely take a year to be implemented.
It would be a preferred option for Entrepreneur visa for the US on the long term: “what would make a startup visa work and be a success relies on fast processing, predictability and it to be easily repeatable. In other words, if a clear Entrepreneur category is created in the immigration system, it create a clear legal status for entrepreneurs to trust and a law to point at to if any trouble. This is what is lacking at the moment with the current system.”
[This blog post has been updated after the launch of an Italian startup visa last June 2014 – for more info read our newest blog post on the Italian Startup visa Eligibility criteria]
A similar program to the Chilean startup visa could emerge from Italy in the next months.
Mattia Corbetta, consultant at the Ministry of Economic Development
Mattia Corbetta, consultant at the Ministry of Economic Development and member of the Minister’s Technical Secretariat, discussed the topic of a startup visa in his interview with ‘La Fonderia dei Talenty’ (The Talent’s Forge) last month. He talked about the Development Decree 2.0, the government initiative to sustain innovative enterprises, and announces the italian government is planning a specific visa for entrepreneurs and startups:
In a month we’ll introduce the Italian Startup Visa, with a simplified procedure for the extra EU entrepreneur or startupper that would like to found their enterprise in Italy.
The Ministry for Economic Development will be in charge of granting the visa: the request will reach them through the internet, the enterprises will be put in different categories corresponding to innovative or interesting sectors for the Italian Economy and an expert committee will assess the business plan. The Italian Ministry want to make the process acts as a fast track to the visa for entrepreneurs: the application process should last no more than 4 weeks.
The granting of the temporary visa will composed of two stages: a first 12 months will be given to the entrepreneur and its startup to set up the business. After the 12 months, the entrepreneur will have to show the effective creation of the company and, in that case, the visa will be automatically renewed for 3 years.
All the disposition about the Italian Startup Visa are part of a plan including tax breaks aimed to lower registration costs for innovative startups. Among the main fields promoted for the foreign innovation companies are considered: high tech, digital information, artisanal and industrial products, and services for R&D and agriculture.