What new ideas should be incorporated, which international practices could work best in the African context and ultimately make South Africa a more attractive investment destination?
Compared to most African countries, South Africa has well-defined immigration legislations. We have 3 different kind of work visa, one specifically catering to the highly skilled, provisions for retirees, volunteers and even those that cover life partnerships. We offer permanent residence not just to the financially independent, but also to foreign students graduating in South Africa in certain subjects.
Comparatively, the validity of work visa is favourable to other African countries. Our 4 to 5 year duration is up to standard with international practices, as it is considerably longer than the average 2 year validity in most other African countries. Our extremely liberal constitution does not discriminate against sexual orientation and thus our immigration legislation supports and offers options of life partnerships for couples in a homosexual relationship.
In recent months immigration has come to the forefront in the press as it has become a topic of interest and part of the agenda of our newly elected president. There seems to be a shift towards realizing that migration has not only negative consequences but could contribute positively to economic growth.
An open immigration system should be South Africa’s core interest in the near future. The fundamental growth of our economy should be dependant on attracting in skilled foreigners. We already have a head start on other African countries when it comes to legislation but new policies should extend this lead further. Of course, we would have to significantly improve our implementation results in order to be an attractive immigration destination and not just for our policies.
Currently we are facing a major increase in emigration. While the current situation might be caused predominantly by the local political and economic environment, developed markets like Europe and Japan are in the midst of an ageing population, their long term needs are clear: these economies are looking for a younger labour force. The prospect of better opportunities abroad are very appealing and emigration will continue to be a long term trend that affects all African countries across the continent, if not most countries worldwide, as they will be a big provider for this labour. Our economies are already facing a shortage of skilled workers and we will ultimately continue to loose this talent in the future.
Planned immigration is an effective way to provide the economy with talent and therefore enable growth. It is not a coincidence that Australia is experiencing nearly 20 years of uninterrupted economic growth. While there are many factors which contribute to this growth, experts agree that Australia’s inward migration contributes significantly to its upward development.
Therefore, it is in the vital interest of South Africa to position itself as a desired destination which attracts skilled workers, entrepreneurs and qualified artisans sooner rather than later. It will take years to get the administration full proof and subsequently gain a positive reputation internationally. We cannot afford to loose this time and our current policy review should take the above into consideration.
What would impactful policies look like? Which changes would make a real difference? In the following I will provide answers to the above and in addition also suggest quick changes to the current practices which should yield a high impact.
The business visa is applicable for all foreigners who wish to start or purchase and work in their own business in South Africa. It should not be confused with a visas for purely business purposes. The core criteria are: 60% of all employees must be local and the foreigner should invest at least 5 million Rand from abroad into the book value of the business. It can be interpreted that the foreigner themselves is required to provide this funding. For business in certain sectors this threshold can be lowered. This would apply to the wider IT sector as for think start-ups it is paramount that they are supported by third party funding and thus policy would accommodate it. Seed funding and VC funding is normal and should be allowed. South Africa has established a decent start-up environment, but Nigeria and Kenya are closing in. Third party funding in terms of the business visa would be one important step to being more attractive to outside investors.
We should also look at the 5 million Rand threshold as compared to other countries this is a high expectation. For instance, Kenya and Singapore only require 100.000 USD (1.4 million Rand) while the UAE and Namibia require only 2 million Rand.
France has recently introduced such visa and it is generally regarded as a huge success to boost up the start-up scene in Paris. South Africa should firmly establish itself as the African start up location ahead of Kenya and Nigeria. The Tech visa would accommodate entrepreneurs wishing to start their own business as well as individuals who wish to work for a company in the Tech sector but do not fall into the Critical skills IT category. We already have an established incubator landscape and thus start-up would have to be registered with an accredited incubator. Individuals would have to work for registered companies in order to qualify for such a tech visa. It would also be worth it to consider extending such a tech visa to foreigners who have at least 5 years of relevant work experience in the tech sector who wish to work freelance in South Africa for a limited period of 2 years. This would enable digital nomads to work and live in South Africa for a limited period and the start-up ecosystem would gain valuable international expertise.
RIGHT OF WORK FOR FOREIGN SPOUSES OF ICT AND CSV VISA HOLDERS:
Often the success of an international assignment is not decided on whether or not the assignee is feeling at home in South Africa but rather if his or her spouse are feeling the same. International studies prove that granting a foreign spouse the right to work is a vital positive distinguishing factor. In most cases both spouses are highly educated and, in our experience, a high percentage of foreign spouses would love to be able to work here.
I suggest limiting such a right to spouses of Intra Company Transfer visa holders or Critical Skills Visa holders only. It would be ideal to offer such a right automatically for the spouse without the need to apply for a specific work visa. However, in South Africa’s current system there is no work visa which is not tied to a specific employer (the one exception being one of the Critical Skills visas categories, however it is only valid for 1 year). If one does not want to break this policy, then I posit that we use a practice that is already in place which requires only an offer of employment but no labor market testing. This is currently being done with spouses or life partners of South African citizens or permanent residence holders (Section 11(6)).
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by Andreas Krensel