Hong Kong: Rethinking Business Immigration: The Rise Of Innovation Visas

Start-up Visas for Innovators

Since their inception in the 1980's, business immigration programs have been characterized by the concept of passive investment, i.e. individuals being allowed to acquire permanent or temporary residency in exchange of an investment to be managed by third parties¹ (financial institutions, project managers) or through real estate investment². The central tenet of such programs has been to attract talents from all over the world with the goals of developing new businesses, bring their connections and ultimately create jobs.

Lately, numerous countries have put in place programs requiring "active investment", such as the start-up visa program, attracting entrepreneurs with "innovative" business ideas, the goal being to help the country competiveness at the "Age of the Machine".

Positive bias is observed for technology-focused companies with products having the potential to be globally scalable, in the fields of artificial intelligence, IoT, biotechnology, pharmaceutical, etc. While "innovation" could be loosely defined as "bringing a solution to a problem", some programs will provide definitions, some general, some specific. For instance, while the Canadians look for "new or significantly improved products or process and doing business differently"³, the Italians specify that the enterprise must present "high technological value"⁴.

Most programs are open to accept idea-stage or early-stage companies, without proven traction; some will even exclude companies of a certain age, while setting aside job creation, revenue benchmark or minimum investment requirements.

Emphasis is put on the entrepreneur's profile (ideally highly educated with past business development experience) and the innovation brought by the idea. The entrepreneur can form a team with other start-up applicants in order to leverage the skills of the group and improve the chance of success of the project. This way, multiple residency visas can be issued for a single innovative idea.

Industry Experts as Assessors

Conscious of the higher risk of failure of such ventures, governments usually harness the expertise of private organizations (venture capital funds, investors, business incubators / accelerators or private foundations) to assess the project feasibility. These third-parties "filter" the business proposals and decide which one will get their support. These actors are playing an important role in the applicant selection, by being designated by governments to do so, and the business acceleration, by providing service of accompanying the entrepreneurs during the early development of their companies.

Start-up Visa: A Growing Global Phenomenon

In recent years, countries - not all traditionally known for their immigration policies - have adopted programmes to attract entrepreneurs willing to develop their early-stage and innovative companies overseas. This group of immigrants are usually not eligible to other immigration programs, such as investor programs (high investment threshold), skilled migration (linked to an employment offer) or exceptional talents (usually restricted to very high achievers)

Twenty-five countries and counting, from the Americas to Asia, have formally put in place immigration programs aimed at attracting the founders of innovative start-ups. While most programs will only grant temporary residency, some will allow the applicant to convert their status into a permanent one after a certain period and under certain conditions[5].

It is reasonable to expect the number of start-up visa programs to grow in the coming the future as an increasing number of countries are transitioning towards a tertiary economy requiring constant innovation to remain competitive.

Footnotes

1. Australia Investor / Significant Investor / Premium Investor Stream (subclasses 188 and 888), Canada - Quebec Immigrant Investor Program (QIIP), USA Employment-based 5th Preference Program (EB-5), Ireland Immigrant Investor Program (IIIP), Latvia Residence Permit for Person Investing in Bonds (Latvia RBI Bonds), New Zealand Investor Residence Program (NZIP), Panama Permanent Residence Program (PPRP), United Kingdom Tier 1 Investor Visa Program (UKT1)

2. Cyprus - Residency by Investment Program (Cyprus Residence by Investment Permit), Greece Golden Visa Program (Residence Permit for property owner), Latvia Residence Permit for Real Estate Owner (Latvia RBI Real Estate), Malaysia My Second Home (MMH), Malta Residency by Investment Program (Malta Residency), Portugal Golden Visa Program (PGVP), Spain Golden Visa Program (SGVP).

3. https://www.canada.ca/en/immigration-refugees-citizenship/corporate/reports-statistics/evaluations/start-visa-pilot.html

4. Executive Summary of the new Italian legislation on innovative startups

5. Canada seems to be the exception in grant direct permanent residency status to its successful start-up visa applicants.

Originally published October 27th 2020

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