Start-Up Visa Programs for Entrepreneurs Need Reform to Live up to Their Hype and Become Vital Tools for Economic Growth

WASHINGTON — Start-ups have been at the center of rapid technological developments that have transformed business models, industries and economies. Yet while immigrants feature prominently in the start-up success story, employment-based immigration channels in many countries are often ill-suited pathways for these entrepreneurs, who tend to be relatively young and inexperienced—and thus unlikely to be in employers’ sights or meet the criteria of points-based immigrant selection systems.

Moreover, traditional investor, self-employment and talent visa programs often are not a good fit or are unattainable for start‑up founders because of high investment thresholds, a focus on immediate economic returns or prioritization of professional and academic experience over harder-to-measure entrepreneurial potential. While some countries, most recently Japan, the Philippines and United Kingdom, have launched start-up visas to address this gap, these programs have had mixed results.

A new report from the Migration Policy Institute’s Transatlantic Council on Migration, Start-Up Visas: A Passport for Innovation and Growth?, assesses the experience of these programs in Europe, the Asia Pacific and beyond, and offers thoughts on how policymakers can make them more effective, chiefly by embedding them within broader innovation strategies.

Start-up visas are just one piece of the puzzle in promoting entrepreneurship and economic growth, with business and tax rules, location of industry clusters and potential market size among other considerations. “With more and more countries jumping on the start-up-visa bandwagon, to be competitive, these schemes need to be complemented by broader innovation policies and programs, such as incubators/accelerators, networking events and investment incentives,” writes author Liam Patuzzi, an MPI Europe policy analyst.

The report offers considerations for policymakers as they seek to create or revise start-up visa programs. Among them:

• Context matters. Countries with less developed entrepreneurial environments may find a comprehensive package of incentives is necessary to lure entrepreneurs, while those with established international reputations for innovation can focus on softening some immigration barriers.
• Tackle gender-related obstacles to participation. Countries interested in attracting the best and the brightest would be well advised to identify and remove barriers—such as the male-dominated nature of networks in the venture capital world—that may result in relatively few women successfully applying for start-up visas.
• Allow (fast) failure. Permitting visa holders to depart from the original business idea cited in their visa application lowers the risk of entrepreneurial dead ends, by not tying them to unprofitable activities for fear of losing their visa.

“Amid the mistrust of immigration that has grown in many destination countries in recent years, start‑up visas send a hopeful message: openness to the movement of people and circulation of ideas is the key to future progress and prosperity,” the report concludes. “But a lot of learning and fine-tuning will be necessary if these visas are to deliver on their promises.”

The report is the fifth in a Transatlantic Council series focused on ways in which countries can build migration systems for a new age of economic competitiveness. The series will conclude next week with the publication of a Council Statement that examines the trends reshaping labor markets and makes recommendations for how governments can “future proof” their immigration systems and attract, select and retain the right workers to meet labor market needs and help their future economies thrive.

Read the start-up visa report here: www.migrationpolicy.org/research/start-visas-innovation-growth.

Find the series here: www.migrationpolicy.org/programs/transatlantic-council-migration/building-migration-systems-competitiveness.

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The Migration Policy Institute (MPI) is an independent, non-partisan, non-profit think tank in Washington, DC dedicated to analysis of the movement of people worldwide. MPI provides analysis, development and evaluation of migration and refugee policies at local, national and international levels. MPI’s Transatlantic Council on Migration is a unique deliberative body that examines vital policy issues and informs migration policymaking processes across the Atlantic community.