Why it´s time for a “G20 Entrepreneur Visa Program”
As every entrepreneur knows, the struggles to set up and establish a business are manifold: getting funding, dealing with legal and administrative hurdles and reaching customers in a world that focusses on platforms are among them. But one issue stands out — mobility. Expanding a business in a foreign country and recruiting talent abroad can be not only stressful, but is often a nightmare. Not surprisingly, according to the US Small Business Administration only about 1.5% of the companies go international — and among them about 60& export in only one country.
On top of that, a lot of the world´s economies are facing slowing growth rates and rising levels of unemployment. Young people are particular affected in this regard. On the contrary, studies have shown that entrepreneurs account for more than 80% of job creation in many of the world´s economies. In addition, young entrepreneurs hire more young people than average companies and — according to research done by the G20 Young Entrepreneurs´ Alliance (G20 YEA) — young entrepreneurs highlighted that if it was easier for them to go international, they would create significantly more jobs.
Of course not all businesses can become international. But the digital economy and its new trade platforms open possibilities of reaching customers in foreign countries even to very small businesses. Many business models are changing and can easily become more global or can be adapted to be conducted globally. That´s why the G20 YEA believes that helping (young) entrepreneurs to become more international is a significant part of the solution to youth unemployment.
So what does it need? Simple: motivate entrepreneurs to grow their business internationally by a coordinated effort among the G20, embracing a simple, clear and uniform process. At the G20 YEA, we call this coordinated effort “Entrepreneur Visa Program”.
If we take a closer look, the general benefits for countries that support foreign entrepreneur in their country are telling:
· First, foreign entrepreneurs have a direct positive impact on the number of new businesses and jobs created (in Ireland for example, 20 entrepreneurs that were granted visas created 220 jobs and 6 million of investments between April 2012 and March 2014).
· Second, it is an efficient and faster way to integrate migrants and ensure they contribute to the local economy (they have to pay taxes and have to learn the business rules of a country).
· Finally, visa policies that aim to attract startups and (young) entrepreneurs send a strong signal to the world that this country is inviting foreigners. In addition, they make a country more visible and attractive to wealthy investors and successful entrepreneurs (with the Startup Chile Program, during the first five years after implementation for example the country raised over 100 million Dollars in private capital and brought more than 2000 entrepreneurs to the country).
The idea of the G20 YEA for the “Entrepreneur Visa Program” is based on the same principles as the “Working Holiday Visa”, a kind of visa that is already in place in many countries, among them Argentina, Australia, Canada, France, Germany, Indonesia, Italy, Japan, Korea, Mexico, the United Kingdom and the USA: a similar and easy process with mobility benefits, strong administrative simplification on topics relevant to young entrepreneurs and with a strong support for entrepreneurship.
· The “Entrepreneur Visa” should be implemented for up to two years, during which the young entrepreneur and their families can conduct their business in foreign countries. It should be a multi-entry visa with a two-year maximum length of stay. To limit abuses, certain criteria can be put in place to select relevant candidates. However, these criteria should be coordinated among the G20 and should support entrepreneurs and not prevent them from applying for the Entrepreneur Visa.
· The processes to get the Entrepreneur Visa should be simple, as simple as the Working Holiday Visa — the goal is to reduce the “cost to try” (cost is money, but also — and maybe more importantly — time). The reason is easily comprehensible: resources, time and knowledge are limited for young entrepreneurs. The ideal situation for them would be to be able to try to do business in another country as if it was their own country, for a certain period of time. This period of time would allow them to validate their interest to develop their businesses in another country and would give them the time to comply with the rules of the country they want to do business in. Therefore, the Entrepreneur Visa should give access and allow entrepreneurs to conduct their business in foreign countries without having to register a company in the respective country, during the period of the Entrepreneur Visa Program. However, if they need a company for their business, they should be able to set up and register a limited liability company online, with little costs and no institutions involved and with very little or no minimum capital (up to a certain amount of turnover — if such threshold is reached the company must be transformed in a “regular company” in the respective country). Administrative tasks like registering a residency or filing tax declaration should be simple, easy and — if possible — feasibly online and compliance costs should be kept low (for example by simplifying existing laws and regulations for entrepreneurs in the Entrepreneur Visa Program) to reduce the regulatory burden on entrepreneurs.
· Entrepreneurs should concentrate on what they know and do best: focus on their business. Therefore, a key part of the Entrepreneur Visa Program is creating support for entrepreneurs to foster entrepreneurship in their country. As research has shown over and over again, a strong tool for helping (young) entrepreneurs is mentoring. As part of the Entrepreneur Visa Program, entrepreneurs should be given access to international mentorship. Mentorship programs can be organized in collaboration with government organisations, incubation centers, universities and private organisations and should aim on helping entrepreneurs build their networks, get practical recommendations, easier access to finance, etc. to make it easier for them to build a strong business while reducing the time to do so and helping them avoid making costly (again: with regards to money AND time) mistakes.
When thinking about how to strengthen the economy in one country, foster entrepreneurship and create job opportunities, the message from the G20 Young Entrepreneurs´ Alliance is clear: embrace the “Entrepreneur Visa Program”! Countries should invite entrepreneurs to start businesses in their countries and make it as easy for them as possible. A coordinated initiative on the G20 level would make doing business in the biggest economies in the world much more easy and would be be a strong signal to the world that supporting entrepreneurs is paying off. Just a little thought game: what if the rate of companies that go abroad rise only slightly from the before mentioned 1.5% to 2% — wouldn´t that already offer the possibility to create millions of new jobs?
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Carsten Lexa is the President of the G20 Young Entrepreneurs´ Alliance (G20 YEA) Germany and since June 2017 the Chairman of the Steering Committee of the G20 YEA International (www.g20yea.com). A corporate lawyer by profession and equipped with his own law firm (link to the law firm website), he advises international clients, who want to do business in Germany, in corporate and commercial legal matters. He is, by invitation of the European Commission, a participant in the annual SME Assembly. He is also a member of the B20 Task Forces and since 2014 a member of the national board of JCI Germany (WJD — Wirtschaftsjunioren Deutschland), the biggest organization for young leaders and entrepreneurs in Germany.
