Immigration policy suggestions for our economic recovery
South Africa and greater Africa’s economic outlook is fragile, and the South African government is intending to review legislation around hiring foreign workers post Covid-19. If South Africa follows the examples of Mauritius, UAE and Portugal together with a list of other countries globally, immigration can contribute significantly to economic growth.
It is vital that South Africa positions itself as a desired destination to attract skilled workers, entrepreneurs and qualified artisans.
Compared to other African countries, South Africa has well-defined and modern immigration legislation. We have three different kind of work visas, one specifically catering for highly skilled individuals. We have provisions for retirees, volunteers and cover life partners. We offer permanent residence not only to the financially independent, but also to foreign students graduating in South Africa. The validity of work visas compare favourably with all African countries. Our 4 to 5 year duration is considerably longer then the two year average in most African countries and is in line with international best practice. Our Constitution is modern, and our immigration legislation offers options to life partners and does not discriminate against homosexuals.
Which changes would make a real difference? I have based my suggestions on countless client discussions, as well as international best practices.
The present legislation permits foreigners who wish to start or purchase a business in South African to obtain a Business Visa. There are two core criteria: 60% of all employees must be local and the foreigner should invest at least 5 million Rand from abroad into the business. If this threshold is lowered to around 1,5 million Rand (under USD 100 000) in particular sectors, significantly more opportunities for foreign investment would arise. In comparison Kenya and Singapore are requiring 100.000 USD, whilst the UAE and Namibia require around 2 million Rand only.
France recently introduced this visa and it is generally regarded as a huge success, boosting the start-up scene in Paris. South Africa would 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 might not fall into the ‘Critical skills IT’ category. We have an established incubator landscape.
Residence by Investment
Most South Africans know these schemes from countries such as Cyprus, Portugal, Greece, Malta, USA and others. The principle is simple: The foreigner invests a certain amount of money into pre-approved investment funds or other asset classes, and is rewarded with long-term residence.
South Africa currently grants permanent residence to foreigners whose worldwide assets exceed 12 million Rand. No investment is required and processing time is over 2 years which is very long and far outside any international benchmark. A potential improvement would be to guarantee processing of the permanent residence in under 10 months, and a demand that 100 to 150.000 EUR must be invested into pre-determined financial instruments.
Long term visitor visa
Barbados and UAE introduced a one-year visitor’s visa, which allows visitors to stay uninterrupted and continue to work for their overseas employer provided they have in minimum salary threshold. With our tourism industry suffering and with a high amount of uncertainty as to when international tourists will return, it is time to take bold steps to attract high spending visitors to our shores. This may require a change in tax legislation but will have zero negative impact on local employment and attract wealthy long-term visitors who can bring their families and spend their foreign income in South Africa. The DHA could charge a high fee of around 2.000 EUR for such visa to generate revenue.
By implementing these measures, South Africa will open itself up to a multitude of investment opportunities.
An article courtesy of
Andreas Krensel – Managing Owner at IBN Immigration Solutions
– Cape Town –