This post isn’t about why you should live somewhere new in the world, it’s about how. If you’re not convinced on the why, the contents of what I’m going to share from my own experience will be merely academic.
Instead, this post is for entrepeneurs who have the burning desire to taste the world but don’t know where to start.
I’m going to talk about visas – the single biggest hurdle you’ll face in relocating.
Sure, if you are an EU citizen and want to move within the EU or a Kiwi moving to Australia, you don’t have the issue so this post is academic. But this advice is aimed at those who don’t have that luxury.
No matter what your lawyer says, it ain’t easy getting a visa if you’re an entrepreneur
Overview of Entrepreneur Visas
If you are a skilled worker, things are a lot easier (e.g. a nurse, diesel mechanic or radiologist). But I’m none of these. I tend to fail skilled visa tests because I have no skills of transferable worth. For entrepreneurs like me you have to think out the box. But that’s what we’re good at doing, so getting a visa is merely another challenge in this game called life.
Most countries have visas available for entrepreneurs but they require a degree of investment. Some are low, unspecified even. Others require $100,000s all the way up to $millions.
I secured an investment visa to New Zealand on the basis of establishing a business there. Let me tell you, it’s not easy. You not only have to deliver a business plan (which entrepreneur actually enjoys writing these things – ugh?!) you have to take medical and background checks. It takes time and money. In all you’re looking at a minimum admin cost of $12,000 to get the visa. Then you have to invest your money etc. etc. Bear in mind, these costs are on top of your moving costs.
How does Immigration Assess Your Case?
Generally speaking, entrepreneur visas consider the efficacy of the business plan on the following criteria:
- Your experience – have you run businesses before?
- The benefit of the business to the local economy – an IT consultancy is much more attractive than a B&B or taxi firm
- How many local people you will employ in future years
- The amount of capital you are going to invest
Generally speaking (again), immigration will fail your case for the following reason
- It’s a fish’n'chips restaurant
- You have never run a business before
- You’re too old
- It doesn’t look legit (i.e. it’s obvious you’re doing it just for the visa)
- You don’t have enough capital to invest
- You aren’t going to employ enough people
- Something sketchy in your background
- An unknown reason (only really applies to the USA)
Entrepreneur Visas: The Catch
The real catch with entrepreneur visas is the follow up. It’s often easier to get the visa than it is to renew them. Horror stories abound of entrepreneurs who set up their businesses only to be refused a renewal in subsequent years. You’ve ploughed all that money into the business, set up your life in a new country and are then given 90 days to get out. It happens.
The other catch is the employment issue. Many entrepreneur visas carry a requirement that you must employ X number of locals. Now this can be a real showstopper. Those locals can’t be family nor can they be ringers on contract. You have to submit to the dreaded payroll and that means local employment laws which will inevitably trap business owners into lengthy and unwanted terms that can drag you down.
Every visa applications contains an unnecessary amount of paperwork. The game isn’t about submitting a great proposal but a proposal that isn’t bad. You see, the powers that be aren’t looking for excellent business ideas they’re simply looking for ideas that check all the boxes. That’s why you need to employ visa lawyers.
The USA, for example, has horrendous visa laws following the implementation of the Patriot Act. As usual, those that could make a difference to the economy are penalized whereas illegal immigrants seem to arrive by the truckload. Hiring a lawyer will cost you around $10,000 and up and that’s without any guarantee of success. If your visa application is denied (and they increasingly are here in the US), you need to employ a lawyer to appeal. That’s another $5,000 off the bat.
You see, visa lawyers make money if they win you the visa but they make more money if they don’t. Think about it.
Entrepreneurs Visas by Country
Here is very basic overview of a selection of countries and their entrepreneur visa programs:
Perhaps the toughest of all. You’re looking at a minimum investment of $750K US and the nightmare of employing multiple locals. This is a real showstopper on all accounts because the money invested has to be spent as opposed to simply available for investment.
New Zealand & Canada
Similar to above but the figures are lower, varying from $200K to $300K US. Unlike Australia, there are lower employment requisites and the money only has to be transferred to the business account opposed to invested. Needless to say, for entrepreneurs this offers flexibility.
Dubai was historically obscure to the entrepreneur. You could only establish a company if you had a local partner which meant the obvious open door to exploitation and corruption. Most entrepreneurs won’t have a partner locally so would have had to turn to an accountant or lawyer offering his services as a hired gun. Today, however, there are options. Dubai has set up numerous free trade zones that allow entrepreneurs to set up a company and employ themselves. The requirements vary according to which zone they set up in (e.g. an internet company has a much lower entry level than a media one).
Chile is an interesting player and appears to be proactively sourcing entrepreneurs to come and startup in their country. Not only are they being proactive about it they are offering to reimburse a % of your startup costs. If you are looking to live in South America, this is a very exciting option. The administration process appears, on paper at least, refreshing – involving features such as a video pitch, which perhaps demonstrates it’s being run by entrepreneurs as opposed to bean counters.
Singapore has 2 routes for the entrepreneur. The Entrepass which has relatively low levels of capital spending but high levels of local employment requisite of the Employment Pass. You can set up your own company and employ yourself as a senior manager under the Employment Pass but this appears to be a loophole immigration are tightening. Even though many Singapore visa lawyers are offering the Incorporation + Employment Pass option as a package, see my point about visa lawyers above.
Reflecting the entrepreneurial nature of the country, Hong Kong appears to be welcoming. This is reflected in the fact that they consider applications on a case by case basis and do not stipulate capital and employment requirements that will hobble an entrepreneur. The flipside of this is, of course, a lack of clarity. The process of incorporation followed by employment through own company appears possible as in Singapore. I suspect that HK is a lot easier, cheaper and clearer to deal with than, say, the US, New Zealand or Australia but that conjecture is based purely on speculation as opposed to first hand experience.
While USA immigration requirements for entrepreneurs are relatively low, they are unfeasibly subjective. There are no guidelines and immigration are becoming renowned for rejecting applications on a whim. This basically means you could spend $10k and a few months of time & hassle applying for a visa only to find it rejected for reasons beyond your control. The issue isn’t as much as the obscurity of the immigration selection process but the distinct lack of clarity in which option suits the entrepreneur best. In my discussions with immigration lawyers I’ve found that none agree on the best visa route (I’ve been recommended the E-1, E-2 and L-1 visas.) Very few lawyers appear to want to commit to a particular course until you’ve paid an upfront consultation fee of around $200. Even when you’ve paid up, you’ll still find that lawyers themselves don’t know because they are offered very little guidance from immigration authorities.
Malaysia has an interesting option – the MM2H (Malaysia My 2nd Home) which caters for expats who want to live in Malaysia but don’t necessarily want to start a business. Rather than start a business you are granted a visa on the basis of transferring a capital sum into the country. The catch is that you have to keep a minimum balance in the bank in order to retain your visa.
Notes on other countries. I haven’t included the EU as well as a bunch of other countries. The above is based on our own line of enquiry. We’ve engaged immigration lawyers, paid the fees and had needles stuck in our arms to do the medicals. It’s an intensive process so it’s unlikely I can offer generic advice to countries I have little experience of. I’m sure others can and to some extent, the questions below regarding considerations would apply.
If you are serious about application here are a few questions to consider:
- Does my visa apply to my dependents? In many cases it will but in some it won’t. If you take the Entrepass visa in Singapore, you’ll only cover your dependentsifyour business employs a specific number of people and spends the required amount. That means it’s quite possible you can renew your visa but your dependents aren’t covered if, for example, your sales fall or things don’t work out so well. You may be confident of your current situation but it’s an awkward rod for your own back that perhaps clouds your future security with a high degree of uncertainty.
- What are the conditions for renewal? Few business visas offer residence. Many require assessment every year or two years. Again, for the reasons above, this is an awkward scenario. Rules change. Businesses change. Entrepreneurs can and do get deported when their business doesn’t work out.
- Does the visa offer residence? The downside of any entrepreneur’s life is uncertainty. It’s the price we pay. What you don’t want, however, is the constant specter of never being able to call your host country your home. In many cases, visas offer a pathway to residence (if you’ve lived 5 years for example). But, in some they don’t. The E-1 and E-2 visas in the USA, for example, allow you to live in the country but you’ll never get a green card. That means your business needs to keep performing indefinitely else you will be deported. There are cases where the children of successful E visa business owners have to leave their adoptive countries when they reach 21 as the visa runs out when they reach this age.
- What are the tax considerations? You can see my thoughts on tax and why it’s important to get this right. In most cases, you will pay tax as the locals. However, this is a thorny issue. To qualify for a visa you may have to be seen to be taking a salary as opposed to dividends which itself unpacks a whole set of tax implications that entrepreneurs don’t like. That means the financial advantages of running your own business may be negated by the need to be salaried, and therefore taxed heavily.
- Will my visa lawyer offer a no-win no-fee? They exist and I’d advise taking them where possible. A lawyer must be pretty confident of his or her own skills to offer this to a prospective client. Not only that, your lawyers must be confident in your own proposition. If the lawyer still gets paid even if they take on a lousy case it offers you no honesty. A no-win-no-fee lawyer is going to be honest with you and turn your case down before you fill out any forms because it’s a loss to them. The other type of lawyer will happily take you on because success rates aren’t accounted for anywhere and, as I’ve discussed already, lousy cases mean appeals, re-application and so on.
- What happens if I change my mind? This is particularly relevant to us and a lesson learned the hard way. The lower the entry cost in time and money to any country, the easier it is to make the right decision if you want to change your mind down the line. But, what happens if you’ve invested $20,000 in lawyer fees and you, for whatever reason, decide that this place isn’t for you? Not easy. Of course, you’re not going to change your mind at time of application but you always need to factor this in to your reckoning. Things happen. Life changes. If you have plenty sunk into the move, you end up making the wrong decision. I know of 2 expats who moved out to Australia and wanted to change their mind but it was too late, they had sunk too much money into the move setting up the business. That means they were damned if they stayed and damned if they returned. It’s a lose-lose for them. Fortunately for us we hadn’t made any capital investments yet, we simply lost the upfront fees (not that was in any way a cakewalk.) But we lost a lot less than we would have done if we had paid for an office, hired employees, bought equipment etc. If I had known this up front, it would have influenced our decision process. Countries that have tough requirements for entrepreneurs (namely US, Australia, New Zealand) should not be dealt with lightly.