Despite recent strides, it’s generally accepted that Europe’s entrepreneurs have a long way to go before they can compete on equal footing with Silicon Valley’s founders. However, the US has been gradually losing foreign entrepreneurs to other countries.
In this regard, Europe would set itself apart by implementing a Europe-wide Startup Visa scheme for founders.
An overarching European Startup Visa scheme would create the necessary synergies to make up for the fragmentation found between competing national schemes and could propel Europe forward as the new Mecca for global entrepreneurs.
Now is the time.
After spending the last three years studying the different schemes that have been proposed worldwide, meeting with officials behind each of Europe’s local startup visa programmes and looking at recent research studies, I have come to the conclusion that a European Startup Visa would be a real opportunity for Europe to boost its economy and be part of the future.
Below are five reasons why we believe there is much more to be gained than to lose.
It wouldn’t take much work to enact a EU visa and it's just about time
Ireland started its program for foreign entrepreneurs in 2010, and a bulk of other leading Schengen countries, Spain (2013), Italy (2014), the Netherlands (2015), Denmark (2015) and France (2015) have joined in the last two years.
In total, 7 countries in Europe (including the UK) and 14 overall in the world have adopted an official startup visa policy, and this is without including the smaller countries that have changed their immigration laws to be more friendly to investors and entrepreneurs like Estonia with its e-residency scheme, Lithuania with its new rules for highly skilled foreigners.
This demonstrates that the concept of a startup visa is growing roots. It is generally understood by national governments as a direct way to influence job creation, foreign direct investment levels and boost innovation.
For the EU, which just unveiled its Digital Market Strategy and is currently reviewing its economic migration policies for highly skilled foreigners in the EU, an EU Startup Visa scheme perfectly fits in the measure the commission is about to take.
The US is losing global entrepreneurs due to immigration bureaucracy
The US continues to be attractive to global entrepreneurs though it has become more and more challenging to get a visa to start there and this could be Europe’s luck, transforming it into one of the first destinations global entrepreneurs want to go.
Stories of successful entrepreneurs being rejected by the US immigration bureaucracy are multiplying. Flipkart (raised $700 million; valued at $15 billion) and Snapdeal (valued at $5 billion) are both examples of companies started by foreign engineers who quit America —because of U.S. immigration policies and instead started abroad, back in their home country, as it proved easier.
These global entrepreneurs could have come to start in Europe. The EU is the biggest market in the world. It represents a market of 503,000,000 consumers. The EU offers a high quality and modern education system graduating almost the same amount of students each year than the US - for less money.
Highly skilled talent is cheaper in the EU, compared to the US. The EU counts amongst its members some of the most powerful and economically developed countries in the world. The EU just launched a digital market strategy and a capital market union.
Unfortunately, foreign startups can’t enter this single market yet, because of the lack of EU immigration rules on entrepreneurs. So instead, global entrepreneurs choose to go back and start home.
These facts show two things.
First, that Europe can strike a balance if it was to make it easier to procure visas for global entrepreneurs rejected by the US.
Second, as speed and ease of starting a business is becoming an essential feature sought after by global entrepreneurs, the EU can offer to be an attractive alternative for them if it makes it easy and visible that it has the building blocks needed to start companies (low costs of registration, fair taxes, availability of talent and capital).
The UK is (also) losing talented engineers and entrepreneurs due to tough immigration rules
Global entrepreneurs have traditionally been attracted to London as a great place from which to access other European markets and benefit from European talents.
This is changing as the UK is changing its immigration system and is about to renegotiate its membership with the EU.
A European Startup visa would be a timely way to encourage and provide a framework for foreign entrepreneurs to think about other places in Europe to start a business besides the UK – which is not part of the Schengen agreement.
The toughening of UK immigration rules in recent years have resulted in making it difficult for foreign entrepreneurs without initial capital and talented people to stay in the UK. For entrepreneurs, they need to prove access to £200,000 to stay legally in the country. For international students, they need to be in the right university to be endorsed a UK graduate Entrepreneur visa - or else find a job in 3 months after graduation.
In 2013, seven out of ten entrepreneurs applying for a UK visas were refused and that same year the country experienced an 88% decline in the number of international students finding a job after graduation because of the removal of a post-study visa.
The UK is losing ground in being a welcoming place for foreign talent – and continental Europe has become an appealing alternative for many; Berlin, Paris, Amsterdam, Copenhagen and Barcelona ahead.
A coordinated European Startup Visa scheme would provide a framework base for foreign entrepreneurs to discover local European markets, create local jobs and launch businesses in a multitude of European cities simultaneously without a visa deadlock.
The Netherlands, the country that launched Startup Delta, one of the most progressive startup visa of Europe, is the incoming President of the EU and could enact on this.
It would foster and strengthen the Region and the Eurozone
The Eurozone is in crisis. Austerity has not proven to be working. Instead, attracting global entrepreneurs is a more constructive answer in reviving local economies; which we have already seen with other startup visas like the Chilean example.
It is a fact that foreigners are two times more likely to become entrepreneurs. In the US, they are the driving force behind the majority of new businesses created.
The Chilean government understood this early on and created a startup visa programme called Startup Chile in 2010, as an experiment to bring global entrepreneurs and foster an entrepreneurial ecosystem. And so far, so good. In only five years, more than 1,200 startups from 72 countries graduated from the program.
Participants coming out of the program have raised over $100 million, and created more than 1,500 jobs. More than 200,000 Chileans have benefited from the community outreach initiatives organized by the companies.
If Chile’s Startup Visa programme is often criticised as it involves a significant amount of taxpayers’ money - the Government offers seed funding of up to 40,000 pesos to all successful applicants - it nevertheless proved to foster a local entrepreneurial scene, sparked innovation and has put Chile on the map of global entrepreneurs.
The economic potential of a similar programme in Europe could be counted in millions of local jobs created. It would not need to rely on Governments’ subsidies as Europe could use of its network of accelerator and incubators to channel private capital in these foreign entrepreneurs' new businesses - and would only require the EU to brand a packaged deal for global entrepreneurs accepted on the EU startup visa: an EU wide access to mentoring and resources already existing in its various startup hubs.
Diversity is a gain for Europe on all fronts
We Europeans have enjoyed the benefits of removing internal borders. It is time we create equal opportunities for enterprising foreigners.
For the last 20 years we have been granted the right to travel, live and work anywhere in the EU. The right to take a flight the same day to Paris, Berlin, or Vienna without visas. The right to decide to move to Berlin and start a company. The right to go study and work in the UK. The right to feel welcome and at home everywhere - without ever having the fear of being kicked out or having to renew or switch a visa. One of its best and most visible result is today’s vibrant technology and startup scene.
We should not be afraid of foreigners. We have a lot to gain at welcoming attracting successful foreigners in the EU, not just in terms of capital investment and national GDP growth.
Successful foreigners are the best promoters of EU startup scene worldwide. They are role models for other immigrants to integrate successfully the same and build the strong case for EU soft-power to promote its values of multiculturalism and democracy abroad.
It is time Europe provides a big generous welcome for founders and talents from the rest of the world who are entrepreneurial, ambitious and creative - the one that are most prone to integrate fast and contribute significantly to our GDP and local economies.
Time for Europe to scale up and foster a truly European startup scene
If I was to be bluntly provocative, I would argue that to create a Startup Visa for Europe is not a matter of choice but of necessity: innovation and growth are the only way forward for the ageing European continent and in the midst of a fast-changing world.
EU youth unemployment is still at a record high, and countries have lost many of their pioneers to more dynamic markets in Asia and in the BRICS. It is time to make Europe exciting again by welcoming the innovators,visionaries and job creators.
So far, there is no visa category at a European level that embraces the concept of a red-carpet for job creators – and it would come at no costs to create such a European Startup Visa in practice.
We need to tell our governments what we want and that is a coordinated, ambitious plan. Let’s speak, write and tweet about what a European Startup Visa would look like and how it could be interwoven and coordinated with existing initiatives and agendas.
And let us be noisy until it is done.
Featured image credit: FotograFFF / Shutterstock