IM Yearbook 2020/21

Interview with CHAD ELLSWORTH, Partner at Fragomen
ENTREPRENEUR VISA
PROGRAMMES WILL SEE
EXPLOSIVE
GROWTH
Fragomen’s Chad Ellsworth believes that
governments will implement a greater number of
entrepreneur visa programmes to attract foreign
innovators who can help with economic recovery
and job creation in the post-Covid-19 era.
We are seeing an increasing
number of entrepreneurial visa
programmes being launched.
What’s driving this trend?
In my opinion it’s a result of a growing
global restrictionist immigration
environment driven by populism and
economic nationalism. It has been a
fairly recent phenomenon, and it’s hard
to pinpoint when it started. However,
we have already noticed that after the
2008 financial crisis and the economic
downturn, many governments began to reorient
their immigration systems towards
attracting the “best and brightest” global
talent and away from more traditional
family or employer-based systems.
Well-known receiving or in-bound
immigration nations such as Canada,
Australia, the UK and the US attempted
to move away from traditional paths of
immigration, to pivot towards a more
merit-based system that seeks to attract
the best and brightest talent including
entrepreneurs. The big question that’s
driving all of this is: how can governments
transform immigration from being a
potential economic burden to society in
some instances into a tool for economic
development? So, paradoxically, political
pressure and nationalism are making
programmes that have a demonstrated
impact on the economy very popular, in
particular in the current situation. For
instance, in the US President Trump
temporarily suspended the approval of
certain green cards until end of 2020 to
protect the American job market affected
by the coronavirus. The EB-5 programme,
however, was exempted from this order,
likely because of its job-creating nature.
The US, UK, Australia, New Zealand,
France, Singapore, Portugal,
Germany and many more countries
offer entrepreneur programmes
today. Which programmes are
standing out to you and why?
The French Talent Passport Programme
has recently been popular with an average
of more than 100 applicants per year,
although not in the same volume that
EB-5 has been popular, where there are
thousands of applicants per year and
major backlogs as a result given the 10,000-
annual limit. Still, it has gained traction.
The UK also runs the Start-up
and Innovator programmes geared
towards highly skilled graduates and
established entrepreneurs respectively.
The programmes are aimed at those
with new and innovative business
ideas and a relatively modest level
of capital investment is required.
There is also an attractive incubatorbased
programme in Canada, although
to my knowledge it has not been used as
widely as some of the European ones. I
think we are going to see a lot more of
these programmes in the near future.
Take the UK’s Tier 1 (Investor) Visa,
which requires a passive investment of £2
million in UK companies. Now, if there are
approximately 300-400 applicants a year,
that’s really a drop in the bucket if you
look at the total size of the UK economy.
It doesn’t make a huge difference into
the overall budget of the UK. So, I think
programmes that are tied towards job
creation, business formation as well as
attracting and retaining highly skilled
professionals are easier programmes
to support, and the UK government
is considering further changes in this
area post Brexit, in addition to recent
changes expanding the scope of its Global
Talent visa programme. We clearly see
that programmes that are tied to real
economic activity and job creation tend
to have support on both sides of the
political spectrum despite an overall
global restrictionist environment.
While from a policy perspective
these programmes might be very
attractive for governments, why
should they be on the radar of startup
founders and young graduates?
It really comes down to price point. These
programmes have a lower investment
threshold than the more traditional
investment migration programmes.
For instance, in France the investment
can be as low as €30,000. Therefore, it’s
attractive to recent graduates who might
have a great business plan and some seed
money or investors within their family
but might not have the $2 million, $1
million or even $500,000 required for
the citizenship or other residency routes.
So, these new programmes are really
geared towards younger immigrants
and recent university graduates.
Do you believe that entrepreneur
programmes will eventually overtake
the importance of traditional
investment migration programmes
and perhaps replace them?
I don’t think we are trending that way yet.
Unfortunately, the application process
around a lot of these start-up visas has
yet to align to today’s business practices.
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Investment Migration Yearbook 2O2O/2O21