SOUTH AFRICA – South Africa Contemplating New Policy on Business Immigration

South African officials have expressed concern that current immigration laws do not entice enough investors and entrepreneurial talent to the country.  The Global Entrepreneurship Monitor has consistently rated South Africa below other strong developing countries, which is due, in part, to its tight immigration policy that does not encourage a stead infusion of higher level skills and entrepreneurial-minded investors.
 
Currently, in order to qualify for a business visa to South Africa the applicant must demonstrate an intention of investing at least 2.5 million Rand (~$350,000) in a new or existing business.  This can be a serious barrier to entry for those who have innovative ideas, but little capital to get their business off the ground.  Such businesses would need to begin operations elsewhere and then relocate to South Africa.  While there is an exception to the capital investment rule, it is narrowly tailored to fit businesses in a limited number of industries.

Furthermore, South Africa’s work permit process only permits work authorization for 1 year at a time.  Work permits can be extended, allowing the person to remain and continue working, but the inconvenience of doing this on an annual basis can be discouraging to professional-level workers.
 
South Africa has taken steps to reform its education system to meet some of these needs.  However, the fruits of that effort will not appear for year.  In the meantime, South African’s International Investment Council has expressed a desire to reform current immigration law to entice young, risk-taking professionals who have the ability to add thousands of jobs to the economy.  In the meantime, some South African officials are concerned that the gap could lead to serious economic problems.