Entrepreneur visa program is broken
Poor result: A visa program targeting international entrepreneurs is not working
Just eight visas have been issued in two and a half years under a federal government scheme set up to “attract and retain the best and brightest entrepreneurial talent”.
Documents released by the Home Affairs department under the Freedom of Information Act revealed that 25 visa applications had been lodged under the entrepreneur stream of the Business Innovation and Investment Subclass 188 visa since its launch in September 2016. Only eight applications were successful.
These figures include secondary applicants like family members, meaning the actual number of entrepreneurs that have come to Australia using to the visa could be as few as two.
Immigration lawyers have said restrictive funding requirements and a lack of awareness of the scheme had contributed to its failure. A revamped version of the program currently being trialled in South Australia has made some improvements on it.
Another government immigration policy aiming to attract tech workers to Australia, the Global Talent Scheme, has also faltered, with only one visa issued under the startup stream nearly three quarters of the way through its 12-month pilot program.
Hannan Tew Lawyers immigration lawyer Jordan Tew, who lodged the FOI request, said little attention has been paid to the entrepreneur visa.
“Realistically it’s probably two or three entrepreneurs in two and a half years. It’s not really doing what’s intended. This one suffers from a lack of awareness,” Mr Tew told InnovationAus.com.
“When the Global Talent Scheme came in, a lot of people in the startup and tech community were up in arms about what they did to the 457 visa, and this one faded to the wayside.”
The entrepreneur visa was launched in late 2016 as a way to attract entrepreneurs to establish startups in Australia, with a pathway to permanent residency on offer.
Applicants for the scheme must have raised at least $200,000 in funding from an Australian third party, such as a state government body or venture capital fund.
But StartupAus chief executive Alex McCauley said the scheme “takes a long time to process, is expensive, and hard to qualify for”.
“The way it stands, the entrepreneur visa is not very competitive. The biggest barrier is the money that has to be raised from an Australian fund before you’re eligible,” Mr McCauley told InnovationAus.com.
“Places like Canada allow you to raise $50,000 from angel investors rather than forcing people to have only raised from VCs and to have raised a six figure sum.”
“The bottom line is that if you wanted to go and start a business on an entrepreneur visa and you lined up the Australian visa next to almost any other competitive country, it wouldn’t make any sense to come here.”
StartupAus and other organisations have criticised these restrictions since the launch of the entrepreneur visa, and the federal government recently launched a trial of an improvement version of it, but only in South Australia.
The state program, which launched last year, removes the funding requirement for the visa, with $400,000 in funding over four years allocated to it by the South Australian government.
Applicants for the three-year scheme must be endorsed by a local incubator, accelerator or the Office of the Chief Entrepreneur. The state government has said it expects 30 people to come to South Australia as part of the trial in the first year, and 100 in the second.
Mr McCauley said the scheme is a “substantial improvement” on the national entrepreneur visa.
“It does away with that minimum raise requirement, so they’ve obviously taken on board some of the feedback they’ve had in deciding that scheme in South Australia. The SA scheme is a pilot, and there is a view that it should be considered nationally,” he said.
“It makes sense to have a mechanism by which people who want to start a high-growth business here that will employ lots of Australians can do so,” Mr McCauley said.
The Global Talent Scheme, which was launched by the federal government in July last year as a way to fast-track the visa process for attracting tech talent to Australia, has also struggled during its 12-month trial, with only one visa issued under the startup stream, and eight under the established business stream so far.