BUSINESS VISAS:The format of startup visas that will encourage people to establish businesses in Ireland are currently under discussion – so what are the ways in which people can be encouraged to do business here, asks NEIL CALLANAN

PROPOSALS FOR A new immigration scheme to attract foreign investors and entrepreneurs, particularly in start-up enterprises in key sectors, are being drafted by the Department of Justice. The Irish Naturalisation and Immigration Service has begun consultations with State agencies and government departments on the new visa.

“Until they are more fully developed it would be premature to say exactly how they might look and the Department could not pre-empt the Minister’s own consideration of the matter and the views of other Departments,” a spokeswoman for the department said.

“However, it is recognised that the existing business permission scheme operated by the Immigration Service, which requires a €300,000 investment and has other employment-related conditions, is not sufficiently flexible to cater for certain types of businesses such as start-ups. Entrepreneurship and investment come in many forms and the immigration systems that interact with them need to respond in a more diversified way. The overall objective is to facilitate the creation of employment opportunities in Ireland.”

The move toward start-up and entrepreneurial visas is being replicated in most leading economies. Britain recently changed its visa rules to encourage entrepreneurs to locate there, but the scheme has faced criticism for the fact it is a fast track way for the super-wealthy to get citizenship.

In particular, eastern Europe’s and Asia’s mega wealthy are expected to be attracted to the offer which stipulates that, instead of waiting five years, those who invest £5 million will be allowed to settle there after three years and those who invest £10 million or more will be allowed to settle after two. They will also be able to settle there more quickly if they create 10 jobs or their ventures turn over £5 million in a three-year period.

The standard investment threshold for an entrepreneur to qualify for a visa there will remain at £200,000, but the government will also make provision for high potential businesses to come to Britain with £50,000 in funding from an approved source such as venture capitalists, angel investors, or through seed competitions.

In the United States, work is underway on the StartUp Visa Act which would give a two-year visa to immigrants who raised an initial $100,000 from a US-based investor, and then secured subsequent financial backing from other investors. They would also have to create at least five jobs. That would be a major departure from the existing green card system for foreigners who invest $1 million into a US business that creates 10 new jobs.

In Ireland, we had the passport-for-sales programme ourselves. The scheme ran from 1989 until it was abolished in 1998. It stated that any adult applicant for a passport like that had to make a £1 million investment in a job-creation project and buy a house and keep it for five years. Among those who bought passports were heirs of John Paul Getty, the US oil billionaire, while among the companies to attract funding under the scheme was Albert Reynolds’ CD Foods.

This latest start-up initiative is different, however, and has been under discussion for a number of months between various government department and agencies, according to Lorcan O’Sullivan, manager of Overseas Entrepreneurship at Enterprise Ireland (EI). He said it grew out of the work of the Innovation Taskforce, which reported last year, and was based on trying to attract more of these types of entrepreneurs who were becoming increasingly mobile.

O’Sullivan believes a number of key areas will emerge for the visas. Chief among them will be in the area of medical devices, where Ireland already has significant advantages.

“A lot of the industry’s work already originates here. The regulatory environment in the United States is tougher than in Europe. The companies can stay there and do field trials here but that’s hard and for some the best benefit would be if they just moved here,” he said, pointing to support services already in place in Galway, where there’s a cluster of such companies.

It’s the only medical device cluster of that size in the English-speaking part of Europe, says O’Sullivan, which proves attractive to entrepreneurs looking for a base for their new company.

He also believes entrepreneurs in the web and digital media will be looking at the new start-up visas. Entrepreneurs looking to locate in Ireland typically come from three backgrounds, the first of which is the diaspora and where a visa might not be required. But they are important in the two other categories, which involve people who’ve already left their home country and those coming from places where the start-up environment is worse. For the latter, the decision to move here could be based on weaker support for start-ups, a surfeit of bureaucracy or something as simple as the time difference between them and their customer base.

For those already living away from their home country, O’Sullivan says they are particularly footloose as they’ve already moved and so are willing to move again for slight improvements in their company’s prospects for success.

He has also had interest from overseas entrepreneurs looking to move to Ireland to develop consumer products and cleantech companies. He said the Department of Justice has been co-operative with EI and if EI wants a project to set up here, the department will be flexible within the rules to allow it to happen.

Typically start-up entrepreneurs looking to set up here are looking for handholding and funding, O’Sullivan added. “They’re not sure they can get it off the ground and whoever helps going forward is where they’ll locate,” he said.

Meanwhile, the Government’s strategy to grow Ireland’s position as a centre of international education has already run into difficulties since the new rules came into force in January. The rules state that if you are a non-EEA national coming to study in Ireland you must be enrolled in a full-time course under a degree programme or the “language and non-degree programme”. The maximum time for a degree programme is seven years and for a language and non-degree programme the limit is one year.

“Since the new rules impose limits on how long a person can remain in Ireland as a student, it will give rise in the second half of 2011 to a situation where substantial numbers of students will no longer be permitted to remain,” the department told Minister for Justice, Equality and Defence, Alan Shatter. The news comes despite the fact that “a series of measures are being implemented to facilitate visas for business, tourism and student visas from certain markets such as India and China while maintaining visa controls”.

O’Sullivan says these visas will prove attractive to doctorate students in particular. Some Chinese doctorate students have been reluctant to relocate here because they are not guaranteed a visa afterwards if they want to establish a start-up business related to it.

However, he expects that to change with the introduction of more acceleration programmes such as TechStars, a US start-up programme that provides seed funding and mentorship to innovative entrepreneurs, and which the DCU Ryan Academy recently joined.