Low take-up of migrant entrepreneur scheme linked to high living costs

The high cost of living in Ireland has been cited as a possible reason for the low take-up of a special migrant entrepreneur scheme.

The Start-up Entrepreneur Programme (STEP) was established by the Government in 2012 to attract high-potential start-ups here from outside the EU.

A report by European Migration Network (EMN) Ireland and the Economic and Social Research Institute (ESRI) said Ireland was one of the first EU states to establish such a scheme. Most EU member states did not set up similar programmes until after 2016 amid a global trend towards introducing visas for start-ups.

Programme

However,the report noted that the take-up of the Irish programme had been low relative to similar schemes elsewhere.

Explainer: what is the row about SF’s multinational tax plan?

---

EU eyes phasing out smallest euro cent coins

---

Domestic economy to grow by 3.6% but Brexit threat looms

---

Short-term mortgage arrears fall by a third, Central Bank says

---

STEP grants successful applicants and their nominated family members’ residence in the Republic for up to five years provided they have €50,000 to invest in the business and a business plan demonstrating capacity to reach €1 million in sales within three to four years.

The research found that the scheme here elicited 435 applications between 2014 and 2018 with 129 accepted, including 42 applications in 2018.

Compared to the EU's frontrunner, Estonia, which had 783 applications in 2018, STEP is "relatively small in scale" , it said.

“This report shows the number of family members entering Ireland on the basis of successful applications by start-up founders is low; perhaps in part this reflects relatively high living costs in Ireland,” it said.

The study cited other research, which found that start-up founders do not typically move to a new country because of its immigration policy but instead choose places where they think they have the highest likelihood of succeeding in doing business.

“Migrant start-ups face the same challenges as Irish domestic start-ups, in particular access to finance and therefore to scale,” the report said.

It also linked the low take-up to the fact that Ireland did not undertake any dedicated promotion of STEP abroad, instead relying on Enterprise Ireland’s general activities.

Enterprises

It also noted that the start-up landscape here benefitted from well-developed and active incubators and accelerator programmes, which support developing enterprises.

“However, awareness of STEP among incubators and accelerators in Ireland is low,” it said.

The Department of Justice has acknowledged challenges in attracting applications “aligned with the programme objectives” and has tweaked the structure of the programme.

The revamped scheme now requires applicants to participate in a 12-month incubator programme prior to preparing a STEP application.

"It is planned that this will improve the alignment of applications to the programme's objectives and increase awareness of the programme amongst incubators and accelerators in Ireland," the study said, noting a similar approach had already been adopted in the Netherlands, Portugal and UK.