A new US visa proposal aimed at luring the best entrepreneurs from around the world could increase Australia’s brain drain and damage the growth of the ecosystem, with several entrepreneurs calling for the government to implement a similar policy.
The White House has released an outline of a proposed Startup Visa that could allow startup founders to live and work in the US for up to five years while building a high-growth tech company.
Up to three co-founders will be able to apply for the visa, which will allow for a two year stay upfront and the potential for a further three years.
For a startup to qualify it must have been founded less than three years ago in the US, have the potential for rapid growth and job creation and have secured at least US$345,000 in private investment or US$100,000 in government grants.
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The applying co-founders must hold at least 15% equity in their company, have a central and active role and being able to prove existing household income of at least US$80,000.
The visa proposal is similar to startup visas in the UK and Canada, with the Australian government revealing its own Entrepreneur Visa in last year’s $1 billion Innovation Statement.
According to a consultation paper revealed in February, this visa will provide a permanent residency for entrepreneurs with “innovative ideas and financial backing from a third party”.
“It is critical for Australia’s prosperity and growth, that we not only tap into the best entrepreneurial minds in Australia but we also make it easier for talent from overseas to contribute to this country’s innovation future,” former Innovation Minister Christopher Pyne said at the time.
“We are also keen to retain those educated and talented people, who have come to Australia and developed their knowledge base during their time in this country.”
Increasing the brain drain
The US visa proposal is directly aimed at luring the best and most talented startup founders from around the world, and several Australian entrepreneurs have voiced concerns that it could increase the much-talked about “brain drain” to Silicon Valley and other startup hubs around the world.
Brosa co-founder and chief executive Ivan Lim says he would’ve possibly relocated to the US had the visa been around when he launched his startup.
“If this type of visa were around when we started Brosa in 2014 we would’ve seriously considered it and explored the possibility further,” Lim says.
“The USA is a bigger market with strong people and a strong entrepreneurship scene.”
Australian immigration policies are holding the innovation sector back already, Tank Stream Labs chief executive Bradley Delamare says.
“It’s incredibly difficult for Australian entrepreneurs to import foreign talent in the same way large companies can,” Delamare says.
“It’s a serious disadvantage for startups here, especially when we have a skills shortage in the tech space.”
A new startup visa
Urge co-founder Doron Ostrin agrees, saying the Turnbull government should look to replicate the Startup Visa proposal in the US.
“The current Australian immigration policies are so strict – introducing a similar bill for entrepreneurs to setup companies in Australia would definitely entice people to move here and create jobs,” Ostrin says.
Lim says that Australia is a very enticing place for international founders to set up shop, but the current policies are preventing them from doing so.
“We should always be looking to attract the brightest talent from Australia and also from all around the world to Australia,” he says.
“Three of our capital cities are in the top seven in the world’s most liveable rankings. I’m sure a lot of international entrepreneurs and engineers also want to come to Australia.
“These people are very smart and talented but because of the red tape they’re not able to move forward. The government needs to work with the startup community to talk through and explore this idea, especially as the country is moving away from the mining boom to the ideas boom.”
Delamare says that although the US proposal could ultimately help local startups to expand, Australia needs to relax its immigration laws if it wants to compete on the global stage.
“I think the Turnbull government should take inspiration from the Startup Visa,” he says.
“Australia has such strict immigration laws that prohibit movement. If we implemented a strategy like this it would really open up the door to creatives from all over the world and help to stimulate growth in tech and innovation here.”
This article was first published by StartupSmart.