Efforts by regulators to turn Malta into a start-up hub has seen the island’s interest among entrepreneurs grow over the years, and, following from this, consulting and advisory firm Seed has proposed a framework for the introduction of a start-up visa.
“Malta is intrinsically linked to trade and entrepreneurship. Our strategic location has attracted some of history’s greatest traders and seafarers, and, as an island state with no natural resources, Malta’s economy thrived and continues to thrive on trade,” commented Sarah Martin, a Senior Consultant at Seed, and a key contributor to the proposed framework.
Stressing the importance of human resources and regulation to Malta’s economy, she remarked that today, successes have come about based on regulatory innovation.
“In fact, over the last few decades, we have seen a number of new economic sectors emerge, which have grown to become key contributors to our GDP. These emerging economies have diversified our economy and created high quality jobs. The effort to continuously innovate continues to prove crucial in order to achieve sustained growth.”
While efforts continue to be made to attract talent to Malta, the 2017 Global Startup Ecosystem Report (“GSER”) published by Startup Genome, states the country shows substantial potential to transition to a start up hub.
“There are various measures governments can introduce to foster the right environment for entrepreneurship. It is important to understand that entrepreneurs are highly mobile, quickly moving to jurisdictions they believe offer the best mix of investment-friendly, attractive fiscal regimes and supportive legal environments. In view of this, countries need to not only compete to ensure they keep attracting foreign talent, but to also ensure they are fostering the right ecosystem for these start-ups to thrive,” commented Ms Martin.
A start-up is typically defined as a young company which is founded by one or more entrepreneurs to develop a unique product or service to bring to the market. Over the past decade, the global appetite for start ups has grown exponentially, she added.
“The so-called Fourth Industrial Revolution has ushered in various opportunities in a number of fields such as artificial intelligence, internet of things and smart manufacturing. Also important is the rise of medtech and fintech which many a times start out from academic research. The rise of technology companies, creative products and novel service offerings have made governments and individuals appreciate the role of entrepreneurial innovators.”
Ms Martin went on to say that while countries have long-standing migration channels for business purposes, they are not best suited for individuals looking at establishing a start-up business.
Entrepreneurial or investor visas are often unattainable for start-up founders having early-stage, high-risk, innovative business projects, due to their stringent requirements and their emphasis on immediate economic returns, such as job creation, which can discourage risk taking, she noted.
Whilst Malta does offer self-employment visas, “the application process is cumbersome and often associated with extensive red tape”.
Ms Martin stressed that if Malta wants to continue growing towards establishing itself as a start up hub, it needs to strengthen the role it plays in attracting entrepreneurial actors to innovate, starting with the possibility of introducing a start-up visa to our list of migration programmes.
“In parallel, efforts need to be made to continue enhancing the ecosystem for start-ups which is fragmented and missing certain important links such as venture capital and solid accelerator programmes.”
She noted that the introduction of start-up visas has grown rapidly in recent years, as countries commonly associated with a tradition of settlement, such as Canada, Australia and New Zealand, have all introduced start-up visa.
A number of European countries and emerging economies in Asia and South America have also launched start up visas.
“This demand for such visas has led to a wide-range of countries to offer such initiatives and following COVID, with the rise of remote working and the already established digital nomads, the list is expected to continue growing.”
Each country has its own set of criteria and requirements for the attainment of a start up visa, which means that individuals need to carefully evaluate their personal situation to choose the country which best fits their business and personal needs.
Some countries, Ms Martin remarked, which have been offering start up visas for a substantial amount of years, are now looking at enhancing their programmes and make them more competitive by introducing measures which may lead an individual in possession of such a visa to apply for permanent residence.
“Malta can position itself as attractive hub for start-ups. Being a European Union member with a good quality of life and good connectivity, Malta needs to continue strengthening its ecosystem whilst also launching a dedicated start-up visa.
“We believe that the introduction of a start up visa will serve as a policy instrument to attract entrepreneurial talent from all over the world. The proposition of a start-up visa represents an essential step in ensuring the accessibility of skills and talent is made possible, whilst doing away with slow, cumbersome administrative procedures which create significant barriers to the mobility of innovative entrepreneurs and act as a deterrent for business.”
Read the full framework proposal here.