Brendan Fay criss-crossed Canada in June in search of ways to persuade entrepreneurs to leave the country and start businesses on the Emerald Isle.
The development adviser for Enterprise Ireland doesn’t see himself as a poacher, but rather a preacher of opportunity. The Irish government is dangling the lure of a new program that offers entrepreneurs fast visa approvals and startup loans from a 10-million Euro ($13-million) fund.
“Seeking out international startups is part of our strategy to get Ireland back on track,” he said.
The program is less than a year old and Ireland has attracted 10 foreign entrepreneurs who have launched mobile technology, gaming or health sciences businesses. It hopes to pull in 20 more this year.
Ireland’s pitch joins an increasing number of come-ons from countries that are wooing just the types of tech-savvy immigrants Canada is hoping to lure after it completes a renovation of its entrepreneur immigration program this year.
The goal is to bring in immigrant business owners with potential to create high-value startups that can compete on a global scale, as opposed to, say, opening a local corner store or a restaurant, Immigration Minister Jason Kenney explained in April. Consultations are continuing with industry groups and he added he hopes to start the new entrepreneur visa program in the fall.
“Canada cannot afford to lose out in the competition for foreign entrepreneurs among immigrant-receiving countries,” Mr. Kenney said. The previous program was scrapped because it became so bureaucratic that applicants faced waits of up to seven years for approval.
But in an era in which technology companies can be set up anywhere, the competition is getting stiffer.
Several other countries are taking Ireland’s approach of trying to attract innovators with the goal of creating clusters of expertise. Britain is fast-tracking entrepreneurs in software, digital media and other high-tech businesses, said Trevor Novak, director in Canada of the U.K. Trade & Investment department of the British High Commission in Toronto.
“We’re trying to engage with companies at a very early stage that spin off from universities or from tech firms, like those around Waterloo (Ont.), that are looking to reach a bigger market,” Mr. Novak said.
Leads come from social media and profiles on data bases of universities, business incubators and government and trade organizations.
A number of Asian countries are also making pitches to Canadians to develop clusters of startups in tech sectors, noted Frank Pho, Vancouver-based vice-president for global expansion at Business Development Bank of Canada. “The idea is to build a sustainable ecosystem. Even if the initial companies grow and move somewhere else, they will have spun off other companies in the sector that could survive and spin off others as they grow,” he explained.
Vietnam, for instance, has a new program to encourage software developers to set up in the country. It’s encouraging tech startups by allowing ex-pats to operate tax free for the first year and to be taxed at half the full business rate for the next four years, Mr. Pho said. One of the provinces in Vietnam sent a delegation to Canada in May to promote the fact it is offering facilities on top of the tax advantages.
China’s five-year economic development plan focuses on energy, environment and information technology and it gives preferential treatment to startups in those areas. It’s being promoted through a joint China-Canada working group.
Taiwan wants to grow tech clusters as well, and at the moment it is focusing on pharmaceuticals, with a $150-million fund to attract research and development startups.
This sector approach is one that Canada needs to consider in its new entrepreneur immigration program, Mr. Pho suggested.
“When we help entrepreneurs from overseas come into Canada to set up shop, we could actually increase the competition to our Canadian companies,” he cautioned. “Being a market of only 35 million people we should focus more on developing technology we can export.”
That might mean building clusters of expertise in existing Canadian specialties such as conventional and alternative energy and resources, he said.
Access to financing and tax deals are another way to remove stumbling blocks to startup immigration. “Canada does not have the same level of preferential tax treatments or other benefits that other countries are offering,” Mr. Pho added.
Early funding is a core element of both Britain and Ireland’s approach. Mr. Fay pointed out it’s difficult for startups to attract the interest of venture capital investors until their businesses are viable. Ireland’s program provides introductions to seed, angel and venture capital providers and it will hand out loans of up to 50,000 Euros ($65,000) from its startup fund as long as some other source of financing provides matching dollars.Report Typo/Error
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