Letter from the CEO – March 2022

This month, I submitted a letter to the office of the President, discussing recent decisions made by South Africa’s Departments of Home Affairs and Labour around the new Critical Skills List and subsequent practical implications, as well as the withdrawal of the ZEP and other immigration issues creating barriers to entry for foreign nationals coming to South Africa. In doing so, I have thought long and hard to provide some suggested solutions to our government around some of these pertinent issues.

As an active member of multiple Chambers, including the American, French, German and Spanish Chambers of Commerce in South Africa, it causes me major concern that foreign nationals interested in investing in this country economically and professionally are coming up against the aforementioned barriers to entry. The feedback and suggestions I will be putting forward in this article has been repeated and supported within my regular one-on-one interactions with members of said Chambers. Thank you to the Spanish Chamber for making this submission possible; I am extremely grateful for the assistance with passing on these suggestions to the office of the President.

At IBN Immigration Solutions, we have worked with major American and European multinationals, cementing our authority as a chosen corporate immigration services provider. Our corporate partners have expressed similar concerns on the issues I submitted to the Presidency. These partnerships and IBN’s business objectives clearly reflect my intentions to drive South Africa’s economy forward from a foreign investment perspective. One such path to economic stimulation is to encourage the entry of remote workers through the launch of a Digital Nomad Visa.

The launch of the Digital Nomad Visa

The launch of a Digital Nomad Visa for South Africa has been listed as priority for 2022 but was a suggestion first brought up in the President’s previous year’s address. I recently took part in a webinar in which we experienced massive interest from global mobility experts and digital nomads looking to South Africa as an attractive remote-work destination.

This visa option has already seen certain success in countries such as Croatia, Spain, Brazil, Germany, Norway, Dubai and many more. Implementation of such a visa in South Africa would not be difficult as our tourism infrastructure and the legislation we already have in place would support it favourably. The United States saw an increase of digital nomads from 7.3 million in pre-pandemic 2019 to 10.9 million in 2020. Last year, the Inter-American Development Bank (IDB) forecasted that there will be 1 billion digital nomads by 2050.

While this visa type may not bring about significant economic benefits immediately, we must see it as a branding opportunity for South Africa. Foreign nationals coming in on this visa will have the opportunity to take in this country’s quality of life and amenities in line with international standards for a short while, encouraging further visits and in the long run, increased Foreign Direct Investment. However, it is not enough that this visa option becomes available – our legislation needs to act to clear the path for skilled foreign nationals.

As such, I suggest the following for the successful, long-term implementation of this visa.

1. The visa duration should be for 12 months, with the option to renew.
2. Digital nomads on this visa should be allowed to bring their spouses and dependents along on a Spousal/Dependents Visa. This would allow us to fall in line with international immigration best-practice and make us more attractive overall as a remote-working destination.
3. Applicants must apply for international health insurance as part of international best practices.
4. Proof of income should be supplied for around 2000 USD. Currently, Costa Rica requires 3000 USD for individuals or 5000 USD if accompanied by family. Mauritius currently only requires 1500 USD per family application and Croatia requires proof of salary for around 2500 USD. Therefore, I feel the above is a justified estimation for South Africa in terms of comparison.
5. Applications should be submitted at the relevant South African embassy in the visa applicants home of residence to ensure thorough background screening.

Secondly, with regards to the recently released new Critical Skills List gazetted on the 2^nd of February 2022 and enshrined under the Immigration Act Section 19(4), certain waivers have been withdrawn that previously allowed ease-of-entry for Critical Skills Visa holders.

While I believe there are quite a few professions being omitted to detriment, such as foundation-stage educators, health practitioners, international salespeople and management consultants to name a few, I am more concerned about the practical implications of certain new and recently withdrawn directives around the new list, especially affecting permanent residence.

The new Critical Skills List

1. The department has now implemented a minimum qualification and depending on the category, various NQF levels apply. In some categories, the NQF level has been raised as high as level 8. This immediately creates a barrier to entry as most European applicants rarely qualify for more than a Bachelor’s Degree but have extensive work experience (sometimes up to 20 years).

As a solution, I suggest a waiver implementing five years or more of proven, verified working experience as an add-on to existing qualifications, allowing the applicant to qualify on the basis of both academic and experiential learning. For example, if the listed job role requires a level 8, two levels could be waived if the applicant has an excess of five years of experiential training.

2. Previously, Directive 22 of 2014 allowed assignees to submit applications with either proof of application or proof of membership with professional bodies. This waiver was withdrawn on the release of the new list, meaning applications for a Critical Skills Visa can only be made with full membership with a relevant professional body in-line with their qualifications and job title, along with a letter of support from said body or relevant government institution confirming the applicant’s skills and qualifications.

The practical implication here is that applicants now have another waiting period to contend with during application – sometimes up to four months, depending on the professional body.

The withdrawal of this waiver was not clearly explained by the department and my suggestion here is that it is re-implemented, as the increased waiting period adds yet another barrier to entry.

3. A ministerial waiver (2016) previously allowed assignees who graduated in one of the critical skills list fields from a recognised SA Higher Education Institute to immediately apply for permanent residence. However, the department recently revoked this waiver. Any assignee who falls under the new list will now have to comply with the new requirements for temporary and permanent residence to apply. This also hinders foreign applicants who have studied at a recognised SA Higher Education Institute from applying for temporary residence visas, as most professional bodies will only endorse and write up a letter of support if the applicant holds two years of relevant experience.

If immediate permanent residence must be withdrawn, I offer this solution as a middle-ground – create a directive granting Critical Skills graduates an automatic right to work without further checks. Grant them a work visa, applied for through VFS with proof of employment – any employment – to gain entry into the South African job market. This will undoubtedly create value as it will allow skilled people to enter our job market and transfer or gain further skills for two years.

4. Withdrawal of the previous one-year Critical Skills “job-seeker” Visa has made it close to impossible for foreign nationals to find a job in South Africa from their country of residence.

This job-seeker visa was in line with international practice and as an immigration expert, I cannot see the positive application of withdrawing this visa. It is practically very difficult to obtain gainful employment if one is not present to attend interviews and physically seek out work.

Permanent Residence Affected by DHA Backlog and new Critical Skills List

Permanent residence applications were only recently re-opened after a 22-month ‘pause’ on applications. Critical Skills Visa applicants (and permanent residence applicants in general) who applied for permanent residence on the old list have been anxiously awaiting this re-opening and yet the resulting backlog, combined with the directives below, have made it very difficult, if not impossible, for valid Critical Skills Visa holders to apply for permanent residence. This applies especially if their role does not fall on the new list, and they made application after the list was gazetted on the 2^nd of February. In this case, they are ineligible.

If the applicant submitted their visa or permanent residency application before the 1st of February 2022, their application will still be assessed under the old list of 2014.

The suggested solution to this issue would be to allow Critical Skills Visa holders to apply for permanent residence based on the old list within a grace period of two years to help offset the backlog.

South Africa’s Business Visa

A Business Visa is issued to foreign nationals looking to start a business in South Africa, in terms of Section 15 of the Immigration Act, read with Regulation 14 of the 2014 Immigration Regulations.

1. At present, the monetary requirement to qualify for this visa is 5 million ZAR, a number estimated by the Department of Trade and Industry. While a waiver application exists for those looking to start a business with less than the prescribed amount, this application can take eight to 10 months to be approved. 10 months that could be used to create and start up their business idea.

My suggestion to increase attractiveness to foreign investors and stimulate economic growth in South Africa would be to lower the monetary requirement to around 2-3 million ZAR, increasing our competitiveness for FDI on an international scale.

2. Another suggestion in this category is to allow third-party funding for start-ups. Presently, international investors looking to create start-ups in South Africa are not allowed to apply for third-party funding. I believe this is to our economy’s detriment and approval for funding should be based on the company – not the individual, especially as South Africa is becoming digitally competitive to global standards.

Suggestions for ZEP Holders

Immigration Directive 11 of 2021 withdrew the ZEP for Zimbabwean nationals in South Africa. I understand that the initial issuance of this permit was a temporary fix, many Zimbabweans living, working and growing families in South Africa are now in limbo as to the way forward.

I suggest here that ZEP holders should be allowed to transfer to a work visa with proof of an employment offer from a registered, compliant employer, without the long-winded process of submitting with the Department of Labour, as is the case with the General Work Visa. This would ease transference into the official system and prevent corruption in terms of seeking out employment with unregistered entities or without an official work permit. Furthermore, this would allow registration with our South African Revenue Service and payment of UIF and PAYE, which in turn will increase our existing tax base.

Grant Foreign Spouses an Automatic Right to Work

Spouses of foreign nationals allowed to accompany the visa holder on a Spousal Visa should be granted an automatic right to work, wherever and however they choose, ensuring both parties entering the Republic have access to continued monetary means and therefore continued stimulation of the economy while both parties live in the Republic.

This would not require much effort legislatively as this legality already applies to the spouses of South African citizens.

Other Economic Stimulation Suggestions:

Increase the current standard of qualifying for a QSE certificate for BBBEE from 10 million ZAR to 25 million ZAR. The current stipulated amount is problematic for our present economic climate, and therefore I suggest increased contribution from businesses in this area, to stimulate our economy overall.

Identity Document Registration

Even as a naturalised citizen, I am only allowed to apply for a green ID Book and not the standard ID card recently introduced in South Africa. If we want our naturalised citizens to feel like true citizens, we must be allowed to enjoy the rights of citizenship. Part of that is presenting valid documentation proving just that.

Conclusion

As an immigration expert and an active member of various Chambers of Commerce, it is my opinion that we should be involved in the discussions around immigration legislation as we continue our hard work to make South Africa an attractive tourist and working destination, leading to increased, sustained foreign investment and therefore improved employment rates for all.