How Africa can surf the wave
Granting citizenship to entrepreneurs or creating long-term residency programmes could hold advantages for African countries, says Nicolas Salerno, Managing Partner of Golden Visa
When asked about their reasons for seeking second residencies or passports, African business people’s main motives seem to be largely the s ame, and based on four key aspects:
Mobility – Most African passports are quite limited when it comes to travel, and as such represent a serious constraint when developing a businesses. This was even more noticeable during the Covid pandemic, where most of the world’s borders were closed unless you were a resident or citizen of the country (or group of countries). As a result, we saw an increasing demand from African applicants to Portugal, the United Kingdom and even to Antigua and St Lucia.
Education – Most African businesspeople still look favourably at the UK, continental Europe, Canada and the USA for education, and naturally they will opt for those destinations when considering immigration, especially if they have children.
Safety – Political or economic instability, rising insecurity and crime… these are some of the reasons that are given to us from African, and other, applicants. It is therefore no surprise to see Portugal, Canada and Australia ranked highly among the choices of second residencies, since these countries get top marks for keeping their citizens safe.
Taxes – As a businessperson, a key aspect of consideration is managing one’s finances and tax liabilities. Conversely, many countries are competing for talent and want to attract high-skilled professionals and entrepreneurs. We are seeing countries like Malta, Ireland, Bulgaria attract entrepreneurs through corporate incentives, and Portugal and to an extent the Caribbean islands through personal incentives (offering a tax residency scheme in addition to citizenship).
It is interesting to note that the African continent is yet to establish a business immigration programme, despite being home to over one billion people, many of them young, and having the world’s largest free trade area.
To some extent we saw Morocco and other countries develop free zones in order to attract foreign capital, while offering promising conditions to foreigners willing to retire there. Rwanda, South Africa, Kenya, Ethiopia, Mauritius have all developed some sort of tax incentives to bring fresh capital to their economies (and to enlarge their business borders), while western African countries have created a monetary union to facilitate economical exchange, as well as the capacity to obtain residency easily for citizens of the union. But still to this day there is no established business immigration programme in Africa - Seychelles are considering it but no official announcement has been made.
What if African nations granted citizenship to business entrepreneurs, or long-term residency programmes? It is something that they should definitely consider, and it might increase foreign investment in strategic sectors.
Caribbean nations that have adopted similar schemes have been able to significantly supplement their state budgets through these schemes, with many infrastructure projects being financed through those programmes. It is true that most African passports have limited mobility, so the impact might not be quite the same, but I still believe that there is room to implement a business immigration scheme in Africa.
With visa-free travel to 146 countries, a friendly business environment, and easy path to opening a business (not to mention a 15% corporate tax rate and tax-free dividend distribution, high levels of safety and a good education system), Mauritius is certainly the readiest candidate to develop such a scheme.
The country is greatly appreciated by anyone who has visited it and known for its good infrastructure and hospitality, as well as its progressive government when it comes to ease of doing business.
Another candidate is South Africa. With visa-free travel to 102 countries it has room to improve its mobility by negotiating more visa-free agreements, but South Africa remains a very attractive destination, both as a place to live with appealing cities such as Cape Town and first-world infrastructure.
Botswana has established a good map for growth, with a great track record when it comes to governance, security, education and health. Many foreign companies are already establishing themselves in Botswana, which is considered a safe country where the tax environment is relatively friendly.
Other countries such as Egypt, Morocco, Senegal, Ethiopia, Kenya, Rwanda are economically dynamic and offer good infrastructure and services but their lack of global mobility holds them back in terms of appeal, at least for golden visas. I remain convinced however that the opportunity is there to develop these services.
The African continent is yet to establish a business immigration programme, despite being home to over one billion people, most of them young