Canada Tops OECD Report as Most Desirable Destination for Immigrant Start-up Founders

11 Sep, 2023

Canada Tops OECD Report as Most Desirable Destination for Immigrant Start-up Founders

Immigrant entrepreneurs play a pivotal role in stimulating innovation, generating employment opportunities, attracting foreign investments, and propelling economies forward. Consequently, an increasing number of countries have introduced start-up visa programs to specifically target high-potential entrepreneurs. In a notable development, the 2023 edition of the OECD Indicators of Talent Attractiveness introduces a groundbreaking ranking of the most appealing OECD countries for immigrant start-up founders.

Canada emerges as the top-ranking nation, recognized as the most enticing destination for immigrant start-up founders and entrepreneurs among all Organization for Economic Cooperation and Development (OECD) member countries. This distinction is based on the comprehensive evaluation provided by the OECD Indicators of Talent Attractiveness, which takes into account both general factors and specific immigration policies designed to attract prospective international start-up founders.

Canada's impressive standing is attributed to its excellence across various dimensions within the framework, except for the 'skills environment.' The country boasts a substantial number of unicorn companies, providing fertile ground for innovative ventures. Additionally, Canada offers a favorable regulatory framework for initiating and operating businesses, promotes inclusivity and welcoming communities for migrants, and provides comfortable living conditions, as highlighted in the OECD report.

Following Canada's lead, the United States, France, the United Kingdom, and Ireland secure positions from second to fifth place in the ranking among the 22 OECD countries. The United States and the United Kingdom have established themselves as prominent start-up hubs, characterized by robust entrepreneurial cultures and the emergence of numerous unicorn companies over the past decade. However, these nations exhibit relatively less developed migration policy frameworks compared to Canada and France.

The United States, for instance, extends an initial stay of 2.5 years for start-up founders, with the possibility of renewal for an additional 2.5 years through the International Entrepreneur Parole Program. Notably, there is no direct pathway to permanent residency for migrants on parole, although they may explore alternative visa options if they meet the eligibility criteria.

France has adopted a multifaceted approach to attract foreign start-up entrepreneurs, introducing two distinct programs tailored to the needs of start-up founders. The French Tech Ticket initiative is exclusively designed for non-French entrepreneurs, offering a competition where winners receive funding, incubation, and mentoring for one year. Simultaneously, the French Tech Visa expedites the issuance of a four-year residence permit for start-up founders under the Talent Passport visa category. Moreover, France's favorable tax incentives for research and development (R&D) contribute to its high ranking.

The top-10 ranking encompasses several smaller European economies, including Ireland, Portugal, and Sweden. While these nations may not match the size of the start-up ecosystem in the leading countries, they offer unique advantages for international start-up founders. Ireland, for instance, simplifies procedures for family members to join and access the labor market, coupled with generous tax subsidies for R&D and low corporate tax rates. Portugal similarly offers substantial tax incentives for R&D, complemented by low living costs and a robust skills environment.

Conversely, the bottom of the ranking features countries known for their robust start-up culture and infrastructure, such as Estonia, Japan, and Israel. Despite offering excellent access to venture capital funding and high levels of digitalization, these countries rank lower due to less favorable migration policy frameworks, particularly concerning the transition from an initial start-up visa to permanent residency. For example, Japan provides start-up founders with a short-term initial visa permit and imposes a stringent review after just six months. Israel stands out as the only covered country where start-up founders have no avenue to acquire permanent residency. Moreover, both Japan and Israel permit family members to join the main applicant only as visitors without access to the labor market.

While not featured in the top-10 ranking, Chile has made significant investments in its start-up visa program, known as Start-Up Chile. It offers opportunities for start-up founders to compete for funding, attracting a substantial volume of start-ups and positioning the country as an innovation hub. However, the OECD report emphasizes that migration policy alone may not suffice to make Chile as appealing to migrant start-ups as the top-ranked countries. Comprehensive innovation policies, programs, and enhanced regulatory frameworks are essential to attract international high-potential entrepreneurs.

In conclusion, the ranking of OECD countries in terms of attractiveness for immigrant start-up founders underscores the critical role of immigration policies and support structures in fostering innovation and entrepreneurship. Canada's leadership in this ranking highlights its commitment to nurturing a thriving ecosystem for immigrant entrepreneurs, while other nations are encouraged to enhance their frameworks to remain competitive in the global landscape of start-up innovation.