By Kent O'Neil, Global Legal Analyst, Newland Chase
Whether your business is tech or not – it’s hard to dispute that virtually every business is and will be hugely impacted by advancements in technology over the coming years. Accessing those technologies, and partnering with emerging leaders in this new world, will clearly be key to long-term success.
When we think of the “hotbed” cities of the technology industry – Silicon Valley, London, Paris, Berlin, Singapore, Tel Aviv, Bangalore – might immediately jump to mind. No doubt these will continue to dominate the global tech scene. But the established players often have their drawbacks – higher cost of living, increased competition for talent, higher median salaries, etc.
Looking beyond these top tier locations… there are numerous global destinations which are quickly growing into the tech hotspots of the future. These lesser known tech hotspots are now attracting global talent, innovative start-ups, and foreign investment dollars to rival those majors. Many of these second tier tech locations offer significantly lower costs of doing business – with lower wages and real estate prices. Some of those cities most aggressively courting tech businesses are even offering attractive incentives such as – incubator programs, discounted (sometimes free) office and operations space, and public-private financing.
Here’s just three of these lesser-known up-and-coming global tech hotbeds that may not be on your radar… but should be. And some of the latest in-country business news and a quick summary of business immigration routes.
Barcelona | SPAIN
When many of us think of this picturesque city on the northeast coast of Spain on the Mediterranean Sea – we think of football, vacations, and world-class beaches. But increasingly, when thinking of Barcelona, companies think – innovation and start-ups. Barcelona is already host city to the Mobile World Congress each year. Amazon, Airbnb, and WeWork now have significant operations in the city. Numerous other fast-growing tech companies in Barcelona will soon be globally recognised brands.
Barcelona is home to dozens of public-private partnerships and hubs to support the tech start-up ecosystem. This year, the largest – Barcelona Tech City – announced the creation of a new specialised space dedicated to blockchain technology. In 2017, Barcelona start-ups attracted more than EUR 470 million in investment, double that of the year prior. The largest tech sectors receiving investment were in mobile and ecommerce.
Barcelona is particularly attractive to new and start-up ventures. Investment dollars in fledgling enterprises can go further. Barcelona has a significant existing pool of young tech talent – but at salaries well below (by as much as a third) that of other European locations like London, Paris, and Berlin. Other living expenses – rent, food, transportation, etc. – are likewise cheaper. The local tech scene is becoming increasingly international but is still small enough to be tight knit and collaborative. Not to be underestimated, Barcelona also has that intangible “cool factor” attractive to young expats seeking quality of life – i.e. dining, culture, ambiance, weather, night life, activities.
Business Immigration and Visas
Spain’s business immigration and visa system is relatively easy, with visitors able to enter the country on a visitor visa and obtain temporary residency and work authorisation in-country. The most used route is the Highly Qualified Employees route under Spain’s Entrepreneurs’ Law. A typical immigration process is just over 90-days start to finish.
As a European Union state, Spain also has the Intra-Company Transfer, Blue Card, and Van der Elst routes similar to other EU countries. Spain also participates in the Schengen Area visa system.
One wildcard at the moment for Barcelona, however, might be the political uncertainty surrounding the Catalonian independence movement. In October 2017, a referendum and later declaration of independence deemed illegal by the Spanish central government created a political crisis in the semi-autonomous region of Catalonia – of which Barcelona is capital. The Spanish government removed, replaced, and/or jailed numerous regional government officials and reasserted its hold on the region. While to date, the situation has not resulted in any restrictions on business operation or immigration to the region, the independence issue shows no sign of going away.
São Paulo | BRAZIL
As Latin America’s largest economy continues to come out of its deep recession, it is Brazil’s large entrepreneurial and self-employed sectors that appear to be leading the way with new job growth. The majority of the country’s new start-ups are located in the sprawling metropolis of São Paulo – one of the world’s top 10 cities both in terms of population and total GDP. While hard numbers of new businesses (some sources cite 2,700) recently started in the city are hard to come by because of the sheer size of the market, São Paulo is clearly by far Brazil’s most developed start-up scene.
Even major tech players are recognising the opportunity that São Paulo presents. In 2017, Facebook launched its Hack Station training centre with capacity to provide free training and work stations to more than 7,400 Brazilian coders and tech entrepreneurs. Alphabet opened a six-story Google Campus São Paulo just a few blocks away in 2016. WeWork has multiple sites in the city, and several major Brazilian banks have backed large tech incubator spaces in São Paulo in recent years. One such space – Cubo – is currently expanding into a 12-floor building in the financial district that will have space to house up to 210 companies and 1,250 workers.
Business Immigration and Visas
Brazil’s business immigration system underwent a whole-scale revision in 2017 – rewriting much of Brazil’s immigration laws. While there have been some delays due to implementation over the past year, the long-term effect of the reforms will be to modernize the immigration system into a more business friendly scheme.
The new law streamlined Brazil’s previous scheme of multiple visa categories into five major categories. Visit Visas include the visas issued for business purposes, and Temporary Visas apply to all employment-based immigration. Once in-country, Residence Permits can be obtained for long-term work assignments.
Beneficial to business travellers, Brazil has a new electronic visa system – currently available to citizens of Australia, Canada, the United States, and Japan. The new system issues electronic e-visas for business travellers within 72 hours of application.
For more on Brazil's business environment and business immigration system, read our blog Going Global: Expand Your Business to Brazil. For more on Newland Chase's capabilities in Brazil, read Newland Chase Opens New Office in Rio de Janiero.
Sydney | AUSTRALIA
Half a world away is perhaps the most overlooked tech up-and-comer of these three. In Australia, a strong economy and already vibrant national entrepreneurial culture is now beginning to foster a growing tech scene in Sydney – despite its distance from the traditional tech centres of North America and Europe. In the past, often a challenging environment in which to obtain financing from conservative local institutions – international venture capital firms are now increasingly recognising the opportunity in Sydney and backing it with money. Recent media reports estimate that there is more than AUD 2 billion in venture capital funding available for Australian start-ups.
The largest number of tech start-ups in Sydney tend to be in the “internet of things”, med-health-bio-tech, and fintech sectors. The current challenge for the firms in those industries appears to be – finding enough talent to take advantage of the financing. But that trend is gradually turning around. Known globally for high quality of life, international tech talent is joining the already significant home-grown pool of talent in Australia to produce a highly skilled tech workforce with Sydney at its hub.
While the tech start-up scene is still a relatively new phenomenon in Australia, it has certainly gathered steam since around 2013. So competition for financing may currently be less intense than what start-ups may experience five years from now. Like Barcelona and São Paulo, new private-public incubators and space-sharing buildings are opening, marketing themselves as “business on the beach” – emphasising the marriage of business opportunity and personal lifestyle that is attractive to many in the industry.
Business Immigration and Visas
A major overhaul of Australian immigration regulations culminated this year in the termination of the former 457 Visa stream and its replacement with a new Temporary Skill Shortage (TSS) Visa in March 2018. This program is the primary route for companies to employ foreign nationals in Australia. Chief among the recent changes were the significant reduction in the number of occupations eligible for employment-based visas, the bifurcating of the visas into 4-year and 2-year streams based on new occupations lists, and some limitations on permanent residence routes.
The changes also included new Labour Market Testing Requirements. (For the latest developments on LMTRs, see our 23 November alert here.) A new Skilling Australians Fund levy on companies employing foreign nationals was also introduced in August, increasing the cost of employing foreign nationals.
However, on the whole, Australia’s economy is somewhat dependent on foreign labour, and the immigration system will continue to be open – especially where potential new business and job creation is involved. Applications processing times for work visas under the TSS Visa stream are reasonable at just over 90-days.
Also of note, for entrepreneurs considering new ventures in Australia, a new Global Talent Scheme pilot program started in July this year. One of the qualifying criteria for this program is “start-up status”, and qualifying companies receive streamlined TSS application processing and a shortened path to permanent residence for their applicants.
For more on the recent changes in Australian immigration law, you can view the on-demand recording Life after Australia's 457: How to Succeed Under the New TSS Visa.
There’s obviously a lot happening in the global tech scene, and I could have included so many more attractive destinations on this list. Continue to read our blog for more in the coming months on our website at blog.newlandchase.com as Newland Chase tracks the changing international business and business immigration environment. We currently support clients to and from more than 150 countries throughout the world. You can have all our alerts and informational blogs conveniently emailed to you once each week by signing up on our homepage.
For an in-depth assessment of the opportunities and challenges in a particular country or venture, you are always encouraged to reach out to your Newland Chase immigration specialist for detailed guidance. Companies with general enquiries are invited to email at firstname.lastname@example.org.
Kent O’Neil is a Global Legal Analyst and frequent writer and speaker on international business and global corporate mobility for Newland Chase. Kent received his Juris Doctor from Penn State’s Dickinson School of Law and a Bachelors in Economics from Clarion University. Prior to joining Newland Chase, he worked in both private practice and in-house for a multinational corporation operating across North America, Europe, Asia, and the APAC region. Now based in the U.S., Kent has lived and worked as an expat in Pakistan and the Philippines.
This blog was prepared by the team at Newland Chase. It is informational only and is not intended as a substitute for legal advice based on the specific circumstances of a matter. Readers are reminded that immigration laws are fluid and can change at a moment’s notice without warning or notice. Please reach out to your Newland Chase contact should you require any additional clarification or guidance. Written permission from the copyright owner and any other rights holders must be obtained for any reuse of any content published or provided by Newland Chase that extend beyond fair use or other statutory exemptions. Responsibility for the determination of the copyright status and securing any permissions rests with those persons wishing to reuse this blog or any of its content.