Entries by xp-admin

SONA Foreign Talent Announcements Enticing, But Are They Realistic?

20/02/2023 in , /by

However, she warns that any advantage to be gained will depend on how well the proposals are implemented, how soon and if the current visa system can support them. “Whatever the improvements we can hope for, employers need them yesterday,” she says.

Xpatweb’s respected annual Critical Skills Survey has been running for the last 5 years and consistently indicates that over 80 percent of businesses struggle to recruit skilled talent locally. So, the only way to satisfy their operational needs is to source it internationally.

The proposals put forward by the President include:

A more flexible points-based system to attract skilled immigrants

Several other countries, notably Canada and Australia, use a points-based system that assigns points to selected criteria, such as education level, years of experience, wealth, etc. If the accumulated points pass a minimum threshold, a candidate qualifies to enter the country.

“We currently have fairly rigorous requirements to bring skills into South Africa, so a ‘more flexible’ system suggests that certain of these will be eased to speed up the entry of suitably qualified candidates,” says Jacobs.

A trusted employer scheme to make the visa process easier for large investors

The Department of Home Affairs (DHA) already launched its Corporate Accounts Unit in 2014, dedicated to servicing corporates and multinationals based in South Africa.

“This certainly seems like an extension of that function to make it easier for these companies who need to bring in skills regularly and on an ongoing basis, so it is an extremely good development,” says Jacobs.

The streamlining of application requirements

It is on this point that Jacobs becomes less positive about the realities of these changes. “While the initiatives are to be applauded, their efficacy hangs on good implementation,” says Jacobs.

She highlights the backlog from the failed Central Adjudication system last year, leaving a large number of expatriates still waiting to be issued their visas.

In addition, Jacobs reports a tightening of the immigration regime over the last 12 months that has made it much harder to secure a work visa and that it takes much longer now for applications to be processed. She also sees the highest rejection rate in the last 15 years, often for arbitrary reasons.

“To provide the greatest benefit, the government must ensure there is an underlying system that aligns with and supports these proposals,” says Jacobs.

The introduction of a remote worker visa

Remote visas are a rapidly growing trend and are being introduced by many countries around the world. Apart from attracting the foreign income of digital nomads, the visa could serve as an incentive to foreign candidates whose spouse wishes to continue working remotely for their overseas employer.

“After COVID, we saw a massive increase in remote working and still deal with this daily as a consulting business, and we foresee this visa being immensely popular for the foreseeable future,” says Jacobs.

A special dispensation for high-growth start-ups

This proposal is very vague. It may refer to easing restrictions on business visa applicants or local employers importing foreign skills. This is provided, in either case, the intended business is a start-up and promises high-growth potential within South Africa.

“These kinds of applications must always be accompanied by a fact-based business plan, but we must also consider that the government will focus on the classes of business that promise greater economic growth and employment opportunities to locals,” says Jacobs.

Tentatively optimistic

For the most part, Jacobs is tentatively optimistic that, provided they are implemented correctly, the announced initiatives can bring welcome relief to employers hard-pressed to source critical skills.

Although this is a huge step forward for these employers, Xpatweb acknowledges the hurdles that still need to be overcome in this space.

“We will continue to act as an ambassador of the critical skills community, using our research and the results of our Critical Skills Survey to promote meaningful change with policymakers,” says Jacobs.



CONTACT US FOR ASSISTANCE

South Africa Welcomes Foreign Property Investment Despite Widespread Global Restrictions

15/02/2023 in , /by

“Foreign investors can enjoy greater freedom to purchase a wider range of properties in South Africa with fewer and lower investment requirements,” says Victoria Lancefield, Director of Expatriate Tax and Banking Engagement at Tax Consulting South Africa.

However, an important condition is that they bring funds into the country correctly. “Satisfying foreign exchange controls first will ensure one enjoys a seamless investment experience afterwards,” says Marisa Jacobs, Managing Director at Africorp Treasury.

A shrinking global market

The trend towards restricting foreign property investment can be seen around the world. In many countries, this is not new but amplifies already restrictive national and provincial/state policies on property ownership by non-residents.

The reasoning often presented by these governments is that excessive foreign ownership reduces the amount of residential property available to its citizens and drives up housing prices to their detriment. It is suggested that this results in higher levels of homelessness in their country.

“Even so, substantial restrictions are also placed on investment in commercial and industrial property, as well as land,” says Lancefield.

Canada

At the more severe end of the spectrum are countries like Canada, which recently imposed a 2-year ban on foreigners buying residential property within its borders from 1 January 2023.

Although there are fewer commercial property limits at national level, many provincial constraints do exist. For example, in Saskatchewan, foreigners are restricted to 10 acres of farmland.

New Zealand

In 2018, New Zealand banned all foreigners from buying local real estate.

In the same way, strict rules regulate investment in commercial property by non-resident and overseas persons, and even local agents must obtain government consent before buying on behalf of a foreign investor.

Australia

Although foreign investors may buy property in Australia, they must seek approval from the country’s Foreign Investment Review Board (FIRB) and face restrictive regulations on what and how much they can own, whether residential or commercial.

For example, new housing developments are capped at 50% foreign ownership to ensure there is sufficient stock for Australians.

In addition, from 1 January 2023, penalties have been doubled for foreigners who break residential property investment laws.

Mauritius

Even Mauritius, which actively encourages foreign investment in property, places certain constraints on residential property acquisition by non-residents.

Business property investors may be required to obtain special approval from the Prime Minister and Economic Development Board (ECB). They must also provide substantial supporting documents and are limited in the use and disposal of the property, as well as the business activities of the owning company.

These are just four examples of how foreign property investment is being limited in many countries around the planet. This is in stark contrast to South Africa, where overseas and foreign investors are considered no different from resident investors.

Investing in South Africa

Foreign investors are not currently restricted in the type or amount of property they may invest in. They can even buy property remotely over the Internet, without ever setting foot in the country.

Property development is on a continuous rise in South Africa, so there is no shortage and foreign investment is not a concern, rather it is welcomed for economic growth.  South Africa is reputed to have one of the best deeds registration systems in the world, making ownership easy, safe and secure.

According to Carl Coetzee, CEO of BetterBond, South African property remains a good investment for foreign buyers, in spite of economic upheavals. “South Africa’s housing market was able to weather the pandemic, showing resilience as a valuable asset class,” he says.

Instead of declining as expected, house price inflation increased, and the low prime lending rate of 7% made it easier for first-time buyers to invest in property.

With travel restrictions lifted, overseas buyers are once again seeing the investment potential of SA’s property market. This is due to the country’s attractive lifestyle, variety of properties, and good value for money compared to other markets with strong currencies. Hybrid working arrangements have also made it possible for people to live and work in South Africa either permanently or part of the year.

According to Lightstone statistics from 2021, Gauteng is more popular than Cape Town among foreign buyers. However, the Western Cape leads in property development, with Statistics SA reporting building plans worth close to R35 billion approved last year.

Cape Town is also Africa’s top spot for fintech investment and is named by travel experts as one of the 50 must-visit cities in the world. The city is considered the most affordable market for prime residential property and offers more space for money compared to other popular destinations.

“For example, USD 1 million buys just over 30 square metres of real estate in London and New York but 202 square metres in Cape Town,” says Coetzee.

Worth knowing

Non-residents may buy property in their own name or through a foreign company. In the latter case, that entity must be registered in South Africa as an external company and, if its shares are owned by a non-resident, it must appoint a public officer who is a South African resident.

When property is disposed of, the profits from the sale attract capital gains tax (CGT). Foreign investors must therefore register as taxpayers with the South African Revenue Service (SARS) in order to sell their real estate.

“South Africa does not use a flat rate for CGT like many other jurisdictions, so it is important that investors understand how capital gains are taxed here,” says Lancefield.

South Africa does not offer any visa-by-investment schemes, so a visa is not required to buy real estate. However, to live in their property, non-residents need to apply for one of several visas to enter the country, such as a business, work or retirement visa. This may seem inconvenient, but it means they don’t need to finance a large upfront payment that visa-by-investment schemes usually demand.

Lastly, foreign investors are subject to the same fees, costs and regulations as resident buyers, such as transfer fees. They are likewise legally bound by the contract but can sign the agreement in their own country before a Notary Public or at a South African embassy, depending on their region’s legal requirements.

Banking and foreign funds

Foreign investors may use their own funds entirely to buy a property or augment them with a limited loan from a South African bank.

To borrow from a local bank, they must first obtain a certificate from the South African Reserve Bank (SARB) verifying they are eligible for a loan. “Investors should not attempt this application without assistance as not following the process to the letter could delay their purchase,” says Jacobs.

Non-residents without work permits will not be granted more than 50% of the property’s purchase price. Non-residents holding work permits may be granted more than 50% but this is at the bank’s discretion.

Says BetterBond’s Coetzee, “Banks’ bond criteria for foreign buyers varies and they will generally only consider applicants who have banked with them over a certain period.”

However, he says, foreign buyers with an SA ID document or temporary residency could be granted a bond of up to 75% loan-to-value. If the main applicant in a joint application is the higher income earner and is an SA citizen or has permanent residency, the bank may consider a bond of up to 80%.

When applying, they must also adhere to the requirements of the Financial Intelligence Centre Act (FICA) for the purpose of preventing money laundering.

Due to the limitation on loans, investors often bring their own funds into the country to be deposited in a local bank account. If so, they should be sure to retain the deal receipt in case they want to repatriate these funds later.

These procedures are hardly restrictive to astute investors and common to many countries. “After fulfilling them, they are free to enjoy all that South Africa’s diverse residential and commercial property market has to offer,” says Jacobs.



CONTACT US FOR ASSISTANCE

SA Visas May Give ZEP Holders The Best Chance Of Staying In SA

11/11/2022 in , /by

This is according to Marisa Jacobs, Managing Director at Xpatweb, an expatriate and international mobility services firm. “The general but mistaken sentiment among ZEP holders seems to be that it is a pointless exercise because applicants will inevitably not be successful with their applications,” she says.

The reality is that ZEP holders can benefit much more from taking action now than waiting for their permits to expire.

In October, Zimbabwe’s Minister of Information, Publicity and Broadcasting Services, Monica Mutsvangwa, said that less than 10% of the some 180,000 ZEP holders had applied for available South African visas. This was against the previous deadline of 31 December 2022. Because of the low response, the Minister of Home Affairs extended the period of exemption to 30 June 2023.

Protection

It appears evident that the government wants to end the ZEP process itself rather than discourage the presence of Zimbabweans in South Africa. This is so that, as foreign nationals, their stay in the country will be administered through the prescribed visa system and not independently of it.

“The Minister’s published directive on the implementation of the extension expresses sensitivity to the applicants by providing them with concrete protection,” says Jacobs.

This includes the following provisions for ZEP holders during the extension period:

  • They may not be arrested, ordered to depart the country, detained for deportation, or deported for not having a valid exemption certificate label or sticker in their passport.
  • They may not be dealt with in terms of sections 29 (Prohibited persons), 30 (Undesirable persons) and 32 (Illegal foreigners) of the Immigration Act.
  • They may exit and re-enter the country freely provided they meet all the requirements for entry/departure, except for having a valid permit in their passport.
  • They are not required to produce a valid exemption certificate or an authorisation letter to remain in South Africa when making their application for any category of visa, including a temporary residence visa.

“This means they can move around freely and apply for an appropriate visa without fear of exposing themselves to prosecution or bureaucratic discrimination,” says Jacobs.

Benefits of a visa

A ZEP holder only has to look at the limiting conditions reflected in their passport to realise the benefits of applying for a visa.

First, they do not have the right to seek permanent residence in South Africa, regardless of how long they remain in the country. Applying for a visa for which they qualify presents the possibility of one day enjoying permanent residence.

ZEPs also cannot be renewed or extended. The current extension applies to the elimination of the ZEP system altogether, not the expiry of individual permits. On the other hand, visas may be renewed for qualifying candidates.

In addition, the ZEP holder cannot change the conditions of their permit inside South Africa. For example, to be granted a work visa, they would need to return to Zimbabwe and make their application through an SA embassy there. The extension grants them the ability to apply for a visa while still in the country.

Act now

Of course, the deciding factor is that the ZEP holder’s time will run out on 30 June 2023 anyway. So, they have nothing to lose by making their application but nothing to gain if they don’t. Home Affairs has made it clear that no further extensions will be granted.

Finally, it is possible that a backlog will build up nearer the deadline, causing delays in the processing of applications.

“To ensure that your status remains valid post 30 June 2023, apply now to give yourself the best chance of success and plenty of time to plan ahead,” says Jacobs.



CONTACT US FOR ASSISTANCE

Increased Global Hiring and Talent Shortages Bode Poorly For SA Critical Skills

03/11/2022 in , /by

“This means more international competition for South African employers desperate to attract critical skills from abroad,” says Marisa Jacobs, Managing Director of visa and expatriate services firm Xpatweb.

The survey indicates that South Africa exhibits the second strongest hiring intention (38%) among European, Middle Eastern and African (EMEA) countries, after Ireland (42%). However, 78% of local employers reported talent shortages resulting in difficulties filling positions.

The global labour gap also creates greater opportunities for skilled South Africans to emigrate to greener pastures, further eroding the country’s talent base.

There is no doubt that South African employers will have to work harder to acquire the critical skills they need.

Less red tape

Companies who identify foreign talent must act quickly to hook them and cannot afford to be held up by bureaucratic immigration processes that delay entry into the country.

So, it is more important than ever that employers actively involve themselves in the development of legislation around critical skills to prevent the build-up of unnecessary red tape.

Regulations should be fair to South Africans but also pragmatic about the availability of specialised professionals locally. New bills, like the Employment Services Amendment Bill 2022, seek to regulate the hiring of foreign nationals more closely while acknowledging the need to accommodate foreign critical skills.

This is only possible when the needs of critical skills employers are well known to policymakers. “By making their voices heard, employers can be instrumental in a more meaningful and streamlined process for importing foreign talent,” says Jacobs.

One way to achieve this is by participating in Xpatweb’s currently running Critical Skills Survey 2022.

An authoritative reference

Xpatweb has run its Critical Skills Survey annually since it was first launched in 2017. Over time, its survey data has become recognised as an authoritative reference among policymakers.

The firm was asked to present its 2020/21 findings to the Department of Higher Education and Training (DHET) and other participants involved in developing the Occupations in High Demand (OIHD) list. Its data was also referenced both directly and indirectly in compiling the national Critical Skills List, published in February 2022, and amending the final version, published in August 2022.

“As the only private sector organisation invited to participate in these milestone events, we were able to convey the voice of industry to the government’s ear through our survey and interpretation of its data,” says Jacobs. She notes that the firm’s input was well received and carefully considered by the stakeholders.

Her team was also invited to contribute its insights to the development of the aforementioned Employment Services Amendment Bill 2022.

Jacobs says the firm is committed to helping businesses benefit from future legislation by continuing to engage government on open access to critical skills. “The more companies participate in the survey, the more readily their views will be received by policymakers,” she says.

Xpatweb’s survey gives employers the opportunity to be heard by legislators and its data allows them to participate indirectly in shaping immigration legislation.

Invitation

Jacobs invites critical skills employers to ensure their needs are recognised by taking part now.

As the global pool of special talents shrinks, South African employers will need every advantage at their disposal, including efficient legislation that works in their favour. Any delays could force prospective hires to seek employment in countries that are more accommodating.

“With sufficient data of the quality our survey provides, lawmakers can consider a better balance in their approach to critical skills regulation,” says Jacobs.



Take Part In The Survey



CONTACT US FOR ASSISTANCE

Employers Have a Window of Opportunity on their Zimbabwean Staff

12/10/2022 in , /by
Impact on employers of ZEP holders

The battle to retain already trained and effective staff remains a priority for most employers and the announcement by DHA will no doubt create anxiety for any employer of individuals on the existing ZEP dispensation. Any prudent business owner understands the benefit of retaining quality staff as well as the frustration, time and money it takes to recruit new staff.

We have seen active moves by employers to start the process to retain their Zimbabwe employees. With the various Department of Labour audits now happening, employers have effectively one of two choices – start to immediately address the retention of ZEP staff with or have a contingency plan in place for these resources which will soon become unemployable.

Visa options available

During a recent interview on Radio 702, Marisa Jacobs, Managing Director at Xpatweb, SA’s largest independent immigration practice, explained the various visa options available in terms of the Immigration Act that ZEP holders could explore. This includes:

  1. Spousal / Life Partner Visa with Work Authorisation (if married or in a permanent relationship with a South African Citizen / Permanent Resident, subject to conditions).
  2. Relative’s Visa (if related to a South African Citizen / Permanent Resident who is either a spouse, parent or child).
  3. Critical Skills Work Visa (if holder of critical skills as set out in the Gazetted Critical Skills List issued by DHA).
  4. General Work Visa (if offered South African employment and approved by Department of Labour, subject to assessment).
  5. Study Visa (if enrolled /accepted to take up studies at a registered educational institute in South Africa).
  6. Business Visa (where you have your own business and meet the investment and labour requirements).
  7. Retired Person Visa (where the applicant has income exceeding R37,500 per month from a pension, irrevocable annuity, or other income source).

After applying for a mainstream category, eventually a Permanent Residence Permit can be secured.

Next steps

With the countdown until 30 June 2022 underway, employers are encouraged to support their ZEP holder staff by submitting their application as soon as possible heading the call by the Minister.

The process to apply for any of the above visa categories can be administratively burdensome and costly where you get it wrong. This is where proper planning and experience of the visa process, along with a solid relationship with DHA is worth its weight in gold, as it will greatly improve the probability of a successful application.

Marisa Jacobs and minister of DHA



CONTACT US FOR ASSISTANCE