Recently, French diplomats warned that South Africa’s strict visa requirements are driving investors away.
In addition to this, Western Cape Provincial Minister of Finance and Economic Opportunities, Mireille Wenger, said that a key obstacle attracting investment and expanding business is “the broken South African visa regime.”
“To facilitate foreign investment, companies need to be able to easily access South Africa and those who apply for critical skills visas typically help to develop new and existing sectors, in line with international best practice or by helping to new industries through skills development,” said Wegner.
Companies aiming to operate in the country must invest a minimum of R5 million and ensure at least 60% of their employees are South African.
However, applying for a work visa has often been described as a lengthy and complex process, exacerbated by an inefficient paper-based system that may take months.
Once those abovementioned boxes are ticked, the process is likely to be stalled by an existing backlog in visa applications.
Recently, the Western Cape government said that over 4,500 jobs and R1.6 billion in economic value are at risk of being destroyed due to continued backlogs and delays at Home Affairs in processing visas.
“These delays relate to processing and finalising of a small number of critical skills, spousal work visas, spousal, life partner, and permanent residency visa applications for training experts, who are needed to upskill and train employees in the sector, thereby enabling the creation of more South African jobs,” said Wegner.
The Western Cape Government previously conducted a survey to gauge the effectiveness (or lack thereof) of South Africa’s visa application process.
They engaged with around 150 business in sectors including ICT/Technology/Software service, tourism, finance and business services, manufacturing, agriculture and business process outsourcing.
A critical finding of this survey was that 78% of respondents rated the immigration application system in South Africa as “very poor” compared to other countries the respondents have operations in.
Another finding was that 26% of businesses moved their operations overseas as a result of the serious challenges they faced with the national visa system.
Other key results of the survey include:
Reasons for Visa Requirement:
Work purposes, particularly for employing critical skills not available in South Africa, and for businesses needing to employ foreign staff.
Top Three Visas Applied For:
Work visa (19%)
Critical skills work visa (18%)
Immigration visa (15%)
Top Three Complaints/Issues with Visa Application System:
Delays in approval process (17%)
Applicants not receiving feedback on applications (14%)
Lack of an escalation mechanism for complaints (10%)
Impact on Businesses Affected by Visa Application System:
Time delays (25%)
Cost implications (22%)
Inability to hire required skilled workers (21%)
Top Three Measures Taken by Respondents to Address Challenges:
Moving operations abroad (26%)
Employing fewer staff (17%)
Scaling down operations (17%)
“The fact is that the current visa regime is a significant deterrent to investment and the expansion of existing businesses, costing jobs and economic growth right at a time when we can ill-afford to lose either,” said Wenger.
In hopes of easing these constraints recent regulations replaced the highly-contested critical skills list with a new points-based system and introduced the remote work visa class.
This was received positively by businesses in South Africa, with the Consumer Goods Council of South Africa saying that they should ease the administrative burden that international companies with businesses in the country face when hiring skilled foreigners.