Case Interview: Problems raised by Entrepreneur Visa holders
In March of 2021, we followed up with a number of Entrepreneur Visa holders to check what they think of the visa. We asked them some questions that would help you get a full understanding of what you’d be getting into. Eight respondents answered our informal and blind survey to protect their identities.
We asked: “Do you think that a one-year visa is enough in order for you to register your business, so that you could continue to stay and build your startup in Taiwan?” to which seven respondents answered “No, it is not enough” and one answered “Yes, it is enough”.
Why a one-year visa is not enough
One respondent said perhaps if a foreigner has been in Taiwan, long enough to have known Taiwanese culture, speak some Mandarin and have a fully-scalable business plan ready to go when registering his business immediately after receiving the visa, then, perhaps, one year could be doable.
“However, this isn’t the case for most applicants. Often, you’re applying from abroad (which is what most were doing pre-COVID) and even more often, entrepreneurship isn’t a linear route to follow where everything can be predicted in advance. Coming from abroad, you’re faced with challenges such as the language barrier, cultural differences, issues when trying to access banking systems and other tools that make running a business vital. In order to meet the qualifications for extension, one needs to open and register a company almost immediately after receiving the visa, or else any business activities you do won’t count towards the extension qualifications. This is not including the fact that there are many fees and initial expenses involved in the visa application process and in registering a company. Startup founders and new entrepreneurs are often bootstrapped and on a tight budget,” the respondent explained.
Another respondent said, “Not enough time to handle all the paperwork and bureaucracy and also establish product-market fit and earn enough revenue to keep going on. There are also numerous other problems with the visa, like the fact that it doesn’t grant you a work permit, even for your own company.”
“The way it is structured currently, there is no way you can apply, put together your business, AND hit the 3 million turnover mark at the end of year one to apply for renewal. This means you have to subsist on visa runs until you’re fairly confident to hit the turnover limit,” said another respondent.
A respondent said, “The company opening procedure is taking too long. Clear example: I am building a tech company, with a mobile application, I can’t publish it and therefore test the market before the company is open…”
Meanwhile, another respondent said, “So many step need to happen to be able to even register a new company and get started – quarantine, ARC application, opening up a bank account, finding accounts / folks to help file the necessary paperwork, finding a business location, etc.”
How long should Entrepreneur Visa be
Five respondents said the government should make the visa have a two-year validity, while three respondents said the visa should have a validity of 3 years.
When asked for their reasons for coming to Taiwan, everyone has a different answer.
One respondent said “Because it’s a beautiful, friendly, safe, clean, welcoming and innovative place to be,” while another said “I used to live in Taiwan and preferred the quality of life to San Francisco.”
Another said he was just here to explore Taiwan but “I found out Taiwan is an ideal place to start a business.” A respondent said he came to Taiwan by accident and grew to love it here, and prefer to stay here. He however said “The EV [Entrepreneur Visa] alone is not regionally competitive and enough reason to want to come here.”
Two respondents said they initially came for Mandarin lessons, one followed someone who came to Taiwan and another came to avoid Covid19.
Seven respondents said they plan to stay in Taiwan for more than 5 years.
Why would make EV holders leave Taiwan
We asked the respondents, “Will you move to another country if your startup fails within the first year of building it under your EV? Where and Why?”
“No, because I wish to stay here. It puts some of us in quite a bind though, because we have to secure some other form of legal residency, and that is deeply problematic from a business perspective,” said one respondent.
“It [my startup] won’t fail. It’s growing. The only issue is meeting residence requirements. If I have to leave Taiwan, I’ll most likely go back to the US until the pandemic is over due to the travel restrictions,” said another.
Another respondent said, “I hope I will not have to, but if I were to leave Taiwan for a visa issue, it would be for South Korea, Thailand or Japan.”
“I will have to leave because I won’t be able to stay. I will go back to the US where I can find a job and work on my business.”
Are Entrepreneur Visa holders in Taiwan only because it is a safe place while there is Covid 19?
“Yes, plenty have taken advantage of the loopholes, and why wouldn’t they? The EV on its own merits is a poor choice for startup founders, and the only reason it has gotten such a boost is because various coworking spaces are willing to sponsor just about anyone for cash. If it weren’t for that and the pandemic nobody would even apply for the program.”
“Some of them. I’m sure, yes. But if they’re willing to pay for a scheme of this sorts and to support Taiwan through taxation, I don’t see a problem with this.”
“Yes and no. They may have started staying in Taiwan because they thought they had nowhere to go, but the longer they are here the more they realize what a wonderful opportunity to create a business in Taiwan.”
“I think this is the case for many who applied in 2020. I’m sure if Taiwan wasn’t the beautiful, friendly, welcoming, safe, clean and innovative country it is, people would not be thinking of staying here. Even fewer people would be thinking of starting a business here. What if the people who sought refuge in Taiwan on the entrepreneur visa during the pandemic could have been empowered to build the businesses they were thinking of creating? If they had absolutely no interest, that’s one thing. But they still want to stay in Taiwan, pay money into the economy and stay here. That is already a reason to give the EV program more attention and support, because it attracts people who are creative, talented and willing to contribute something to Taiwan, but may not fall into other visa categories.”
“I suspect it’s a mix because there were quite a few digital nomads in Taiwan when borders started closing.”
“I don’t think that’s the plan for all EV holders, although some of them are probably in that situation but it’s the incubator role to make a selection beforehand.”
“Yes – I’m one of those folks, but have plans to still establish a company here and meet the requirements for extension.”
Additional recommendations on how to improve the EV program
The EV program requires a complete overhaul to be at all competitive in attracting entrepreneurs or making any sort of contribution to Taiwan’s socioeconomic development, said one respondent.
“It’s almost as if it’s built with big business in mind, not scrappy startup founders. Frankly it’s just another one of those things that looks good on paper and gives off the aura of innovation and competitiveness but in substantive terms, by any relevant performance metric (# of applicants, # of renewals, # of companies founded, total revenue of those companies, whatever), it is a total failure,” he said.
He recommended,” Consequently, we shouldn’t be misleading foreign entrepreneurs into thinking this program is a good option for starting their business in Taiwan. It might serve as a stepping stone, but for the amount of time/money invested there are other, better options for residing in Taiwan.”
Another respondent suggested the government to “review their requirements again and be a bit more open to other types of business besides technology, there could be a huge opportunity for more companies to come to Taiwan.”
A respondent suggested it would be good to see more of a focus on founders actually building new companies as opposed to entrepreneurs looking for ways to bring existing businesses to Taiwan.
A rude respondent who just followed someone to Taiwan and took advantage of the Entrepreneur Visa ranted a valid point that “the major issue with the EV is that the rules regulating it are extremely unclear, and no I’ve seems to know about it.”
“Can you pay yourself with an EV (no you can’t, it took me hours on the phone with labor and immigration to figure this). How many EV can you tag to an existing company (3 at the same time, took my friend’s company months to work that out). Why is NHI sending letters about company managers not having NHI when you can’t get NHI with an EV?” he said.
Another respondent meanwhile said “I think we should have some criteria to work with incubators for the EV holders that demonstrate some kind of business starting. But the actual criteria, even in one solid year, are too high, so in a few months (because of the company creation process) it’s really impossible to meet. I hope Taiwan will make some changes on this EV holder visa so the startup scene will be more and more dynamic from a worldwide point of view.”
“I think Taiwan is one of the most generous countries by offering visas, such as the entrepreneurship visa, to be a pathway and safe haven to escape Covid-19. That said, I do find the requirements for extension (of the EV) to be a bit archaic and counterproductive to one of the intentions of the visa in the first place. I have this view despite the fact that for my purposes, I’ll fairly easily be able to meet one of the three current requirements to extend my visa,” said another respondent.
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