A new generation of tech entrepreneurs in Africa are exploring new horizons, and Europe is welcoming them with open arms.
In other news, Nigeria’s Central Bank finally grants Diasporans some relief, and Apple might be hiking app-store prices in three African countries.
Let’s get to it.
3 big things:
- Europe’s digital visas
- New Naira rules
- Apple’s new review
How digital visas are building new home bases for Africa’s tech entrepreneurs
The short: Africa’s tech ecosystem is minting the next generation of successful entrepreneurs and granting them access to global opportunities.
New priorities: Top on the list for founders and operators is obtaining dual residency status or being bi-coastal. Europe is at the forefront of this wave and has introduced special visas to attract talent and increase revenue.
The rollout of these visas creates new possibilities for tech entrepreneurs and enables them to build global companies – a decision made easier by unfavourable macro-economic conditions back home.
Here are the countries fuelling Africa’s Japa (migration) wave:
Estonian Startup Visa:
Estonia offers a long-term startup visa for up to 12 months, which can be extended by six months. If a startup is fully established, the founders can apply for a temporary residence permit for up to 5 years, forfeiting the general investment requirement of €65,000.
After residing in Estonia on a temporary residence permit for five years, founders can eventually apply for permanent residence and citizenship.
However, Estonia’s a proud country, so if you want their citizenship, you’ll have to renounce yours — no free lunch.
Portugal Digital Nomad Visa
Portugal is widely recognised as a highly globalised and peaceful country with an outstanding reputation and exceptional quality of life, especially for young entrepreneurs. The Digital Nomad visa attracts remote workers to the country and has helped tech entrepreneurs set up shop and start new lives.
Remote workers only need to earn at least four times the minimum wage (€750) to be eligible to apply. Nomads can apply for a temporary stay visa for up to a year or a residency permit that can be renewed for up to five years.
After five years, beneficiaries can apply for permanent residency and Portuguese citizenship if they meet all requirements.
The 0-1 U.S. Visa
The O-1 non-immigrant visa, often called the “genius visa,” is for individuals with exceptional abilities in the sciences, arts, education, business, or athletics or with proven records of notable achievements.
This work visa enables tech entrepreneurs to live and work in the U.S. while they build their startups. The O-1 visa is also an attractive option for some founders because it puts them in a great position to apply for permanent residency as a long-term strategy.
The O-1 visa can be converted to a green card – a document showing a non-immigrant can legally reside in the U.S. indefinitely.
However, there’s no citizenship at the end of this road. The U.S. is notorious for passport exclusivity.
The UAE Golden Visa
The UAE Golden visa is a long-term residence visa which enables foreign talents to live, work or study in the UAE. Tech entrepreneurs may get a Golden visa for up to five years if they own a startup or an economic project. They also need approvals from an auditor in the UAE, government officials, and an accredited business incubator.
Expatriates cannot obtain UAE citizenship using the Golden Visa route. However, they can still apply for citizenship by naturalisation after 30 years of living in the country.
This is one of the most popular visas fuelling migration to the U.K.
Individuals can apply if they are exceptional talents or show exceptional promise. Aspiring entrepreneurs must show future leadership qualities and get solid recommendations from three senior colleagues in the tech industry. Then they can apply to get a visa for up to 5 years.
So far, 3000+ Tech Nation visas have been endorsed, with beneficiaries from India, the U.S., and Nigeria.
Beneficiaries of the Tech Nation visa can settle permanently in the U.K. after three or five years, depending on their application. It’s one of the fastest tracks to citizenship in Europe.
Final thoughts: Digital visas have unlocked access to the rest of the world for people with digital technology skills. Africa’s tech entrepreneurs are setting up hubs globally, working remotely, establishing companies, and extending their talent to other economies.
Nigeria’s Central Bank approves Naira remittance for Diasporans
The short: The Central Bank of Nigeria (CBN) has directed International Money Transfer Operators (IMTOs) to begin remittances payout in Naira to beneficiaries. Finally!
Why it matters: Nigerians living abroad remitted $19.8 billion back home in 2022, about 5% of the country’s gross domestic product (GDP) but the first half of 2023 saw only $952 million in diasporan remittances.
Since December 2020, Nigerians abroad could not directly send money from foreign accounts to Naira accounts. It was a headache remitting Naira, but the commercial banks made some good money from the fees they charged for receiving dollar remittances.
How it worked: Recipients needed to open a domiciliary account with a commercial bank, withdraw dollars and take it to currency exchange merchants to convert to Naira at black market rates. This process was worse off by the Dollar scarcity, so it’s safe to say Nigerians in the diaspora are clinking glasses at this new development.
Final thoughts: CBN’s new directive means more money can flow seamlessly from foreign accounts to Naira accounts. Nigerians can save money on foreign exchange transaction fees, and the demand for foreign currency will reduce – which could help stabilise the Naira’s value.
Apple might be hitting users in Egypt, Tanzania, and Nigeria with new prices
The short: Africa is ramping up tax regulations, foreign exchange rate adjustments, and the implementation of Value Added Tax (VAT), and Apple is paying attention.
Why it matters: Apple hasn’t disclosed if this update will lead to an increase or decrease in the prices, but it is safe to predict that in-app purchases are about to become more expensive in these countries.
Recently, Tanzania implemented an 18% VAT plus a 2% digital tax, while Egypt instituted a 14% VAT. Similarly, Nigeria imposed a 6% tax on turnover for offshore companies providing digital services to local customers in Nigeria. And if there’s one thing Apple does in these situations, it makes sure consumers pick up the tab.
Final thoughts: App developers in these countries will potentially hike prices to bear the brunt of these changes. For users, payments for in-app purchases, including auto-renewable subscriptions, will increase to reflect the new tax rates and updated prices.
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