Learn about the legal framework and financial policies in your host country

Migrant entrepreneurs face various challenges relating to the regulatory framework throughout the EU, including:

• Self-employment in regulated industries is often subject to certification requirements and procedures that can make it difficult for skilled migrants to start new businesses. If re-training requires financial resources, this is further exacerbated by their lack of access to funding. As a result, migrant trajectories tend towards markets with low barriers to entry and low-end required formal qualifications.
• The administrative burden related to the legal business environment has an increased negative effect on migrants due to their potentially limited language and administrative knowledge.
• Understanding the host country’s legal and institutional framework is difficult, as it is often different from migrants’ business knowledge accumulated in their home country. Language difficulties, cultural differences, and limited knowledge of the regulations which govern entrepreneurship make starting a company harder.
• Another challenge from individual point of view for migrant entrepreneurs is obtaining residence status for themselves and family members. This uncertainty impedes investment in human capital and therefore participation in migrant entrepreneurial services.

In addition to the above, there are several areas that could be improved in order to provide migrant entrepreneurs with legal certainty, namely:

• A provision must explicitly state in the legislation that all government-supported programs for start-up and business promotion will be opened for migrants and that equal treatment is guaranteed.
• Implement favorable regulations (at local, national, and supranational levels) by identifying regulatory obstacles impeding immigrants from setting up business, including rules and regulations that connect self-employment with educational requirements, permits and registration; and validating previous formal qualifications if required for particular types of businesses.
• The compliance between national and regional/local legal framework and policies must be improved. In some cases, on a local level some restrictions could negatively affect migrant business such as access to local resources, permissions, fees, administrative provisions particularly required for non-citizens, etc.
• Cutting red tape generally, but also removing aspects that would specifically impact migrants would improve their access to entrepreneurship.
• Favorable treatment of family members of migrants would help attract migrant investors.

The experience suggests that migrants do not take advantage of receiving support from the existing institutional frameworks for business support such as: SMEs agencies, chambers of commerce and industry and NGOs. Some of the notable regulatory challenges are:

• On an institutional level the regulatory framework varies for different categories of migrants, particularly migrant-investors, asylum seekers and refugees. While the legal framework guarantees open access to migrants to start and run a business, this opportunity exists only to those migrants who have already a legal status in the recipient country. The legislation in all EU countries gives priority to migrant- investors who are eligible (under different conditions) in each country for permanent residence status as well as citizenship. In this case, starting a business in the host country is an instrument or motivation for migration while in all other cases migrants must have a valid residence permit in order to start a business.
• Another institutional challenge is that Local and Regional Authorities receive insufficient support from central governments, with their role in the integration process not being clearly recognized in legislation, despite it being crucial. (Regulatory Framework on Employment and Funding for Migration and Integration Policies in the EU – European Union – Committee of the Region).

NGOs, who are main actors in the provision of migrant entrepreneurial services (especially where governments have retreated), are often at least partly funded by local and/or central governments. This support is dependent however on frequently changing governments and public opinion. This means that even high-quality services provided to migrant entrepreneurs may not exist from one year to the next. Funding cycles can also be short, meaning that NGOs will struggle to attract and retain high quality staff where future funding is uncertain. The competition between NGOs increases particularly in a situation of squeezed financing, creating a high turn-over of service providers.
Widening NGO involvement in migrant entrepreneurship promotion would enlarge the public support for these enterprises and could help them to achieve better market positioning. The German experience represents an efficient good practice giving particular attention to migrant entrepreneurship in priority regions.

The NGO sector does not have mechanisms in place to ensure high quality service provision to migrant entrepreneurs. The fact that the sector is mostly unregulated means that the services provided by organizations may not adequately address the specific needs of would-be entrepreneurs.

Migrant entrepreneurship is an important tool for the integration of migrants and their dependents in the host society and economy. Although the data suggest large numbers of migrants are currently opting for self-employment instead of paid employment, there are obstacles that need regulatory and policy responses.

• Entrepreneurship rarely plays an important role in the integration policies of member states.
• Entrepreneurship promotion policies for migrants are not a priority for any of the countries in the consortium.
• Policies related to migrant entrepreneurship are not integrated in the legislation. They are program and project based. The main challenge of this policy approach is the consistency, continuity and sustainability of these programs and their results.
• Policies governing migrants and refugees are usually devised at a national level. This is especially the case for Greece, France, Hungary, Poland, and Sweden, who often bypass regional authorities although local authorities are involved in implementing policies. In the newer Member States and to some extent in France, policies are often not specifically targeted at migrants but rather migrants may benefit from employment or entrepreneurship policies targeting the wider population.
• In many countries, the national authority responsible for migration and integration policies is the Ministry of Internal affairs, who is dedicated to overseeing the implementation of policies at regional or local levels. The limited capacity of these institutions is echoed by that of the NGOs. There are indications that Local and Regional Authorities receive insufficient support with their role in the integration process not being clearly recognized in legislation, despite them playing an important role.
• Further decentralization of migration policy and the provision of more resources and roles to the local authorities would also allow the field migrant entrepreneurship to develop and grow more easily.