With attractive cities like Cape Town (pictured above), South Africa can certainly attract remote workers
Hailed as an evolution in South Africa’s immigration policies, the new regulations to attract skilled and remote workers are a shot in the arm for the country’s economy, says South African Home Affairs Minister Leon Schreiber.
At a conference, Schreiber said that the new regulations not only offer certainty on remote work visas but also introduce general work visas and a new points-based system for critical skills, which promise to boost GDP growth by 1.2 pc, with every additional skill creating seven new jobs for South Africans. Schreiber announced the new regulations and unveiled initiatives to grow tourism, investment, the economy and job creation.
Citing independent research commissioned by the South African Reserve Bank and the International Food Policy Research Institute, Schreiber said that South Africa’s annual growth rate could triple by attracting 11,000 highly skilled individuals, while increasing tourist arrivals by 10 pc would boost annual GDP growth by 0.6 pc.
He added that to quantify the potential gains, the researchers showed that just a 1 pc increase in tertiary-educated employees, primarily driven by skilled immigration, could boost GDP by more than 1.2 pc and overall economic welfare by the same amount.
He said that lower-skilled workers would also benefit significantly, with employment gains exceeding 1.25 pc. Tax revenues would increase by more than 1 pc, which adds up to around ZAR 21.55 billion (USD 123 million).
The South African minister said that by laying out the welcome mat for these highly skilled and experienced professionals, the country gets greater bang for its buck because their wages are likely to surpass the average for tertiary-educated South Africans.
Leon Schreiber
For example, if the average highly skilled and experienced immigrant earned three times the average tertiary wage in South Africa, then only about 11,000 migrants would be required to generate the above outcomes, which represents 0.33 pc of the skilled labour force, 0.07 pc of the total labour force and 0.02 pc of the population, said the report by South African Reserve Bank.
Much more open immigration policies for highly skilled labour appear to offer “high upsides with near-zero investment requirements as well as limited downsides”, noted the report.
“Highly skilled and experienced immigrants will spend money on housing, food, services and so forth. Substantial positive multiplier effects are essentially guaranteed. And their magnitude can be enhanced by policies that augment the share of total earnings of highly skilled migrants that are spent in South Africa as opposed to remitted. Encouraging highly skilled migrants to come with their families is one good example,” the report said.
Under the new rules for nomad work visa, the minimum income requirement for a remote-working foreigner is ZAR 650,976 (USD 37,225) per annum, double the median income in the formal sector, which is considered sufficient for living in South Africa while earning a salary from abroad. Additional points are awarded for salaries above ZAR 976,000.
They also require that foreigners from countries with double taxation agreements do not need to register with SARS, unless they are present in South Africa for more than 183 days within a 12-month period. But, foreigners from countries that don’t have double taxation agreements must register with SARS for tax.
The new rules outline a points-based system, applicable to general and critical skills workers, with a 100-point threshold that considers qualifications, work experience, salary offer, local language skills and offer of employment. The rules also mandate that applicants for these work visas must meet all other prescribed requirements, including police clearance certificates, proof of accommodation, return flights and medical reports.
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