The Federal Council has submitted a draft law for consultation concerning third state nationals who have obtained a master's or doctorate from a Swiss university in a field where there is a shortage of qualified personnel. It aims to establish the necessary conditions to enable such persons to remain in Switzerland without excessive formalities and to be employed. In such cases, the maximum annual number of residence permits may be waived if their employment is of overriding scientific or economic value. In addition to a legislative amendment, the State Secretariat for Migration (SEM) has revised a binding directive for the cantons, which significantly improves the access of start-ups to qualified personnel. The revision of this directive is based on proposals from the Swiss Entrepreneurs & Startup Association SWESA.
The following answers are given by Philipp Berger, Head of the Labour Market Admission Division, Immigration and Integration Directorate at the State Secretariat for Migration.
Which provisions apply to start-ups regarding the issuing of residence and work permits to third-country nationals?
Philipp Berger: It is worth noting first of all that the term "start-up" does not exist under Swiss law on foreign nationals. A distinction is made between self-employment and salaried employment. For start-up founders, admission is generally granted in the context of self-employment.
Third-country nationals may obtain authorization to engage in self-employment if it is in the general economic interest and if the necessary financial and operational conditions are met. The individual concerned must meet the personal requirements for self-employment (Selbständige von Drittstaaten / Citizen of a third state), and comply with the maximum annual number of residence permits granted to workers from third countries. Such permission is initially limited to two years and may be extended provided that the objectives set out in the business plan are met.
If a third-state national is to be employed in a start-up that has already been established, the conditions for salaried employment apply. These persons are also subject to the maximum annual number of residence permits granted to employed third-state nationals. Additionally, the legal provisions regarding the country's economic interests, prioritization of Swiss and EU/EFTA workers, salary and working conditions, personal conditions, and housing must be met before a residence and work permit can be issued (Basis for admission to the Swiss employment market).
Why did certain adjustments have to be made during implementation?
Berger: The relevant enforcement authorities in the cantons and the SEM have been flexible in their approach to the particular conditions under which start-ups launch their business activities or recruit new employees on a case-by-case basis. It showed that greater legal certainty would be beneficial. In particular, founders of start-ups in Switzerland generally had little or no idea at the time of founding whether or not they would meet the requirements for residence and work permits. Therefore, measures had to be taken in this respect. The recently implemented formal amendments strengthen start-up founders' legal security.
Where have start-up simplifications been introduced?
Berger: The amendments focus on the following three areas: Firstly, a residence or work permit can now be issued to people involved in a business that takes part in a cantonal or national support program even before the actual creation of the business. Entry in the commercial register can be made within three months.
Secondly, it is expressly stated that employee shareholdings, which are common in companies and start-ups, can be taken into account when assessing remuneration and working conditions. Shareholdings must be a reasonable proportion of the base salary.
Thirdly, cantons have more flexibility to extend a residence permit after 24 months. They can now also grant an extension in cases where the objectives set out in the business plan have not yet been fully met, but the company's prospects remain promising.
Where were these simplifications implemented and when did the new provisions come into effect?
Berger: The simplifications for start-ups have been implemented by adapting the directives of the Foreign Nationals and Integration Act (FNIA) (Weisungen und Erläuterungen Ausländerbereich – Weisungen AIG). The FNIA directives ensure a coordinated approach between the Confederation and the cantons and they are regularly discussed with the cantons. This ensures that the implementation is as uniform as possible throughout Switzerland. The new measures took effect on November 1, 2021.
How do these changes affect start-ups?
Berger: The new features take into consideration the individual circumstances of start-ups and help to remove obstacles. Legal certainty is reinforced for start-up founders and young companies wishing to recruit a third state national. The third point specifically concerns start-ups whose development has slowed down somewhat, but whose long-term prospects for success are promising. Even with these changes, compliance with the existing FNIA provisions is still ensured.
