2019 LOOK AHEAD: Global Business Immigration and Mobility Trends

January 11, 2019

By Kent O’Neil

Most economists and geopolitical analysts see 2019 as a relatively calm year. While risks of significant shocks to the international business climate are certainly present, and the new year will undoubtedly see mounting potential of major shocks in years to come… most of what we see in the road ahead for 2019 appears to be reasonably navigable. That’s not to say there won’t be significant disruptions – both positive and negative – in numerous destinations around the world. 

Specifically, in the field of global business immigration and mobility – change primarily tends to come incrementally; but there are those unexpected changes born of the turbulent times in which we live. So in the following look ahead for 2019, you’ll see some familiar long-term trends but hopefully also a helpful heads-up of what to watch for as we journey into this new year.

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GLOBAL TRENDS

Familiar global macro trends will continue to drive change in both business and legal environments across the world – bringing change to the way international employee assignments and business travel are structured.

Globalism vs. Nationalism: Economics and technology will continue to drive the world economy to globalise. Economic advantages available in growing foreign markets and foreign talent will continue to favour companies embracing the increasingly global nature of business. On the other hand, the segments of local populations left out of the benefits of globalism will continue to cause political and cultural nationalist and populist movements to push back. Caught between these forces, governments in many countries will respond with protectionists policies – including restrictions on business immigration.

Technology: Technology will continue to drive globalisation with increased productivity, automation, and communication – allowing companies to operate more easily across international boundaries. Technology will also continue to be further employed by governments to increase the utility and security of immigration and border entry processes. Watch for greater prevalence of electronic visas, biometric collection and registration, automated background checks, technology enhanced vetting of visa applications, and electronic tracking of both local and foreign residents through electronic ID systems and databases.  

Talent Wars: Competition for top talent will continue to be keen – especially in science and technology fields. The war for talent will be fought on both a company scale and a national scale. Companies will increasingly use international work assignments and business travel opportunities as a means of attracting young, highly skilled workers who expect international experience as part of their career development. Many forward-thinking governments will embrace immigration-friendly policies as a tool of economic growth and support local companies in attracting top foreign talent.

Long Term vs. Short Term: Cost concerns and immigration restrictions in some countries will cause many companies to increasingly restructure international assignments from the traditional long-term expat assignments into more hybrid short-term business travel and remote working arrangements. Expect both demand and supply of business visas to increase as more long-term residence and permanent residence opportunities are restricted in some countries.

REGIONS TO WATCH

While the above global trends cut across all countries of the globe, there are also some country specific developments already visible on the horizon to watch.

UNITED STATES | More of the Same…

On the traditional law-making front, it will be a quiet year in the U.S. with government gridlock as the status quo. With the two houses of Congress each held by narrow majorities of opposing parties, and a controversial and embattled President, any game-changing major legislation will be difficult. Heated debates over illegal immigration will overshadow any reasoned debate on legal immigration.

For business and employment-based immigration, watch for President Donald Trump to continue to direct policy primarily through executive orders and memoranda and administrative enforcement. Watch for continued heightened scrutiny of H-1B visa applications – including high rates of denials and requests for evidence. Higher levels of workplace immigration enforcement will also continue. Also watch for potential action by the end of 2019 on new H-1B lottery rules and processes based on last November’s Homeland Security recommendations. 

The newly Democrat-controlled House of Representatives will flex its political muscles against the Republican President, but expect the United States-Mexico-Canada Agreement (USMCA) (NAFTA 2.0) to be ratified. Provisions regarding business immigration and travel will remain essentially the same as current.  

UNITED KINGDOM | Brexit Begins?

The Brexit of the UK from the European Union is still scheduled to take place 29 March, but the form that the separation takes and whether it could be postponed or even stopped altogether remains very much in question. The vote in Parliament on the controversial separation deal is now scheduled for 15 January, but the chances of passage in its present form are slim at best. A no-deal Brexit is now looking the more likely outcome. While still an outside possibility, there is gathering support for another referendum for the British electorate to vote on whether to proceed with Brexit at all.

The UK government is already rolling out its Settlement Scheme to normalise the immigration status of EU nationals in the UK, and a White Paper setting forth the government’s plans for post-Brexit immigration has been published. However, all of the questions surrounding – if, when, and how to Brexit – keep those plans up in the air at the moment. Minor changes were made to the Tier 2 restricted Certificates of Sponsorship system in 2018, but more are needed that we’re hoping for in 2019.

On the more positive front, the government has indicated it will be launching a two-year seasonal worker pilot scheme for non-EU workers to benefit the agricultural industry in 2019. Also, watch for new Innovator Visa and Start-Up Visa routes to be introduced this year.

EUROPEAN UNION | United or Untied?

Brexit obviously tops the list of EU concerns as well. The same uncertainty that plagues the UK will reign on the EU side until the UK formally adopts a final position on separation. The EU member states are expected to reciprocate whatever position the UK takes on issues like immigration and freedom of movement.

Brexit-caused economic lags will impact the economies and business climate on both sides of the English Channel, but the EU will obviously carry on without the UK. While 2019 is not likely to see major changes in the EU beyond Brexit – seeds of coming riffs may already be germinating.

European Parliamentary elections will be held in May this year and have the potential to move the EU further away from unity. Rising populist and nationalist movements in several member states are increasing local Euroscepticism and dissatisfaction with the union, and the attention of the leaders of the three most influential EU nations are focused internally and away from Europe-wide concerns – including immigration and visa reform. In Germany, Chancellor Angela Merkel is politically weakened and has already agreed to step aside for a new leader to emerge. In France, President Emmanuel Macron faces plummeting popularity and fierce opposition from the electorate to his reform-minded policies. Populist movements and officials in Italy are already undercutting support for the EU there.

Specifically, on the immigration and mobility front, watch for the various EU member states to begin adopting (due by July 2020) the reforms to their Posted Worker Rules brought by last years’ EU directive. The package of proposed revisions to the common visa code (primarily regarding the Schengen Visa) which resulted from last January’s comments process continues to work its way through committee. Numerous other immigration related legislation are in process but a good distance from potential implementation.

CANADA | Open for Business

Canada will continue to benefit economically from its pro-international business, immigration-friendly policies. The plan announced last year to welcome more than one million new immigrants by 2021 will continue with a 2019 target of 330,800 – an increase of more than 20,000 from 2018 – with the majority of those coming in the Federal Skilled Worker category and other provincial employment-based programs.

In federal elections scheduled for October of this year, the issue of immigration and the policies of Prime Minister Justin Trudeau and the Liberal Party will clearly be a central issue in the debate. Early polls have the Liberals up by four percentage points over the Conservatives.   

No major shifts in immigration policy are expected this year. The biometrics collection program which began in July last year will expand in 2019 to include nationals of more countries, as well as in-country applications. Business travellers are also reminded that changes to Canada’s DUI law took effect in December and will affect eligibility for entry and visas into Canada in 2019.  

MEXICO | Making Mexico Great Again?

Inevitable comparisons have been made between Mexico’s newly inaugurated (1 December) President Andrés Manuel López Obrador (commonly referred to as AMLO) and his colourful colleague to the north – President Trump. Both campaigned as populists and outsiders, both are outspoken, both see themselves as reformers… but further comparisons are unhelpful. Mexico is not the U.S.

Unlike Trump, AMLO and his Morena party enjoy comfortable majorities in both houses of Congress, giving him wide latitude to change policy going forward… or back, as his critics suggest. Obrador appears more a pragmatist than an idealist. So predictions of policy changes for the coming year are unpredictable. Highly critical of the recent economic policies of opening, privatisation, deregulation, and fiscal conservatism – watch for Obrador to make reforms chipping away at those.

On business and skilled immigration, there is currently nothing on the radar. But the significant shift in governing approach of the new administration makes the issue one to watch closely this year.  

JAPAN | Opening by Necessity

In Japan, the government enacted a significant new immigration law in December aimed at attracting 345,000 foreign workers over the next five years. The new law brought two new visa types: a new five-year visa for unskilled workers and a new visa for the highly skilled which is renewable indefinitely. In a country not traditionally known as immigration-friendly, the new law was a bold step to address a mounting demographic problem. Japan’s population is currently dropping by about 400,000 each year due to aging and low birth rates – resulting in significant labour shortages and a stagnating economy.

How successful the plan is will likely depend on whether the government continues with reforms of labour laws beneficial to foreign nationals. Out of economic necessity, watch for the Japanese government to continue subtly introducing foreigner friendly reforms and more liberal immigration policies.    

CHINA | Trade Wars and Talent Wars

In 2019, trade and economic friction will continue between China and the U.S., and that friction will continue to increase costs for businesses around the world. Watch for the tension to only increase in 2019; talks will continue, but actual concrete action resolving trade and market issues is not likely.

China’s aggressive Belt and Road initiative will continue to exert greater economic influence around the world as China invests in infrastructure projects in developing countries. China’s influence as an economic partner will increase in Asia, Africa, and South America.

Back home, China’s highly state-regulated economy will continue to be a difficult market for foreign businesses to crack. The only sign of opening internally in recent years has been China’s greater openness to immigration of highly-skilled foreign nationals. To compete in the global talent wars and achieve other goals on the technology front, watch for overall Chinese immigration policy to subtly continue to embrace immigration.

However, one recent development to watch is an increase in enforcement of local laws against foreign nationals. A U.S. State Department Level 2 Travel Advisory issued on 3 January cautions U.S. nationals – particularly dual U.S.-China nationals – that there has been an increase in seemingly arbitrary enforcement of local laws and “exit bans” against them, including detention. Similarly, Canadian nationals are being cautioned of the same after the recent high-profile detention of a Chinese national in Canada followed by several detentions of Canadian nationals in China.

INDIA | Rising Rupees and Election Tests

In 2019, India is likely to hold onto its position as the world’s fastest growing major economy, on track to surpass the size of the U.S. economy by 2030. The one potential wild card in India this year is the general election scheduled for April. In his first electoral test in five years, the economic reformer Prime Minister Narendra Modi – as well as all 543 members of the Lok Sabha parliament – will face the voters. Various polls leading up to the election continually have Modi and the National Democratic Alliance ahead, but some with a ruling majority and some without.

No major changes in immigration or labour laws to watch for this year. Any legislative action over the first half of the year will be aimed at domestic benefits and wage issues and currying favour with voters. Indian immigration has already seen numerous positive refinements over the last several years – with greater use of e-visas, increased lengths of visa extensions, and implementation of an e-FRRO registration system.

GERMANY | Combatting a Skills Shortage

In mid-December, the German cabinet passed a new immigration law designed to address a significant ongoing labour shortage by making it easier for skilled foreign nationals from outside the EU who don’t meet the current immigration skill levels to be employed in Germany. Already a robust system of immigration for higher-skilled foreign professionals, the new law will facilitate companies in Germany in bringing in medium-skilled occupations such as the construction and manufacturing trades. The new law purportedly will also allow non-EU nationals to come to Germany for six months to search for employment. Watch for details, including an implementation date, in the coming weeks.

WILD CARDS?

The above trends and regions are those which seemed most deserving of mention – either because of the importance of the market or significance of developments. However, there are several others not included above which may prove to be wild cards this year with potential to significantly impact the international business climate.

Brazil:  Brazil’s further transition to its new immigration system brought by 2017’s extensive New Migration Law will continue. The election last October of Brazil’s new far-right President Jair Bolsonaro was a significant defeat for the leftist Worker’s Party which had ruled for two decades. Bolsonaro’s rhetoric is often compared to U.S. President Trump’s populist, anti-establishment, bomb-throwing rhetoric. However, like Trump, Bolsonaro is likely to find the institutions at which he directs his vitriol more resilient and resistant to abrupt change than he believes. Expect the Brazilian business and legal climate to maintain course with only a slight lean to the right and remain open to international business expansion. 

Saudi Arabia:  The recent killing of Jamal Khashoggi has certainly tarnished the international image of Crown Prince Mohammed bin Salman, but it is not likely to result in a major shift of power or reversal of Salman’s otherwise pro-business reforms. There may be some leadership and advisor changes below the level of the Crown Prince, and companies may hesitate in deals in Saudi, questioning whether recent reforms are really having the intended effect of liberalising the environment or not. But the Vision 2030 reforms will likely continue.  

Ukraine: The Cabinet of Ministers already adopted new policies on temporary residence permits and permanent residence last year, and a spate of positive immigration changes were made in 2017. So we don’t expect major changes on the business immigration front in Ukraine. However, the ongoing tensions between Russia and Ukraine continue to foment a potential for abrupt change to the business and legal climate.

On the positive side, the martial law imposed on 26 November last year ended with the new year. Presidential and Parliamentary elections in March are expected to bring a more reformist, pro-western government friendly to western business.

Nigeria: In April 2019, Africa’s largest economy is facing what will likely be a fiercely contested presidential election – only its sixth election since returning to democracy in 1999. While a major set of new immigration regulations updated Nigeria’s immigration system in 2017, other much-needed economic reforms have been absent. There is nothing expected on the business immigration front in Nigeria in 2019, but the potential regime change and the even more worrisome potential of destabilisation in the event of a contested election still introduces uncertainty into the business climate that deserves watching.

FINAL THOUGHTS… AND MORE RESOURCES

Well… that’s what we’re seeing now as we look down the road at 2019. But as faithful readers of our Newland Chase global immigration alerts and blogs know… the road of global business immigration and mobility is not without its unexpected turns, bumps, and detours. As always, we encourage you to sign up for our weekly newsletter to have all of our informational and educational resources emailed to you once each week – including alerts of law changes, insights on global business and legal climate, and invitations to our in-depth live webinars on cutting-edge topics of value to the international business community and their HR and mobility managers. (Signup on our home page here.) Specific concerns regarding the impact of any of our 2019 trends on your business are best directed to your capable Newland Chase immigration specialist. General enquiries regarding our global capabilities can be directed to [email protected]. Also, your charming yet humble Global Legal Analyst and writer-in-residence always invites questions, comments, and suggestions for future blogs at [email protected].

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