Quotas, Caps & Ratios
This is the sixth of a series of six short articles by Sophy King of Peregrine Immigration Management Ltd, covering some of the key areas of basic global immigration management. A basic understanding of how immigration processes work is vital in order to manage international assignments and projects efficiently and effectively. Peregrine Immigration Management Ltd is a young company founded by Sophy King specifically to address this need. Peregrine provides global immigration consultancy, training and knowledge transfer and management services, including via its revolutionary immigration knowledge database, Immiguru.
This short article looks at immigration quotas, caps and ratios – how do these work, when are they relevant, and how can you best plan for them?
Going back to the first article in this series, immigration regulations exist in the first place because countries need and want to protect jobs for their own resident workers. Permission to work is given to foreign nationals only where it can be demonstrated that there is a genuine need for a worker from overseas to come and fill a position. Some countries go further than simply requiring the work permission application to justify the need for the worker and place numerical caps on how many approvals can be issued in a calendar year. These caps are administered in various different ways:
Annual, national caps: Some countries have annual caps at a national level for number of work permits to be issued that year in any given category. The U.S is probably the best known example of this, with its cap of 65,000 on new H-1B visas per fiscal year. The UK also has an annual quota on Tier 2 General (i.e. corporate application outside the intra company transfer route), which is set annually (20,700 places) but administered monthly (although note that in both cases there are some exceptions to the caps).
Regional caps: Sometimes a country will have an annual, national cap which is subdivided by region. Switzerland is a good example – the Federal Migration Authorities impose a cap on the issuance of work permits every year and this cap is further subdivided by canton. If a canton uses its entire allocation of permits, it may apply to the Federal authorities for more – although of course, its request may be denied.
Company specific quotas: In a reasonable number of countries, an annual or regional cap is further subdivided by company. The company typically must apply for a specific number of permits for upcoming staff, sometimes needing to specify what nationality employee these permits will be for, and/or what job position they will be fulfilling. This is the case in Russia (where a company applying for work permits outside the Highly Skilled Worker Scheme must both have spaces within its quota allowance AND have a valid, vacant position on its “company work permit”; and Nigeria (where STR visas are issued only for vacant positions on a valid expatriate quota approval).
Ratios: A fairly common method of controlling the foreign worker population is to use ratios. Brazil utilises this approach for its local hire visas (although notably, not for temporary visas where the assignee remains on home contract and payroll). Under the Brazil rule, foreign workers must make up no more than 1/3 of the entity’s total staff. Egypt has a rule where no more than 10% of the employee population of a company may be non-Egyptians, plus any foreign national employee must commit to training two named Egyptian national “assistants” to fill the same position. In Indonesia, for each foreign national who is hired in a non-Director position, the Indonesian company must have a local employee as their counterpart. The counterpart should be trained by the foreign national with the ultimate aim of transferring the expertise to the local employee.
So, quotas, caps and ratios are administered in different ways in different countries. The important thing to remember is that in many cases, these rules tend to apply to a particular immigration strand, meaning that if your company takes good advice, you may be able to bypass them completely. If not, however, good planning is essential, as in cases where applying for quota approval is a requirement, this often has to be done several months in advance of actually bringing foreign national employees in to the destination country. Contact your immigration adviser, or Peregrine, for more details.