Publication - Consultation paper

Intra-company transfer immigration route - call for evidence: Scottish Government response

Published: 30 Aug 2021
Directorate:
External Affairs Directorate
Part of:
Economy, International, Work and skills
ISBN:
9781802011777

This paper sets out the Scottish Government’s response to the call for evidence by the Migration Advisory Committee's (MAC) call on Intra-Company Transfers. It provides evidence on the use by businesses with a base in Scotland as well as outlining how the route could be made more responsive to the needs of the Scottish economy.

Intra-company transfer immigration route - call for evidence: Scottish Government response
Global 'Parking'

Global 'Parking'

65. Increased immigration scrutiny, lengthy processing times and a limited number of visas available annually all have created challenges for employers seeking to sponsor foreign employees for U.S. based roles over the past several years. Competition for jobs in the United States and demand for visas to enter the US grows daily. Furthermore, there is a limit on the number of H1B visas granted each year. From 24 June 2020 until 31 March 2021 several visa categories were suspended by the United States Government citing the risks presented to the US labour pool due to the global coronavirus pandemic[18, 19]. These included H-1B and H-2B non-immigrants; L-1A executives and managers; L-1B specialized knowledge workers. In light of these conditions, international assignments are growing in use[20].

66. Multinational employers are leveraging a strategy known colloquially as global parking to fill key roles within their organisation by temporarily placing or 'parking' talent in one of their international entities until they are able to secure an H-1B visa to work in the USA.

67. Global companies from across a broad range of sectors such as JP Morgan, GlaxoSmithKline and Amazon, as well as fast-growing start-ups, are choosing to invest and grow their operations in Scotland. The ICT route provides an opportunity to strengthen existing business relationships and encourage new inward investment by offering Scotland as a European base for large multinationals to 'park' skilled workers.

68. Between March 2019 and March 2020, the number of Abroad-owned businesses in Scotland increased from 2,870 to 3,010. As at March 2020, there were more Abroad-owned businesses (3,010) than RUK based businesses (2,935) operating in Scotland[21]. Similarly, as noted in Figure 2, there were more Scottish jobs in Abroad-owned businesses than in RUK based businesses in March 2020.

Figure 2: Private sector jobs in Scotland, by business ownership, 2000 to 2020
Figure 2 is a graph noting the number of businesses owned by people within Scotland and from abroad between 2000 and 2020. Between March 2019 and March 2020, the number of Abroad-owned businesses in Scotland increased from 2,870 to 3,010.

69. As previously stated, 35.4% of private sector employment as at March 2020 was in businesses with their ultimate base outside Scotland. Breaking this down, 17.1% of Scottish private sector employment was in businesses with their ultimate base in the RUK and 18.3% was in businesses with their ultimate ownership Abroad (i.e. outside the UK). As outlined in Figure 3 the share of employment in Abroad-owned businesses varies by industry sector. For example, 34.5% of Scottish 'Information and communication' employment as at March 2020 was in Abroad-owned businesses, compared to 2.6% of Scottish 'Real estate activities' employment.

Figure 3: Share of employment by ownership and industry sector, as at March 2020
Figure 3 notes the share of employment in Abroad-owned businesses, by industry sector in 2020. It highlights that 34.5 per cent of Scottish ‘Information and communication’ employment as at March 2020 was in Abroad-owned businesses, compared to 2.6 per cent of Scottish ‘Real estate activities’ employment.

70. As at March 2020, there were 1,265 EU Abroad-owned businesses operating in Scotland – employing 128,780 people and generating a turnover of £35 billion (36.3% of all turnover from Abroad-owned registered businesses in Scotland). In terms of individual countries, USA-owned businesses accounted for the highest share of Scotland's Abroad-owned businesses, Abroad-owned employment and Abroad-owned turnover.

71. As at March 2020, there were 660 USA-owned businesses operating in Scotland – employing 112,740 people and generating a turnover of over £31 billion (32.2% of all turnover from Abroad-owned registered businesses in Scotland). The ICT route will be of particular benefit for these businesses whilst awaiting US work visas for their staff.

72. Individuals 'parked' in Scotland contribute to the Scottish tax base and bring the necessary skills to key growth sectors such as Fintech. With an established and growing fintech sector, a skilled and adaptable workforce, and easy access to the world's global financial markets Scotland's financial sector is the largest in the UK outside of London, hosting more than 2,000 financial services companies[22]. 

73. Scotland also has an extremely attractive cost of living compared to other leading financial centres[23]. Cost of living expenses (excluding accommodation) in Scotland's cities relative to New York City are 31% less expensive in Dundee, 30% less expensive in Scotland's largest city, Glasgow, 26% less expensive in Aberdeen, and 24% less expensive in the capital, Edinburgh[24]. Along with highly competitive salaries, Scotland's cities offer monthly living costs that are roughly 10% lower than other UK cities such as Cambridge and Oxford and as much as 34% lower than London.

74. Coupled with the above benefits, HSBC, one of the world's largest banking and financial services organisations cited easy access to other global locations, in London, India, North America, and the Far East as a deciding factor in choosing Scotland to establish a UK centre for its global risk and compliance operations[25].

75. The ICT route is an important benefit on offer to multinationals wanting to establish a European base and contributes to Scottish Government objectives outlined in our inward investment plan which sets out our ambition for Scotland as a leading destination for inward investment aligned with our values as a nation[26]. Similarly to the 'digital nomad' visas being promoted by countries such as Romania, Finland, Estonia and Portugal[27], the ICT route is also acts an indirect lever for showcasing the benefits of moving to Scotland and attracting talent to settle here. The route offers a way for international workers to trial living and working in Scotland. If there is then a desire to remain in the UK, and agreement is reached with their employer, ICT workers can transfer onto the Skilled Worker route with the aim of settling in the UK instead of returning to their country of origin or relocating to the US.


Contact

Email: Olivia.Pires@gov.scot