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Next month we start a new chapter in the Biznews.com adventure with our expansion into the UK. We believe our innovative business model will travel, so are determined to give it a full go in London – following a logical strategy of generating hard currency income from a low cost home base. It’s a well trodden path, as I discovered yesterday when chatting to lawyer JP Breytenbach. He is the senior partner of Breytenbachs which for almost two decades has been the go-to destination for thousands of South Africans wanting to relocate to the UK. A family-owned business, its speciality gives the firm’s partners a unique insight into migratory trends – both from and into SA. Fascinating insights as you’ll read and hear from the interview below, including that there are now around a million South African-born residents in the UK. And the latest wave of emigrants are doing so for very different reasons to their predecessors. – Alec Hogg
Alec Hogg is outside Doppio Zero in Rosebank and he’s with someone who’s synonymous with emigration of South Africans into the U.K. – JP Breytenbach. JP, your business is very well known internationally, certainly amongst South Africans living in London. When did you decide to look into this as a niche?
Well, it actually started with my father (Hannes). Back in 1997, he got a little bit bored. He had a law firm in Rustenburg and he said, “There’s only so much golf you can play with the doctors and dentists, etcetera.” He looked at other opportunities. The U.K. came up. He had some good business contacts there so in September of ’98, we all moved across as a family. I finished my schooling and university there and subsequently, qualified as a lawyer and took over the business in 2011 so it’s actually my father who started it. It’s a family business. My sister is involved. I’m involved and so are some cousins, and it’s gone from strength to strength.
How many lawyers do you have working with you?
In the London office, we have five qualified lawyers. In South Africa, we have another four qualified lawyers.
And the South African niche is clearly from your background.
Yes. As a family, we’ve gone through the whole emigration process ourselves. Of course, it gives us a certain viewpoint on it and having lived on and off in the U.K. since 1998 and having assisted many thousands of South Africans (and other nationalities, but mainly South Africans) with the emigration process to the U.K. and oftentimes, back to South Africa; we have a pretty good experience of how these things work. It’s going to be very exciting and interesting to see what’s going to happen over the next 18 months.
Why 18 months?
Well, of course the big issue coming up is the referendum in the U.K. In our out Brexit and of course in South Africa, we’re going to go through a very interesting period with the elections coming up. If you look at emigration laws, the way they’re set up and intertwined with one another; whatever happens, you can’t just change something overnight. There’s always a parliamentary cycle. There are always emigration rules. Statements of change will come out and then it’s a consultation so whatever happen with Brexit now will probably only hit us in 6/12/18 months’ time.
Let’s dwell a little bit on the whole Brexit story i.e. Britain leaving the EU. There are many South Africans in Britain on EU passports, not necessarily British passports. If the Brits decide to leave the EU, what happens to them?
Well Alec, there are three categories of South Africans in the U.K. now. You either have those with British ancestry, or you have those (as mentioned) with some form of European ancestry with their families in the U.K., or you have those who are in the U.K. based entirely on their skillset and their work permits, etcetera.
Just three ways of getting in, if you like.
Maybe I could just sketch a bit of background on how it all works now. It’s very interesting. You’ve got two parallel systems of immigration in the U.K. You’ve got the British immigration rules that parliament can control and you have the European economic regulations, which parliament of course, can’t control. Therein lies the rub. In 2006, when these European regulations came in, you had the so-called A8 accession states. E.g. Poland and Romania – the new Europe, if you will. Prior to that, you always had Germany and France, etcetera. Of course, many South Africans went over on working holidays because the U.K. needed people to wait their tables and tend their bars etcetera. Then Poland and all these other nationalities who of course, learn English at school, decided ‘we have an opportunity now to travel. We can all speak English.
Let’s go to the U.K.’ as opposed to Germany or France where they might not have learned German or French at school. As a result, Cameron always goes on about net migration. The U.K. is a small, little island with a lot of people on it. The infrastructure can’t take it, etcetera. Now, what the British government is done is they’ve made it so hard for non-EU citizens (as hard as they can) because they can control those numbers to an extent. A very good example of that is if you as a British citizen want to take your spouse over to the U.K. with you, you have to meet certain minimum income requirements. Just to give you an idea of the average client we’d have: if you have a husband, wife, and two children the costs for them if the British citizen actually meets the requirements is pretty exorbitant. You’re talking about £1000.00 just on high commission fee per person.
You’re talking about an NHS levy that one now has to pay (£200.00 per person per year) in advance. If you are the dependent of a Dutch citizen, of course it’s gratis. You don’t pay and that has made a lot of British citizens very upset. These changes came in, in July of 2012. It was challenged all the way and there’s actually still a court case, called MM & Others vs the Secretary of State pending. That’s why I’m saying that it could take 18/24 months because that case came in, in early 2013 and it still hasn’t been resolved.
Let’s just go back a little bit. Up until the time that the new EU countries came in, South Africans would go to England quite easily. They would be able to wait the tables or act as security guards, etcetera but with the new EU coming through (the Poles and those nationalities)…. Was that the trigger that made it more difficult for South Africans in fact, to work in England?
Let me give you an example. The majority of South Africans back then went over to the U.K. on a two-year working holiday visa. You’d go over on a two-year working holiday visa. You’d start working for a company. After a year or two if you work hard, you become sort of indispensable and that company then sponsors you for a work permit. Right now, it’s not actually more difficult to get a work permit. The trick is for you to have a company that wants to sponsor you. It’s a classic catch-22 because that company won’t sponsor you until they know what you’re all about and of course, you can’t show them that because you can’t work for them because they won’t sponsor you. In short, it’s not only for South Africans but also for pretty much everybody except for the Australians, New Zealanders, and Japanese. They can actually still do two-year working holidays. It’s just called something else now. However, there’s nothing more like that for South Africans at the moment.
How many South Africans are in the U.K.?
I think that if one were to define that by ‘South African-born’, I would say close to one-million – easy.
So there’s been a massive migration over the period. Has that slowed down since these new laws came in?
We have certainly seen a slowdown in your lower skilled individuals, simply because they cannot go anymore. Our high net worth immigrants have certainly increased. The U.K. has brought in new program to attract investment and to attract entrepreneurs. In addition, we’ve seen an increase in South African businesses actually sending over a representative to open up a branch in the U.K. It’s called a Sole Representative Visa. Yes, the numbers have decreased but I almost want to say your higher net worth clients find a way.
So it’s almost as if the quality of South African migrants has risen, which is not a good thing for South Africa but is a very good thing for the U.K.
It is and it’s sad for South Africa because it’s the people whom you don’t necessarily want to have leave your economy, who leave. Of course, a lot of those people take an awfully large amount of money with them when they go. For us, that’s a concern because there’s so much money leaving the country. On a slightly more positive note for South Africans, there has been an increase in people coming to South Africa as well, especially businesspeople and entrepreneurs etcetera who see excellent opportunities in South Africa, which some of us jaded South Africans might not see anymore (I would think).
That’s interesting. Where would they come from, primarily?
From the subcontinent. There are quite a few from the subcontinent – from China. Then you have the Europeans as well. We have quite a few American and Canadian clients, especially surrounding mining who also, still want to come in and establish businesses.
Getting back to Brexit: of those million ‘South African-born’ who are living in the U.K. now, is there any way of estimating how many of them would be on EU passports? Secondly, what is likely to happen to them if Brexit were to occur?
I think it’s impossible to really say with any form of certainty how many of them would be EU passport holders or EU dependents. The way the law works with European nationals… If you’ve lived and worked in the U.K. for five years, you can apply to stay there permanently. In addition, 12 months thereafter you could apply for British citizenship, so we’re advising our clients, “If you have that option, apply for permanent residence – your British citizenship, and then you know you won’t have any hassles”. I simply don’t think that any of our clients will be affected to a great degree if they’re already there. I think it’s more likely that if Brexit were to happen, which is a big if, I think a sidebar question would be ‘would the EU still be relevant anyway, in a year or two’s time’? If the UK goes, who else is going to start going but I think it will be more a case of new entrants being stopped from going.
It’s very hard for the UK you know they can’t apply the law retrospectively. The European Union would make it incredibly difficult for them to affect the freedom of people. You know, the whole EU really, was freedom of people and freedom of goods, so it’s going to be incredibly tough to undo the damage if you want to call it that, from the UK’s point of view but, yes, they can make it very hard for new entrants.
If we were then to take somebody in South Africa who has say, a right to Greek citizenship and they don’t necessarily want to live in Greece but they would love to live in the UK. If they were even thinking about it, I presume now would be the time to do it, just in case Brexit happens.
I would think so. One should also bear in mind that you can go to the UK with your Greek passport, for example, and your family. Apply for them for some form of residency, which will then be active. Then with a little bit of careful planning with your travels and the way you do business, you can still spend a very large amount of time in South Africa. I think often times people think if you go to the UK that’s it, you’re gone. We advise all our clients, across the board, do not burn any bridges, don’t forget about South Africa, be positive about South Africa, and be a good South African when you’re over there that side. There are ways of doing it, so that you can protect you and yours without losing necessarily, what you hold dear in South Africa.
Brexit is not that big a disaster for would be immigrants from South Africa who have the right to EU passports at this point?
I really don’t think it is. I think it’s like with anything in life, do you planning, get advice, do your preparation, and keep a wary eye on everything but I wouldn’t panic just yet. The upside of Brexit would be if the UK somehow manages to put a quota system in place for European migrants or whatever. They still need immigrants. The UK will never ever be a country that won’t need immigrants. It will increase the opportunity if you’re an average South African would not have British or European heritage or ancestry rights, to be able to go to the UK again.
From a broader perspective, are you finding in recent times that there are more South Africans wanting your services than in the past? The mood certainly, in this country is not as upbeat as it was maybe five years ago.
It’s an interesting question. I think there are more and more South Africans… Look, the demand will always be great I think, for South Africans to immigrate. If you look at, I would say five/six/seven or eight years ago, I would say the reason has changed to an extent why people want to immigrate. There was a stage when my clients wanted to immigrate because they were afraid (high crime, etcetera). There is still an element of that but it’s more the increasing uncertainty about the economy that troubles my clients and there’s more and more a sense of ‘I might be okay, and my wife might be okay, but what about our children? What about our grandchildren’? Probably 25 to 30 percent of our clients, who actually go to the UK don’t have the intention, of settling there permanently.
They do, they want to get British passports but they want to come back, which is a great thing for South Africa, because of course they bring back hard earned Pounds and they bring back skills, and so forth, which I think is a very good thing. People often, at times think people who move abroad are giving up on the country. The reasons are merit why people go. Some people go because they just want to experience something else. Some people go just because they want to give their children an opportunity. It is more complex than just saying ‘they’re running scared and they’re going abroad’.
And the other way around, the South Africans who have been there, your clients and decide it’s not for them and they come back. We often hear these stories in isolation.
Well, I suppose I’m a good example of that, to a large extent, when I went there when I was 15. I finished my schooling there. I studied and did my law degree there and so forth I’m a qualified UK solicitor. I live in South Africa, primarily. Of course, I’ve got a British passport. I married a lovely young lady, who had no interest in living abroad, and she’s a doctor and she wants to give back to South Africa and straight across her classmates, they all want to give back to South Africa. Now, there’s a lot of people I know, personally, who are in the exact same boats, who either have businesses in South Africa and in the UK, like we do. Once you have that foreign passport, I almost want to say I think people feel a lot more relaxed because it’s almost as if you feel ‘well I’ve now done my bit for the next generation’ if you will. We love South Africa and our clients love South Africa, and it’s not an easy thing to immigrate and go live abroad permanently depending of course, on the type of person you are.
It’s interesting that. A foreign passport and a foreign income stream because we see the depreciation of the Rand as perhaps one of the most critical concerns for South Africans living in this country, is that they see that their global wealth is declining. What you’ve done is that something that more and people are trying to do to try and generate hard currency, income streams?
Definitely, our advisory company, Breytenbach’s Advisory, did a lot of the tax implications thereof and the tax planning and structuring of businessmen wanting to open up businesses there. If you look at some of our top businesspeople in South Africa, of course as per this morning’s ‘Insider’, you know Christo Wiese, etcetera and I think on obviously, a smaller scale a lot of our clients are certainly trying to do the same thing. A lot of families – we have Portuguese and Greeks and African families, who go over to the UK and open up a branch of their businesses. We have businesses, strong South African businesses, not necessarily large South African businesses, sending over a representative to go and open up a branch in the UK. Manufacturing, for example, is much cheaper to do stuff here.
We, at the moment, have four different software companies, who we are assisting with setting up a branch that side, where the programming and all the engineering would be, done in South Africa, but the implementation that side, by the relevant software engineer. Of course they can underbid the UK competitors quite substantially, and there’s one thing I can say is South Africans don’t have to stand back one step when it comes to our skill set and our business acumen but yes, there definitively is an element of that, yes.
It’s a globalisation mindset that perhaps the new network world is implementing here, as well as internationally.
I think so, I think of course, there is a downside to the Rand weakening, but a lot of these individuals would have done it anyway. If it wasn’t the UK, it would have been somewhere else because their businesses have come to a point where they can’t really do much more in South Africa. I think the interesting point about that is none of them are selling up in South Africa. None of them are saying ‘well you know what, I don’t believe in the South African economy, I’m going to give up and I’m going to sell everything and I’m going to start afresh’. It’s more a case of ‘you know what, we’ve got an opportunity, we’ve got a base, let’s go, and see what we can do that side but let’s maintain the ground we’ve won this side’.
It sounds almost like an economic decision, rather than a decision driven by fear, which could have been the case some years ago.
Definitely, you know in the early 2000’s a lot of our clients were, driven by fear. Whether or not South Africa has become a safer place – I’ll leave that up to others to speak on, but well whether or not South Africans maybe have become a tad braver, I don’t know but also, you know Alec, when the whole world economy crashed a little bit. I think a lot of South Africans realised ‘you know what, the grass isn’t always greener and what we have is pretty fantastic’ for a lot of us. What we also have is very strong exportable skills and the opportunities are out there and why not take advantage of them?
JP Breytenbach, it’s been a pleasure talking with you.
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