# **_1. Introduction_**

In Honduras, the average time taken to obtain a Temporary Work Permit (TWP) for an Information Technology (IT) specialist is 22 weeks. The hiring company is required to submit an application to the Work Secretariat to obtain a certificate of compliance with the quota requirements. It is then required to apply, on behalf of the applicant, for a special stay permit to the Director of Immigration and Foreign Affairs. Upon receipt of the special stay permit, the skilled expatriate must register him/herself in the National Foreign Register and then submit an application to obtain the TWP before the Work and Social Security Office of the Department of State. This is followed by an official visit to the company by the migration officers from the Department of State to verify compliance with the quota requirements. The Department of State then reviews the application and grants the TWP.

In Singapore, in contrast, the same process takes 10 days on average. The hiring company applies for an Employment Pass at the Ministry of Manpower, which issues an in-principle approval letter. Upon entering Singapore, the skilled expatriate is required to follow the instructions stated in the in-principle approval letter (for example, to comply with a medical check-up) and upon compliance, the employment pass is issued.

The Employing Skilled Expatriates indicators (ESE indicators) analyze the skilled immigration regime relevant for Foreign Direct Investment (FDI) across 93 economies and aims at providing comparable information about this regulatory space. As governments increasingly seek to attract FDI as a driver of long-term development, reforming the investment climate – including the skilled immigration regime – is one policy option to consider.

# **_2. Why does skilled migration matter for foreign investors?_**

The ease of hiring skilled expatriates is one of the factors which are taken into consideration in the location decision of multinationals. When the required expertise cannot be sourced in the hosting country, skilled immigrants are necessary to start-up new subsidiaries and train workers. In other cases, a company may need to deploy a skilled immigrant with specific expertise from within the corporate group. In the latter scenario, companies frequently resort to the intra-company transfer scheme under Mode 4 of the World Trade Organization’s General Agreement on Trade in Services (GATS) which allows companies to temporarily transfer employees from one member country to another. For this paper, we have opted to exclude GATS or any other multilateral or bilateral treaties, in order to improve comparability of skilled immigration regimes across 93 economies. Differences in the various multilateral and bilateral agreements with regard to definitions of skilled expatriates and prerequisites related to nationality and recognition of credentials would have prevented transparent comparisons across economies.

Overly restrictive or cumbersome skilled immigration regimes may result in lengthy work permit processing times which potentially imply stalled productivity or loss of strategic or first-mover advantage for companies. Other restrictions (for example, quotas) may impact the viability of new ventures and may lead companies to invest in economies with less restrictive skilled immigration policies. A recent research paper provides evidence that a less restrictive skilled immigration regime is conducive in attracting FDI (Medina, 2012). Our paper builds further on this premise.

In 2012, under the supervision of Michael Porter, the Harvard Business School conducted an in-depth survey with 10,000 Harvard alumni in senior leadership positions to identify the roots of the 3