We employ geocoded data to explore the effects of ethnic enclaves in Swedish cities on the propensity of Middle Eastern immigrants to transcend from having no employment to self-employment. We demonstrate a robust tendency for immigrants to leave non-employment for self-employment if many co-ethnic peers in the enclave are business owners, while we observe weak effects emanating from business owners in other groups. Net of these effects, overall enclave size, measured by the local concentration of co-ethnic peers, has a negative influence on the propensity for a non-employed immigrant to become self-employed. © 2020 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.