The Home Office is discontinuing the UK’s Tier 1 Entrepreneur Visa and replacing it with two new visa categories.
Effective March 29th, 2019, the UK Government discontinued UK Tier 1 Entrepreneur Visa category, replacing it with the “Startup Visa” and “Innovator Visa” categories.
Even by mid-April, as I write this article, information in the market about the new program’s details are mixed, and somewhat unclear. The below explanation is born out of a thorough study of the new regulations, as well as consultations with seasoned UK immigration attorneys.
The new visa categories replacing the Entrepreneur category:
The Startup Visa: Valid for two years, after which the applicant may qualify for;
The Innovator Visa: Valid for three years
In plain English: Applicants are eligible for Indefinite Leave to Remain (ILR) after having held the Innovator visa for 3 years. Those who do not qualify for the Innovator visa from the outset may apply for the Startup visa as a bridge to obtain the Innovator visa after a period of 2 years.
What are the Startup and Innovator visas, and who are they meant for?
The Startup category: For early stage but high potential entrepreneurs starting a business in the UK for the first time.
Applicants do not need any funds to invest in their business at this stage and must not have previously set up a business in the UK.
Successful applicants are granted leave for two years and can also bring their family members (spouses/partners and children under 18) to the UK.
During the granted period of leave, applicants will spend the majority of their time developing their businesses but may also take on other work outside of their businesses to support themselves.
At the end of two years, Startup visa holders can switch to the Innovator category to extend their stay and develop their businesses in the UK.
The Innovator category: For more experienced businesspeople seeking to establish a business in the UK.
Applicants will need a minimum £50,000 funding available to invest in their business.
Successful Innovators are granted leave for 3 years at a time and can also bring their family members (spouses/partners and children under 18) to the UK.
Innovators must work entirely on developing their business ventures and may not take on other employment outside their business. This includes anything that effectively amounts to employment, such as using their own business to hire out their labor to another employer.
After 3 years, Innovators can apply to extend their stay for a further 3 years or to settle permanently in the UK. Each of these 3 stages (initial application, extension, settlement) requires endorsement from an endorsing body.
Considering the Startup and Innovative visas are both new, some detailed requirements remain uncertain, but we can confirm that business plans will need the endorsement of Home Office appointees. The information provided thus far is that Tech Nation and 23 other bodies have been appointed as an endorsing body and will start their work in that capacity from September 2019. There will be strict monthly quotations on the number of applications, but specific numbers are yet to be announced.
Detailed requirements for the new visa categories
As before, no interview is required at the Embassy or Consulate. However, the applicant needs to apply for endorsement from a registered endorsing body in the UK. These are specialist business organizations that have a track record of assisting UK business (such as accelerators or business hubs).
You can find the list of approved endorsing bodies here.
Each endorsing body has its own set of criteria, and many of them require that you join their programs before they considering an endorsement.
The general requirements for endorsement are that the applicant’s business proposal shows
- Innovation: The applicant has a genuine, original business plan that meets new or existing market needs and/or creates a competitive advantage.
- Viability: The applicant has, (or, for the Startup visa, is actively developing), the necessary skills, knowledge, experience and market awareness to successfully run the business.
- Scalability: There is evidence of structured planning and of potential for job creation and growth into national and international markets (national markets only required for the Startup visa).
- Commitment: The endorsing organization must also be reasonably satisfied that the applicant will spend their entire working time in the UK on developing the business venture and the innovator may not work for another business.
- The applicant must demonstrate that they will spend most of their time in the UK working for their business on the Startup visa, although the applicant may take a part-time job during this time.
- If applying for the Innovator visa, applicants need to show that they will spend all of their working time in the UK working on their business; unrelated part-time work is not permissible.
- While the Startup visa has no minimum investment amount, applicants that later switch to the Innovator visa or who are applying for the Innovator visa from the outset will need to invest a minimum of £50,000 or higher, depending on what is needed under the business plan.
- Although teams are possible under the visa, each team member must show their own £50,000 investment.
Upon receipt of a formal endorsement, the applicant will move on to the visa application stage.
General document requirements:
- Maintenance – £945 for the main applicant and £634 for each dependent held as a minimum balance for 90 days.
- English Language – The applicant needs to either hold a degree taught in English that is recognized by UK NARIC, or to have passed an English language test at level B2. B2 ILETS minimum score: 5.5
- Criminal Records checks – for the applicant and any dependents over 18
- TB Certificate – if applying from a TB listed country.
The client and family move to the UK. In the case of Innovator visas approvals, the participant has 6 months to invest and start the business for which he/she obtained the visa. Both in the case of Startup and Innovator visas, the endorsing body will assign to the investor a “mentor” who will speak to them every 6 months to monitor progress. This monitoring will continue for Startup for 2 years, and for 3 years for Innovator. The main applicant must stay in the UK for a minimum of 6 months a year.
Once the client has moved from Startup to Innovator Visa and/or directly invested funds as per terms of “Innovative Visa” detailed above, they must fulfill any of the two below-listed conditions to obtain ILR in as little as 2 to 3 years:
- Double the amount of business and customer portfolio
- Reach minimum annual revenue of GBP 1 million
- Reach minimum investment of GBP 500,000 and GBP 100,000 in exports
- Create 5 full-time jobs at GBP 25,000 per annum salaries.
- Create 10 full-time minimum wage jobs for 1 year.
The new scheme is clearly looking to address concerns previously that entrepreneur visa application processing is too subjective and dependent on the assessment of the Home Office caseworker, as raised by the MAC in its review of the Tier 1 route.
By requiring applicants to secure endorsement prior to making their application to the Home Office, it is hoped the new visa will offer a more objective evaluation of the viability of the business idea.
In a further reform, the investment amount has been significantly reduced, rom £200,000 under the old entrepreneur visa route to £50,000 under the new innovation route. A smaller capital requirement should open up the route to a wider pool of candidates and shift the focus of the application on the merit and potential for the business idea to be successful.
Interestingly, the funding requirement will be waived for those switching from the new Start-up scheme, who have made significant achievements against their business plans.
Many entrepreneurs are now asking if they should push forward with an application under the existing route or wait until the new scheme comes into force.
Your options will depend on your circumstances. Applicants who have been considering making an application for some time and who have already started to build their submission, it may make sense to submit your application as soon as possible, before the current route closes. Extension applications for Tier 1 (Entrepreneur) migrants will remain open until 5 April 2023, and settlement applications until 5 April 2025.
On the other hand, for people who are new to the scheme and particularly those who want to set up their own business, it may well be that the new (less subjective) rules are beneficial. As such, it may be prudent to hold off until the new route goes live.
Taking advice on your circumstances will help you understand which course of action best meets your needs and improves your prospects of making a successful application.
Applicants should also note that across the board, the Home Office is heavily scrutinizing supporting documentation in respect of business visa applications. Evidencing source and ownership of funds will be critical.
To qualify for the innovator visa UK an applicant needs to meet the general and specific requirements under Part W3 and W6 of Appendix W, Immigration Rules, respectively.
Perhaps, a genuine applicant doesn’t need to worry about most of the general requirements for innovator visa UK, as these are quite easy and procedural in nature. However, meeting specific endorsement criteria for “new business”, “same business” and “settlement” is critical for any successful innovator visa application. To know if you can qualify contact specialist innovator visa solicitors London.
Certainly, not. Perhaps, the introduction of an innovator visa UK seems to an improvement of the PBS Tier 1 entrepreneur.
Apparently, Tier 1 (Entrepreneur) route was introduced in 2008 to replace a number of other business immigration routes, mainly the Businessperson and Innovator routes. Certainly, when introduced in 2008, the Tier 1 entrepreneur visa route for migrants was essentially points-based. However, over the years due to the abuse of the Tier 1 entrepreneur visa route, especially after Jan 30, 2013, ceased to remain points based. Accordingly, since early 2013, Tier 1 entrepreneur applications were not assessed and decided solely on points and there are a lot of subjective elements in the assessment process, which resulted in unduly high refusal rates.
Certainly, the innovator visa category of Appendix W will replace the Tier 1 Entrepreneur route from March 29, 2019. However, the Tier 1 Entrepreneur route will remain open for extension and ILR (settlement) applications until 5 April 2023 and 5 April 2025, respectively. Moreover, successful Tier 1 Entrepreneur migrants applying for an extension from abroad will be granted 2 years and 4 months leave instead of 2 years.