Last week, the Home Office announced big changes to the Immigration Rules. Is it a coincidence that these changes will come into force on the dreaded date of 29 March 2019 (Brexit anyone)?
The most significant changes relate to the Tier 1 Entrepreneur visa and the Tier 1 Investor visa. The Entrepreneur visa has effectively been scrapped and replaced with ‘Start Up’ and ‘Innovator’ Visas.
What do these changes in the Immigration Rules mean for people interested in setting up business or investing in the UK?
Under the Tier 1 Entrepreneur visa route, you only have until 29 March 2019 to take advantage of the numerous benefits that it offers; after this date the opportunity will be lost forever under the imminent changes to the Immigration Rules.
You will need to apply before that date so there is no time for delay. Speak to an expert to see what you can do about getting your applications in before the changes to the Immigration Rules come in.
Under the Tier 1 Investor visa route, the rules about how long you have to have held the investment funds and what business you can invest it have all been updated under the changes to the Immigration Rules. Make sure you get the right advice before you invest. You don’t want it all to be for nothing!
Tier 1 Entrepreneur Visa -V- Tier 1 Innovator Visa routes
The Tier 1 (Graduate Entrepreneur) and the Tier 1 (Entrepreneur) routes will both be scrapped and replaced by Start-Up and Innovator routes. Under these new changes to the Immigration Rules, all applicants must:
- Be endorsed by trusted organisations in the UK, such as business accelerators, seed competitions and government agencies, as well as higher education providers
- Stay in contact with those endorsing bodies regularly
- Show that they speak English at level B2 (higher than the current required level B1)
- That their business plans are “credible” (there may be interviews to test this)
- and that they have held £945 in their account for 90 days prior to the application (although these funds can now also be provided by the endorsing bodies).
Currently these routes allow entrepreneurs to enter (or remain) in the UK to set up or invest in an existing business. For Graduate Entrepreneurs, £50,000 can be provided by an authorised endorsing body. For Entrepreneurs, the minimum investment required is £200,000 and they are free to invest in any business/industry they choose, with the exception of property.
The Start Up Visa
Under the changes to the Immigration Rules this visa will replace the current Graduate Entrepreneur visa route from 6 July 2019 and will offer advantages to those who are new to business. It is aimed at those who are starting a new business for the first time in the UK.
- You don’t have to be a graduate to qualify.
- You don’t need to have secured initial funding in order to qualify.
- Successful applicants will be granted two years leave in the UK and will be allowed to progress onto the Innovator route after that time, provided they meet the requirements.
- This route (in itself) does not lead to settlement but by progressing to the Innovator category, you can secure Indefinite Leave to Remain (ILR) after five years.
- The endorser must provide a letter confirming the business’ innovation viability and scalability and also confirm that they are satisfied the applicant will spend the majority of their working time in the UK on developing business ventures.
The Innovator Visa
From 29 March 2019 this route will replace the Tier 1 Entrepreneur route under the changes to Immigration Rules.
- Applicants will have to have £50,000 in investment funds rather than the £200,000 currently required.
- The financial requirement will be waived for those who are progressing from the Start-Up category if they can show that they have made significant progress.
- An endorsement will be required prior to submitting the application.
- Applicants are expected to demonstrate that they already have skills of Innovation, Viability and Scalability and must satisfy endorsers that they will spend their entire working time in the UK on developing business ventures.
- Entrepreneurial candidates will no longer have the freedom to establish any business they wish to. They will have to show their business idea as innovative and this is subject to the endorser’s confirmation.
- Innovators will be eligible for Indefinite Leave to Remain after three years of continuous residence as opposed to five as long as they meet at least two of the listed criteria relating to (i) the amount of money invested, (ii) the growth of the business and (iii) how many jobs were created.
Will entrepreneurs who wish to extend their existing Entrepreneur visas be affected by the changes to the Immigration Rules?
Extension applications for Tier 1 (Entrepreneur) migrants will remain open until 5 April 2023, and settlement applications until 5 April 2025. Successful Tier 1 Entrepreneur migrants applying for an extension from abroad will be granted 2 years and 4 months leave as opposed to the current 2 years.
If you wish to take advantage of the current Entrepreneur Visa route, then you have to take action now, or you will lose the opportunity forever.
The Investor Visa
Changes to the Immigration Rules for Tier 1 Investor visas will apply from 29 March 2019 and they are significant.
- Currently investors are required to have held a total of £2,000,000 GBP for a minimum period of 90-days in their personal accounts. Where the applicant can show the source of these funds, for example, where they have been generated as a result of a sale of property or transferred as a gift from a family member, the 90-day period can be waived.
- From 29 March 2019 the applicant’s funds will be required to have been held for a minimum of two years.
- Following the money laundering scare late last year, the Home Office are tightening the requirements for UK banks to carry out the correct due diligence before opening an account for investor applicants.
The types of permitted investments are also being amended under the changes to the Immigration Rules to prevent applicants from investing in government bonds. Instead applicants will be invited to invest in active and trading UK companies as long as they are:
- Registered with Companies House in the UK;
- Registered with HM Revenue and Customs for corporation tax and PAYE;
- Have accounts and a UK business bank account, both showing regular trading of its own goods or services;
- Have at least two UK-based employees who are not its directors.
Transitional arrangements for Investors
As a result of the changes to the Immigration Rules transitional arrangements for current investor visa holders will be in place until 5 April 2023 for extension applications and 5 April 2025 for settlement applications. Successful Tier 1 (Investor) migrants applying for an extension from abroad will be granted 2 years and 4 months leave.
As always, once the Home Office release further information, we will revisit the new route through a more detailed post. The above are the most important points prospective entrepreneurs and investors need to be aware of.
For Entrepreneurs and Investors who prefer the terms of the existing routes contact us on 020 3588 3500 for advice and guidance on getting your applications through before the changes in the Immigration Rules come in to force.
Time is of the essence.