What is replacing Tier 1 Entrepreneur visas? Part One: Start-up Visas
As of March 2019, applicants wanting to start or get involved in businesses in the UK must now use the new Start-up and Innovator categories as Tier 1 (Entrepreneur) visas have been consigned to history. There is a feeling that the Home Office were not fully prepared for the change, and guidance has been recently updated giving more details on the endorsing bodies (see below). Importantly, we now have reliable lists of endorsers.
Another change is that it is no longer necessary to have £200,000 to put into the business. Rather than convincing the Home Office that you have a genuine business plan, you are required to persuade the leading business organisations and higher education institutions on the approved endorsing bodies lists to give you an endorsement.
Applicants can be working on their own or as part of a team. For start-ups, the business must be new or, at least, should not yet have fully started trading. The business can be in any sector.
If the idea is to join an already trading business, the Tier 2 visa skilled work route may be more appropriate. If individuals are simply seeking to invest in an already trading business, then the Tier 1 (Investor) category visa may be more appropriate.
The Start-up Category
Start-up visa applicants need to fulfil two sets of criteria, which are at Part W3 and Part W5 of the Immigration Rules. See here for the UK Immigration Rules.
Part W3 contains general requirements which apply to many other visa categories as well. The applicant must be over 18 and pass an English language test at upper intermediate (B2) level, unless the requirement is fulfilled through having a degree taught in English or being a national of an English speaking country. This is a higher level than was necessary for the old Entrepreneur visa route.
The applicant also needs to meet a maintenance requirement by showing they have held £945 in savings over a 90-day period before they apply (although, they do not need to provide this evidence if the letter from their endorsing body confirms they have been awarded funding of at least £945).
Part W5 talks about the need to be endorsed by an organisation that will assess the applicant’s business idea. Obtaining the endorsement will be the biggest barrier to budding applicants.
The Start-up category is for early-stage, but high potential, entrepreneurs who are starting a business in the UK for the first time. As mentioned above, it should not yet have commenced trading. The only exceptions to this are if the applicant has already been granted leave to remain in the UK under the Start-up or Tier 1 (Graduate Entrepreneur) categories, or under the Tier 4 doctorate extension scheme.
Applicants do not need any funds to invest in their business at this stage.
The Start-up visa route offers a one-off, 2-year visa, during which applicants will spend the majority of their time developing their businesses. However, they can also take on other work outside of their businesses, to support themselves.
Family members can be included
Successful applicants can bring their family members (spouses/partners and children under 18) to the UK. At the end of 2 years, they can switch into the Innovator category to extend their stay and develop their businesses in the UK.
The role of the endorsing bodies
As part of the application process endorsing bodies have to decide if the business will be innovative, viable and scalable, with the ultimate aim that it has the potential to become fully integrated and a contributing part of the UK economy.
Applications for endorsement of the start-up are assessed with reference to the applicant’s business proposal against the following 3 key criteria:
- Innovation - Does the applicant have a genuine, original business plan that meets new or existing market needs and/or creates a competitive advantage?
- Viability - Does the applicant have, or are they actively developing, the necessary skills, knowledge, experience and market awareness to run the business successfully and do they have sustainable goals?
- Scalability - Is there evidence of structured planning and of potential for job creation and growth into national markets?
At present, however, there is no specific guidance for applicants and the above is taken from the guidance to endorsers.
For information the list of endorsers can be found here:
- The list for Start-up endorsers, which includes a number of universities, can be found here.
If you have any queries on how these changes will impact your business, contact our team on +44(0)203 051 5711 or contact us.