INTRA COMPANY TRANSFER UPDATE

1st March 2010

In 2009 The Migration Advisory Committee (MAC) undertook extensive consultations with various stakeholders in respect of changes to Tiers 1 and 2 of the Points Based System (PBS) for UK Immigration Control. MAC is an independent body of economists appointed by Government to carry out studies of the UK labour market and to consider where migration can be used strategically to advance the economy. Following the review, MAC made a number of recommendations which have been accepted by Government and are likely to be introduced on 6th April 2010. Some of these apply specifically to the Intra Company Transfer (ICT) route.

Length of prior employment before qualifying under Tier 2 (ICT)

Currently the Tier 2 (Intra Company Transfer) route allows multi national companies to transfer employees from offices outside the UK to the UK once they have completed six months service. MAC recommended increasing this period of prior employment to twelve months. The Tier 2 (ICT) route will therefore only be available to employees who have worked for the company overseas for a full year.

Residence and Citizenship

Currently a Tier 2 (ICT) migrant can be granted a maximum initial period of three years permission to stay in the UK followed by an extension of a further two years. After five years sponsored employment in the UK, Tier 2 migrants become eligible to apply for Indefinite Leave to Remain ("ILR" also known as permanent residence). After a further one year stay in the UK, employees may apply to naturalise as British citizens.

The MAC report found that allowing workers to settle in the UK after five years provides an incentive to employees to use Tier 2 (ICT) as a route to citizenship without the resident labour market ever being tested.

MAC therefore recommended that in future the Tier 2 (ICT) route should not lead to permanent residence in the UK.

What does this mean in practice?

1. Where employers are already aware of a potential assignment to the UK and the selected employee has between six and twelve months prior service with the company, they should initiate the immigration process during the month of March whilst the current rules apply.

2. Where an employer is aware that a prospective move to the UK is to a local position and therefore a permanent move, the immigration process should be initiated during March 2010 to avoid the requirement to advertise the position.

3. When considering employees for relocation to a UK project or a UK headcount role it should be borne in mind that employees must have twelve months prior service in order to be easily transferred to the UK.

4. For a permanent move to the UK the role should be advertised externally and an application for sponsorship should be made under Tier 2 (General). External advertising is required in Job Centre Plus and one other approved medium for at least four weeks.

5. In particularly time sensitive cases, it may be possible to transfer employees (who have twelve months prior service) to the UK under Tier 2 (ICT) and then arrange to switch their status into Tier 2 (General) once resident labour market testing has been undertaken. However this will introduce additional costs and administration to the process.

6. Tier 2 (General) applications take longer because of the four week external advertising requirement and the need to consider any applicants for the role and, where necessary, provide reasons for rejecting their application.

Knowledge transfer

MAC also recommended that a "knowledge transfer" route be opened up for recent recruits to multi-national companies who do not have 12 months prior service and who are transferring to the UK for knowledge transfer and on the job training prior to returning to their home country to continue in their new role. However this will only apply to applicants who are not taking a headcount role in the UK and who will be required in the UK for short periods (up to 12 months).

Tier 1 (General)

MAC recommended that this Tier 1 route (previously known as the highly skilled migrant programme) be opened up again to applicants with Bachelors degrees. At present this route is only available to Master's degree holders. If this change is implemented as part of the April policy revisions, the Tier 1 (General) route will become a more attractive option to candidates who would otherwise have applied under Tier 2 (ICT) as it will lead to permanent residence and will not require 12 months prior service with the company. It should be noted however that Tier 1 visa holders are "self-sponsored" and are therefore not tied to a specific employer in the UK.