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Changes for Entrepreneurs and Investors

Tier 1 (Entrepreneur) and (Graduate Entrepreneur) routes are closing and changes to the Tier 1 (Investor) route will be introduced

Changes announced on Thursday 7 March

The Government has announced imminent and substantial changes to the Tier 1 (Entrepreneur), (Graduate Entrepreneur) and (Investor) routes. New Start-up and Innovator visa categories will be introduced for those who wish to come to the UK to set up in business, replacing the Tier 1 (Graduate Entrepreneur) and Tier 1 (Entrepreneur) categories which will be closed.  The Tier 1 (Investor) category is being amended in tandem to provide better protection against financial crime and ensure investments are of greater benefit to the UK economy.

Closure of existing schemes

The Tier 1 (Entrepreneur) route will be closed to new applicants from 29 March 2019 and the Tier 1 (Graduate Entrepreneur) route will be closed from 6 July 2019.

The new Start-up and Innovator categories

The two new business categories will require third-party endorsement by UK trusted bodies such as business accelerators, seed competitions and government agencies, as well as higher education providers. These bodies will assess applicants’ business ideas for innovation, viability and scalability.

The Start-Up category (intended to replace the Graduate Entrepreneur route) will be for those who are starting a business for the first time in the UK.  Unlike the previous route, applicants will not have to be graduates and will not be required to have secured any initial funding. They will be issued with two years leave to remain with the option to progress into the Innovator category to continue developing their business.

The Innovator category is intended for more experienced businesspeople. Under the scheme, applicants will have to demonstrate access to £50,000 to invest into their business.  As with the Tier 1 (Entrepreneur) category, applicants will be issued with three years leave to remain.  For applicants switching from the new Start-Up category the funding requirement will be waived where they have made significant achievements against their business plans.  Those extending in the category will need to show that their businesses are trading and successful.  If their original business idea did not succeed they may submit a new business idea for endorsement under the criteria for initial applications.

Applicants in the Innovator category will be able to apply for settlement (indefinite leave to remain) after three years provided they are able to show they meet the requirements.  To settle, applicants will need to show that their business meets at least two of the following requirements:

  • At least £50,000 has been invested into the business and actively spent furthering the business plan assessed in the applicant’s previous endorsement.
  • The number of the business’s customers has at least doubled within the most recent 3 years and is currently higher than the mean number of customers for other UK businesses offering comparable products or services.
  • The business has engaged in significant research and development activity and has applied for intellectual property protection in the UK.
  • The business generated annual gross revenue of at least £1 million in the last full year covered by its accounts.
  • The business has generated annual gross revenue of at least £500,000 in the last full year covered by its accounts, with at least £100,000 from exporting overseas.
  • The business has created the equivalent of at least 10 full-time jobs for resident workers.
  • The business has created the equivalent of at least 5 full-time jobs for resident workers, which have an average salary of at least £25,000 a year (gross pay, excluding any expenses).

As with the Tier 1 (Entrepreneur) category before, if applicants wish to rely on job creation they will have to show that the jobs have existed for at least 12 months.

The English Language requirement for the new categories will be set at level B2 CEFR and there will be greater ongoing supervision of the new categories. Applicants will be required to stay in contact with their endorsing bodies who will check in on them after 6, 12 and (for the Innovator category) 24 month intervals.  The endorsing bodies must be satisfied that applicants are continuing to work on their business ventures and have either demonstrated reasonable progress with their original ideas or are pursuing new business ideas that continue to meet the innovation, viability and scalability criteria used for their original endorsement.

For those who are currently in the Tier 1 (Entrepreneur) category, extension applications will remain open until 5 April 2023 and settlement applications will remain available until 5 April 2025.

Changes to the Tier 1 (Investor) route

From 29 March 2019 Tier 1 (Investors) will have to provide evidence of the source of any investment funds they have obtained within the last two years – a substantial increase from the current 90 day requirement.  UK banks will also be required to confirm they have carried out all of the required due diligence checks and Know Your Customer enquiries before opening an investment account.

Investors will no longer be allowed to invest in UK government bonds but they will be able to invest in pooled investments which receive funding from a UK or devolved government department or one of its agencies such as the British Business Bank or the Scottish Investment Bank. Other types of pooled investment vehicles will remain prohibited.

The Home Office Migration Policy team has also confirmed that future changes are likely to include requiring investors to undergo enhanced checks on their financial situations and business histories, carried out by a UK-regulated auditor, before making a visa application.



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