Business Start-Up/Entrepreneur Visas

As we explained in the Summer 2018 Immigration Summary, the Home Secretary has announced a new business “start-up” visa. It may be aimed particularly at the techie/IT sector but it may be wider – the information so far is sparse.

The new visa does sound rather similar in some ways to the Tier 1 Graduate Entrepreneur visa, but the Home Secretary has specifically stated that it will not be limited to graduates – whereas the Tier 1 Graduate Entrepreneur visa, as its name suggests, is. And there are indications that the new visa may entirely replace the Tier 1 Graduate Entrepreneur visa, although this is not certain either.

The core requirement for a Tier 1 Graduate Entrepreneur visa is the applicant (who may have either a UK or non-UK degree) has been recommended or endorsed either by a British university or other higher education institution or by the Department of International Trade. In the former case they must have been deemed to have “developed genuine and credible business ideas and entrepreneurial skills” and in the latter case they must be deemed to be “elite global graduate entrepreneurs”.

The Tier 1 Graduate Entrepreneur visa is in a way a rather curious one. The visa holder is allowed to work, or not work (if they can afford it). But the idea behind it is that the migrant is trying to set up a business and is aiming towards Tier 1 Entrepreneur status. The Tier 1 Graduate Entrepreneur does not have to invest any funds in a business but a Tier 1 Entrepreneur, as a condition of their leave, has to, firstly, show that they have the required amount of funds available and, secondly, at some point they have to show that they actually have invested the funds.

A Tier 4 student may be able to switch in-country to Tier 1 Graduate Entrepreneur and a Tier 1 Graduate Entrepreneur may be able to switch in-country to Tier 1 Entrepreneur, so the way that the rules are structured encourages a degree of visa mobility for entrepreneur-minded students.

This sounds nice, but the salient fact is that the Tier 1 Entrepreneur visa application is prodigiously difficult. There are two main reasons for this: (i) the rules are very complicated and (ii) there is a “genuine entrepreneur” test, which in some cases creates a very high hurdle for applicants to overcome. The mindset of decision-makers in some cases seems to be “we will refuse this application unless there is good reason not to”. The refusal rate for Tier 1 Entrepreneur visa applications is about 50% – which by comparative standards is very high.

And this is why we were so encouraged by the words on the Home Office website about the new visa: the visa application process will be, we are promised, “faster and smoother”. Is this an implied admission that the Tier 1 Entrepreneur visa application process is typically neither fast nor smooth? Well, we strongly imagine it might be.

In any event, we do know that the new visa, like the Tier 1 Graduate Entrepreneur visa, will require endorsement from an approved body. But this leaves some burning questions: will the migrant have to invest funds in the business? And, if so, how much? And will we be correct in assuming that the visa will (unlike the Tier 1 Graduate Entrepreneur visa) offer a route to settlement? And will it be a five-year route or something different? And will there be a “genuine entrepreneur” test, or something similar?

The answers to these questions will no doubt emerge over the next few months: the new visa is supposed to come into effect early next year. We will keep you informed

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