The Tier 1 (Entrepreneur) immigration category is designed for non-EEA nationals who wish to work in the UK either by setting up or investing in and being actively involved in the running of one or more businesses in the UK.

Although the applicant must be principally engaged in the UK business, their family members, being partners and children under 18 years of age (the “dependants”), are free to undertake any employment, self-employment, studies or be self-sufficient in the UK.

It is important to note that applications under this category are heavily scrutinised by the Home Office and half of all applications are refused. Consequently, applicants must be certain that they satisfy all of the qualifying criteria, have a good track record of running successful businesses, have a comprehensive understanding of the market in the UK in which the business will operate and an in-depth knowledge of the business they are setting up or investing in.

Initial visa requirement

The initial application is normally made from the applicant’s country of nationality and / or residence. However, in certain circumstances, individuals may be able to apply if they are already in the UK.

The basic criteria are that the applicant must:

  • be at least 16 years of age;
  • show that:- they have access to £200,000, which is transferable to the UK (if not already in the UK); or- they have access to £50,000 from a registered venture capital firm, a UK entrepreneurial seed funding competition or a UK Government Department.

The funds do not have to be held by the applicant and can be held by a third party, as long as the applicant can demonstrate to the Home Office that the funds are available to them. The Home Office has very detailed mandatory requirements regarding the documentation that must be submitted to satisfy this requirement. It is therefore vital that applicants ensure that all the required documentation is submitted in the correct format;

  • have sufficient funds to support themselves and any dependants during their stay in the UK;
  • be able to meet the English language requirement; and
  • be able to demonstrate that they are a “genuine entrepreneur”.

Genuine entrepreneur

In order for the applicant to demonstrate that they are a genuine entrepreneur, they must submit a business plan which should include details of their business idea, their qualifications, their previous business experience, the research they have undertaken in their chosen business sector, including an analysis of their competitors, and any marketing they have already done. The Home Office may request that the applicant attends an interview.

When considering the application, the Home Office will take into consideration the viability and credibility of the business plan, the source of the funds which are to be invested in the business, the applicant’s qualifications and previous business experience and their responses to the questions asked at their interview (if applicable). The Home Office will then make a subjective decision as to whether it deems the applicant to be a genuine entrepreneur. From our experience, the interview plays a crucial part in the Home Office’s assessment of whether the applicant is a genuine entrepreneur and, therefore, the success of the application will depend heavily on the applicant’s knowledge of the UK market, their business plan and the answers they provide in their interview with regards to their background and experience as an entrepreneur.

Provided the application is successful, the applicant and their dependants will be granted UK immigration permission valid for three years and four months, if they applied overseas, or three years, if they applied in the UK.

Extension visa

In order to be granted an extension, the applicant must be able to demonstrate that they:

  • have registered with Companies House as a director of a UK company or registered with HM Revenue & Customs as self-employed within six months of being granted immigration permission as a Tier 1 (Entrepreneur) visa holder and continue to be registered and engaged in business activity in the UK;
  • have invested the full £200,000 / £50,000 into the UK business. The investment cannot include the cost of any residential accommodation or be invested in businesses involved in property development, management or investment. The investment also cannot be used for the applicant’s remuneration or to purchase the business;
  • have created the equivalent of two new full-time roles for settled workers in the UK that have existed for at least 12 months. Settled workers include British citizens, EEA and Swiss citizens and individuals who do not have any time restrictions on their stay in the UK. The jobs do not have to be in existence at the time that the extension application is submitted but must have existed at some point during the initial period of immigration permission; and
  • continue to be a genuine entrepreneur.

Provided the extension application is successful, the applicant and their dependants should be granted immigration permission for a further two years.

Indefinite leave to remain (ILR)

Applicants may be eligible to apply for ILR:

  • once they have held immigration permission as a Tier 1 (Entrepreneur) Migrant for five years; or
  • once they have held immigration permission as a Tier 1 (Entrepreneur) Migrant for three years if they have:- created the equivalent of 10 new full-time jobs for settled workers in the UK that have existed for at least 12 months; or - established a new business that had an income of at least £5m over a three year period or increased the income of an established business by at least £5m over a three year period.This is known as the accelerated route to ILR. Please note that even if the applicant is eligible to apply for ILR after three years under the accelerated route to ILR, their dependants would still need to wait five years before they can apply for ILR.

In order to obtain ILR, the applicant will need to meet the residence requirements, which are that they must not have been outside the UK for more than 180 days in any rolling 12 month period during the three or five year qualifying period for ILR.

It is important to note that, following a recent change to the UK Immigration Rules, dependants may also be required to meet the residence requirements at the ILR stage.

The applicant and their dependants over the age of 18 years will also need to meet the English language requirement and pass the Life in the UK Test.

British Citizenship

Once the applicant, and / or their dependants, have been present in the UK for at least five continuous years and have held ILR for at least one year, they may be eligible to apply for British citizenship and, subsequently, a British passport. The requirements are set out below.

The applicant / their dependant must:

  • be of sound mind and good character such that, for instance, they do not have a serious or recent criminal record and has not been in breach of any UK immigration laws;
  • intend to have their (main) home in the UK; and
  • meet the following stricter residence requirements, which are that they have not:
    • spent more than 450 days in total outside the UK during the five years prior to applying for British citizenship; and
    • spent more than 90 days outside the UK in the 12 months prior to applying for British citizenship.

Please note that, in certain circumstances, an applicant / their dependant may still be granted British citizenship if they have excess absences, provided the absences were due to business related travel or due to compassionate or compelling circumstances and they can show that they have established themselves, their family and a substantial part of their estate in the UK.

The future

The Home Office has recently announced that it will introduce a new start-up visa route for talented entrepreneurs. In order to obtain this visa, an applicant must have an endorsement from a university or approved business sponsor. Further details regarding this new visa should be available shortly and it is expected that this route will launch in Spring 2019.

Conclusion

For non-EEA nationals who are genuine entrepreneurs looking to work in the UK by setting up or investing in and running a business in the UK, the Tier 1 (Entrepreneur) immigration category can be an attractive option.

However, in order to be granted immigration permission under this route, it is important to note that the applicant must be actively involved in the day-to-day running of the UK business and be able to demonstrate to the Home Office that they are a genuine entrepreneur. From experience, this can be challenging for some applicants, especially recent graduates who may not have a significant amount of business experience, and, consequently, the refusal rate for these applications is high compared to other UK economic migration categories.