March 29th 2019 – Closure of Tier 1 (graduate) entrepreneur and Tier 1 entrepreneur categories and the introduction of the startup and Tier 1 innovator and categories that replace it.
The Tier 1 (Graduate Entrepreneur) visa permits successful applicants to extend their stay in the UK after graduation in order to establish one or more businesses. Applications can be made in-country without having to leave the UK to obtain entry clearance. To be eligible to apply for this visa the applicant must be from outside the EEA and Switzerland.
On 7 March 2019, the Home Office published its statement of changes in (HC 1919), giving details to the anticipated Tier 1 entrepreneur closure and introducing the Tier 1 innovator and start-up categories would replace it.
The closure of the entrepreneur route takes effect from 29 March 2019. Applications must be submitted on or before 28 March 2019 to be considered under the entrepreneur category.
If an application for entry clearance leave to enter or leave to remain has been made before 29 March 2019, such applications will be decided in accordance with immigration rules in force on 28 March 2019.
Tier 1 graduate entrepreneur applicants apply on the basis of endorsement letters from higher education institutions or the Department of International Trade. These letters are valid for three months and may continue to be issued until 5 April 2019. The Tier 1 graduate entrepreneur applications can, therefore, continue to be made until 5 July 2019.
Deadline for extensions – settlement applications for migrants already in the categories of Entrepreneur or Graduate Entrepreneur
Transitional arrangements are being applied to mitigate the impact of the changes on those already in the Tier 1 (entrepreneur) and (graduate entrepreneur) categories. Extension applications for Tier 1(entrepreneur) migrants will remain open until 5 April 2023 and settlement applications until 5 April 2025.
Insofar as Tier 1 (graduate entrepreneur) migrants are concerned, they will be able to switch into the new start-up route if they have not yet had their maximum two grants of leave under the Tier 1 (graduate entrepreneur) route. If their start-up endorsement is from the same endorsing body as in the previous Tier 1 (graduate entrepreneur) application, the business ideas will not need to meet the new start-up criteria in relation to innovation.
Tier 1 graduate entrepreneur migrants including those who switch into the start-up category will continue to be able to switch into the Tier 1 entrepreneur category until 5 July 2021, and this can be an entry clearance or leave to remain applications. The Tier 1 entrepreneur extension applications will remain open for these individuals until 5 July 2025 and settlement applications until 5 July 2027.
Where extensions are granted in entry clearance applications, the period is being shortened from three years four months to 2 years four months to bring it more in line with in-country extensions.
From 5 July 2019, an applicant will not be able to apply for Tier 1 graduate entrepreneur Visa. Such a person can apply for a start-up or innovator Visa instead. Start-up Visa is a much more user-friendly term reflecting the need for those graduates to begin a business
The immigration rules appendix W: – immigration rules for workers encapsulates the rules concerning start-up businesses and innovators.
In order to apply for the startup Visa an applicant must be endorsed i.e. approved by an authorised body that is either a UK higher education institution or a business organisation with a history of supporting UK entrepreneurs. The business plan would have been prepared for the endorsing body to consider. Such a body will, of course, charge a fee for considering the business plan and providing an endorsement letter. A list of these business endorsing organisations is available on the Home Office website online. This requirement is in order to ascertain the genuineness test for entering into a start-up business. An application should be made no earlier than three months prior to travel requirements. The Home Office hopefully will fast track these visas within weeks.
An NHS health care surcharge will have to be paid as for most Visa applications before an application is made. An applicant can stay in the UK for two years on a start-up Visa. This Visa cannot be extended. The visa may also be cut short if the endorsement is withdrawn. If an applicant desires to stay longer there must be a re-application with the new endorsement prior to the current Visa expiring to prevent the person from becoming an overstayer. The total period of leave to remain cannot exceed two years even if the applicant is granted a new Visa with a new endorsement.
An applicant can bring family members as dependents and switching to this category from some other Visa categories is permissible, and an applicant can also be working in another job as well as working for their business.
Public funds claims are prohibited and working as a doctor or dentist in training is also prohibited. Furthermore, an applicant cannot work as a professional sportsperson for example a sports coach and this visa does not lead to settlement.
Before an application is made a business, plan should have been prepared and the idea assessed by an approved body as aforesaid. That approved body will provide the applicant with endorsement letter to confirm whether the business is viable. This would be an important consideration for the Home Office.
The applicant must be at least 18 years of age, meet the English language requirement and be able to prove that they have enough personal savings to support themselves whilst in the UK. They should have at least £945 in their bank account for a minimum of 90 consecutive days prior to the application being made.
English language requirement
An applicant needs an approved English language test with at least CEFR level B2 in reading, writing speaking and listening. Alternatively, an applicant should have an academic qualification taught in English as recognised by UK NARIK as being equivalent to a UK bachelor’s degree, Master’s degree or PhD. If an applicant has already proved to be at level B2 or above in an earlier successful application there is no need to prove the language requirement again.
Those applicants from countries that are English speaking countries deemed to be so by the Home Office are not subject to the English language requirement.
With respect to the innovator Visa, an applicant can apply for such a Visa if they want to set up or run a business in the UK. They need to have the business idea endorsed by an approved body and must be outside the EEA and Switzerland and meet the eligibility requirements. An innovator must have at least £50,000 in investment in funds to set up a new business. Funds are not required if the business is already established and has been endorsed by an earlier visa. An innovator is somebody who is applying “innovation” which is applying “creativity” to come up with a unique idea or solution. Progress depends on innovation. Start-ups are focused on top end revenue and growth potential, with respect to businesses that are known to exist and are not therefore innovations. A start-up, therefore, is a newly emerged business venture that aims to develop a viable business model to meet a marketplace need or problem. An invention is a unique idea that can in itself lead to a profitable business venture.
This category is for more experienced business people seeking to establish a business in the UK. Applicants will have an innovative viable and scalable business idea which is supported by an endorsement body. This category may lead to settlement in the UK.
The applicant does not need to be the sole founder of the proposed business and can be part of a team. However, unlike under the Tier 1 entrepreneur route, the team cannot share the investment fund. For example, if the two persons in the team each must have invested £50,000, to make a total investment £100,000.
The health care surcharge is payable.
The application if successful will grant leave to remain for three years if switching to this category from another Visa or leave to enter for that period as an innovator.
An applicant can apply to extend for another three years when the Visa is due to expire. There is no time limit on the number of extensions.
The applicant may be able to apply for settlement known as indefinite leave to remain once and they have been in the UK for 5 years.
Again, as with a start-up Visa, the Visa may be cut short if the endorsement is withdrawn. If the applicant what wishes to stay longer they must apply for a new endorsement before the current Visa expires.
The applicant can set up a business or several businesses, work for their own business and this includes being employed as a director or self-employed as a member of the business partnership and can bring family members as well. They cannot work outside the business for example where they are employed by another business, or work as a doctor or dentist in training or as a professional sportsperson.
Insofar as eligibility is concerned, the business idea must be assessed by an approved body and this will provide an endorsement letter to show that the business is viable. The individual must have had at least £945 in their bank account for 90 consecutive days before applying. There is a list of endorsing bodies for innovators approved by the Secretary of State which can be ascertained on the Home Office website online. A Business plan is required and these endorsing bodies will charge a fee. An organisation can only issue an endorsement if it is on the list. The English language requirements are the same as with respect to the start-up visas.
The specific requirements for this type of Visa can be noted from Part W6 of the immigration rules. This is for entry clearance or leave to remain applications. Applicants for indefinite leave to remain must also satisfy the general requirements in part W4 of these rules which are called the “worker rules”. Part W6 also sets out the requirements for endorsing bodies in this category.
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