On 29 March the entrepreneur visa route – which enables a business person to relocate to the UK if they have qualifying investment funds and a strong business plan – will close to new applicants. In its place, the innovator route will launch, seeking to welcome those with business acumen and experience, and the endorsement of an organisation/body approved by the UK Home Office.
These changes to the Immigration Rules mark a significant shift in the way that future businessmen and women will be assessed for a UK visa. This article looks at some of the key points to know about the new route, and the demise of the entrepreneur option.
1. Entrepreneur closes to new applicants only
Those who already hold status as an entrepreneur – whether still within their initial 3-year visa, or already having extended their leave – will be permitted to remain in the same category. There are deadlines to be met for future extensions and settlement, after which time the route will be closed for good:
- Extension applications must be made by 5 April 2023
- Settlement applications must be made by 5 April 2025
2. Existing entrepreneur applicants will see some minor changes in how their applications are assessed
The changes focus on entrepreneurs’ engagement with their UK businesses. The current rules contain vague requirements relating to evidence of ongoing business activity (the ‘genuine entrepreneur’ test), and applicants often include evidence such as invoices, client contracts or payment receipts as proof of their activity. In future “applicants will be asked to provide an overview of the business’s activity, details of their role within the business, and the job title/descriptions for the settled worker employees for whom they are claiming points.”
3. Innovators require less cash than entrepreneurs
The current entrepreneur route requires (for most applicants) investment of £200,000 in the UK. Innovators need substantially less, only £50,000 under the new scheme. Unlike the entrepreneur option, innovators cannot share these funds if they form a team; £50,000 is required for each applicant.
4. But innovators also need the endorsement of a relevant body
The genuine nature of entrepreneurs and their business acumen is currently assessed by the Home Office within the application process. For innovators, that will change, with external endorsing bodies needing to ‘pre-approve’ the viability of an individual’s application. The appropriate endorsing bodies will include business accelerators, seed funding competitions and government agencies, as well as UK universities, but as yet there are few other details available. Tech Nation – which already acts as an endorsing body under the Tier 1 (Exceptional Talent) route – is an approved body , but they have already indicated that they will not begin processing applications under September: https://technation.io/visa/startup-and-innovator/. Whether applicants will have to wait until late summer to make an application remains to be seen, but so far, no other endorsing bodies are confirmed.
5. The innovator route introduces ongoing checks on business activity
Currently, entrepreneurs are issued with a 3-year visa and then have no contact with the Home Office until that visa expires. No checks are conducted into whether the individual has genuinely invested in the UK, or whether they are even living here. Under the new scheme, innovators will be required to have contact with their endorsing body after 6, 12 and 24 months from the grant of leave, to monitor their ongoing progress in the UK. This development addresses the current Home Office concern that the entrepreneur route can be abused, and innovators can expect much greater ongoing scrutiny than that experienced by entrepreneurs.
6. The English language requirement is different
To reflect the sophisticated level of English required for applicants in the innovator category, the minimum English language requirement is being raised from level B1 to level B2.
7. And innovators don’t have the option to invest in an existing UK business
Entrepreneurs can currently choose whether to establish their own company, or to invest in an existing business in the UK. Innovators will not have that option, and will instead be required to rely on a new business only. It will however be possible to launch a new venture with a resident business partner.
8. The road to settlement is very different for innovators when compared with the entrepreneur route
Unless qualifying for accelerated settlement, most entrepreneurs secure indefinite leave to remain in the UK after 5 years (following an initial 3-year visa followed by a 2-year extension). This will not apply to innovators. Initially granted a 3-year visa, they will have the option to settle in the UK upon completion of those 3 years, if the settlement requirements are met. These include:
- Job creation of 10 full time positions, or 5 full time positions each paying at least £25,000 per annum;
- Satisfaction of alternative methods of measuring business success, such as an increased customer base, significant research and development for the UK sector, or gross revenues exceeding £500,000 with £100,000 from exports.
Many companies may struggle to demonstrate such significant progress in a relatively short period of time, in which case the innovator route offers (as yet) unlimited opportunities to extend status for 3 years at a time, allowing a greater opportunity to satisfy the settlement requirements, and then apply for indefinite leave to remain at a later date.