The following changes will apply to new applicants from 29 March 2019:
• Investors will have to provide evidence of the source of any investment funds they have obtained within the two years prior to the application date – a substantial increase from the current 90 day requirement.
• UK banks will be required to confirm they have carried out all of the required due diligence checks before opening an investment account.
• Investments in government bonds will be excluded.
• Applicants may 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.
• The rules around investment companies will tighten and other types of pooled investment vehicles will remain prohibited.
The purpose of the changes is to protect against financial crime and ensure investments are of greater benefit to the UK economy. Future changes may include requiring Investors to undergo enhanced checks on their financial circumstances and business histories, carried out by a UK-regulated auditor, before making a visa application.
Entrepreneurs and Graduate Entrepreneurs
The Graduate Entrepreneur route will close to new applicants from 6 July 2019 and will be replaced by a new Start-Up category.
The Entrepreneur route will close to new applicants from 29 March 2019 and will be replaced by a new Innovator category.
The new visa categories will require an endorsement of applicants by third-party 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.
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 will have to 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.
The English Language requirement for the new categories will be set at level B2 CEFR.
The Start-Up category
• For applicants who are starting up a business for the first time in the UK.
• Applicants will not have to be graduates and will not have secured any initial funding.
• Leave to remain will be granted for a maximum period of two years, with the option to progress into the Innovator category to continue developing their business.
• Settlement (Indefinite Leave to Remain) cannot be reached in this category.
The Innovator category
• Intended for more experienced business people.
• Applicants will have to demonstrate access to £50,000 to invest in their business.
• 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.
• Leave will be granted for three years and there will be no limit on the time spent in this category.
For those who are currently in the Tier 1 (Entrepreneur) category, extension applications will remain open until 5 April 2023, and settlement applications until 5 April 2025.
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 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 three 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 including 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.
Please contact your Magrath Sheldrick LLP representative for more information about the immigration rules.