Tier 1 Entrepreneur Visa

The UK’s Tier 1 Entrepreneur Visa category is designed for entrepreneurs who are looking to set up, takeover or invest in a UK business and be actively involved in the management of the business. The hallmark of the Tier 1 Entrepreneur Visa is the access to at least GBP200,000 or GBP50,000 (in the case of a graduate entrepreneur switching or funding from seed funding competition endorsed by the UK TDI).

The Tier 1 Entrepreneur visa route is for non EEA migrants only.

It is important to highlight the definition of what a business is and who a settled person is with regards to the Tier 1 Entrepreneur visa. A business refers to a sole trader, partnership or limited liability company registered in the United Kingdom. A settled person means anyone not under immigration control in the UK.

In order to appreciate the Tier 1 Entrepreneur visa route, we should explore the justifications and fundamentals of the Tier 1 Entrepreneur visa; we can find this in the requirements for extension as well as indefinite leave to remain as a Tier 1 Entrepreneur migrant.

It follows that, for you to be granted an extension, it would mean that the UKVI believes that your activities during the first grant are in line with what the visa is designed for and so they think you should be granted an extension to continue; in the case of an ILR, it is a case of the migrant saying, ‘hey, I have done what you asked me to do, so can I stay here permanently now?’ This therefore means that the requirements for extension and ILR is the reason for the Tier 1 Entrepreneur visa.

Requirements

In order to be granted a Tier 1 Entrepreneur extension, the migrant must have invested at least GBP200,000 or GBP50,000 (as described above) and employed at least 2 full time ‘settled’ workers. Whereas to be granted an ILR, apart from other things (like English language and life in the UK test), the migrant must show that they continue to employ at least 2 workers and have stayed in the UK for most of the time; not spending more than 180 days outside the UK in a calendar year.

This leaves us with the unwavering conclusion that the Tier 1 Entrepreneur visa is about investing in the country and creating jobs for its people. This is very important for would-be applicants and interested persons to understand this as all the all the documentary evidence required and the entire application process initial application, extension and ILR revolve around investing the required amount, creating employment for settled persons and been in the UK most of the time to oversee it all.

Please note that the Tier 1 Entrepreneur visa is usually granted for an initial period of 3 years after which an extension of 2 years will be possible provided that you continue to meet the requirements and conditions of your leave. You will normally be eligible for ILR after 5 years on this route.

Fast track options – Tier 1 Entrepreneur

Your route to Indefinite Leave to remain as a Tier 1 Entrepreneur migrant can be fast tracked to ‘within three years’ if you are able to generate up to 10 full time jobs within a year or generate a turnover of up to GBP5m over the 3 year period.

Qualifying for a Tier 1 Entrepreneur Visa

The following requirements need to be met to edge towards a successful Tier 1 Entrepreneur Visa application

Access to at least GBP200,000 or GBP50,000 (as the case may be) available to the entrepreneur.
The required invested amount must be held in a regulated financial institution and disposable in the UK
There must be a provable intention to establish, take over, invest and become a director of at least one business in the UK within 6 months from the date of entry into the UK.
Upon gaining entry clearance as a Tier 1 Entrepreneur, the money (or part of it) must be transferred to the applicant’s UK business bank account in which he is a director.
The applicant must be able to pass the genuine entrepreneur test. The genuine entrepreneur test is a subjective way of assessing whether or not the applicant is a genuine business person or he/she is just in it for the visa. There are certain facts that any serious business person looking to move into a different territory would know. You would not expect an entrepreneur applying to move to different country not to know where he plans to locate his business or where he plans to get raw materials. Those are the kind of things that the Home Office will be looking to assess in the genuine entrepreneur test. Note also, that the genuine entrepreneur test is not a one off exam, it is assessed holistically in the entire application.

Other facts about the Tier 1 Entrepreneur Visa

The GBP200,000 investment funds doesn’t have to be yours. The home office recognises third party investments; provided you can show you have access to it and it is available to you for investment.
The new rules have now defined 2 full time employment to mean two persons working full time. Under the old rules, it was possible for entrepreneurs to employ 1 person for 2 years to meet this requirement.

Extension Application

Applicants are generally able to extend their Tier 1 Entrepreneur visa if in addition to meeting the requirements of their initial application, they have created jobs, invested the required sum and meet other requirements of the immigration rules.

The Tier 1 Entrepreneur visa initial application is usually granted for 3 years, after which the applicant may apply to extend his leave to remain under the same visa category.

In order to ensure a successful Tier 1 Entrepreneur extension application, what you do during the initial 3 years counts a lot to the success of your extension application. The following are things that applicants should take note of during the first three years:-

Register or buy a business within the first 6 months of your visa approval
Invest the required amount into the business. Please note that simply transferring the funds to your business bank account does not count as ‘investment’. Buying a property or paying yourself salaries does not also count as investment. Applicants must have to invest in a real business; hence the genuine entrepreneur test.
Create jobs for at least two settled workers with each job lasting a minimum of one year.

Importantly, the Tier 1 Entrepreneur is also a point based application; with the applicant needing to score 75 points in order to qualify for an extension.

Investment of 200,000 or 50,000 in a UK Business – 20 points

Applicants would need to show that they have invested not less than 200,000 (or a minimum 50,000 if the previous was leave was granted on that basis) directly in on or more UK businesses. Where the business was funded by a Director’s loan, it is important to evidence this by submitting a director’s loan agreement. Inconsistencies may arise where the dates on the director’s loan does not precede the date of the first transaction. The normal proceeding is to have a director’s loan and then business transactions.

Furthermore, only funds that have been invested over the past three years since the first application (Tier 1 Entrepreneur Initial Application) will be accepted. It is also important that the financial records are prepared by an accountant who is a member of a recognized supervisory body. Financial records are likely to be rejected where the accountant who prepared them is not properly regulated and/or registered.

As mentioned earlier, the home office must be able to visibly see that the applicant has not just personally injected the money on his behalf to fund the business. It must be clear that the money is actually a business investment and this must be recognizable by the Home Office in the way the accounting records are prepared.

It must also be clear from the records pertaining any chunk of inflow, who made the investment, when the investment was made and how much exactly was made.

Being a director or self-employed in a UK business – 20 points

The applicant must have become a director or must be self-employed in a business within 6 months of his/her first entry into the UK under the Tier 1 Entrepreneur route. This can be show by:-

Self-employment registration with the HMRC; or
Company house business registration of the new business in which you are the director; or
Registration as a director of an existing business; or

It is also important that at least one of the above requirements must be met within the first 6 months of the specified date. The specified date is defined either: –

The date of your entry to the UK, where you were granted entry clearance as a Tier 1 (Entrepreneur) Migrant and where there is evidence to establish your date of entry to the UK; or
The date of your grant of entry clearance, where you were granted entry clearance as a Tier 1 (Entrepreneur) Migrant and where there is no evidence to establish your date of entry to the UK; or
The date of your grant of leave to remain, in any other case.

Running the business – 15 points

The applicant will need to show that they are still engaged in business activities. It is important to note that the rules are silent on whether or not it is the same business that was started in the initial application that applicant still need to be in during the extension. However it does states the need for the applicant to show that s/he actually engaged in a business activity in the UK. The applicant also need to show that s/he is still engage in a business as at the time of the Tier 1 Entrepreneur extension application.

Creation of jobs – 20 points

The applicant will need to demonstrate that they have created 2 new jobs for two settled people directly as a result of their business activities. This can be evidenced using pay slips of the settled workers. The pay slips should be able to show the numbers of hours worked per month. If this cannot be evidenced in the pay slips, the employment contract between the applicant and the settled worker(s) may also serve to evidence this. It is important to mention this in your cover letter.

For applications where the initial leave was granted before the 6th of April, the applicant can rely on the scenarios described below to make up the creation requirement.

one worker for 24 months
one worker for 6 months and one for 18 months
4 workers for 6 months each

Maintenance requirement for Extension Application

Applicants must have held at least £945 in their personal savings account for a total of 90 consecutive days prior to the date of submitting the application.

Points to note

There is no need to provide proof of English language for Tier 1 Entrepreneur extension applications. It would be wise to include your dependents in your extension application, especially child dependants who have now turned 18 during your stay.

In addition, the applicant cannot have had any recourse to public funds, must have registered with the police (if required) and not have been employment other than working for the business or businesses you have established, joined or taken over.

Our team of UK immigration lawyers are specialists in the Tier 1 Entrepreneur visa route. We have significant experience with handling complicated scenarios, as well as straight-forward extensions. Often, our clients will have concerns in respect to the way their money is invested and also demonstrating they have hired the new members of staff.

Application for Indefinite Leave to remain

For a Tier 1 (Entrepreneur) visa holder, the qualifying period for applying for an Indefinite Leave to Remain (ILR) is typically 5 years; however you may still qualify for settlement if you meet other requirements. It is important to always check for the latest guidance before applying.

The Indefinite Leave to Remain visa category, also known as Permanent Residence, provide holders with the rights to settle in the UK without immigration restrictions. The earliest time to apply for settlement under this route is 28 days before you reach the qualifying period.

The Qualifying Period for a Tier 1 Entrepreneur Indefinite Leave to Remain

The qualifying period is the length of time (of stay) required to be able to qualify for the applying under this route.

Generally, you are eligible to apply for settlement under this category if you have lived continuously in the UK for 5 years.
Where an initial application has been approved, only the most recent five years will be considered.
It is safer that during the qualifying period, you avoid staying outside the UK for more than 90 days during the final 12 months prior to you application.
The longest time you may stay out of UK should not exceed 180 days in any year within the qualifying period.
Exceptions to this rule may apply if the absences (time outside the UK), are directly related to your employment in the UK.

Apart from the criteria highlighted above, certain specific criteria would have to be met in order to be able to apply for an ILR under this route: –

You have invested a minimum of £200,000 into one or more businesses in the UK.
You are either registered with the HMRC as self-employed or are registered with Companies House as a director of a new or an existing business three or more months before the date of application.
You must have either created full time jobs for at least 2 settled persons in the UK; or your investment activities have resulted in creating employment for at least 2 new full time jobs. It is important that the jobs must have existed for at least 12 months during your last grant of leave.
You have spent the qualifying period UK lawfully and the absences are not more than 180 days within a calendar year.

Accelerated Settlement – 3 years

As mentioned earlier, under certain circumstances you may be eligible to apply for settlement under this route after 3 years in the UK, if you have met the following conditions: –

The number of full time jobs created is at least 10.
The income generated by the business in either a single year or an addition of any of the incomes generated during the 3 year period is at least £5 million.

If you are applying for accelerated settlement on the basis that you have created 10 full time jobs, the evidence required is the same as for the creation of 2 new full time jobs.

Documentary evidence

Evidence that you have invested the relevant level of money into the business.
Evidence that you are registered as self-employed or as a director of a business.
Evidence that you have you have created 2 new full time jobs for settled workers

Documentary evidence for the acceleration settlement

The evidence required is the same as for the creation of 2 new full time jobs.
Audited or unaudited accounts which show the value of the business activity and that this reached at least £5 million (or shows net increase of £5 million where you have taken over an existing business).
The accounts must clearly show the name of the accountant and the date the accounts were produced. The accounts must be prepared and signed off in accordance with statutory requirements
If you have taken over an existing business, you should also supply provide an original registered accountant’s letter verifying the net increase in business activity.

Other Requirements

The following requirements may be need for an application under this settlement route.

Knowledge of life in the UK Test
English language test (This does not apply to individuals who have a degree taught in English or to certain English speaking nationalities)
You have to be free of any unspent convictions in the UK.

Note that after one year of Permanent Residence you may apply for British Citizenship.

Conditions for Stay – ILR

It is important to highlight that your ILR visa grants may be revoked on certain conditions. If you remain outside the UK for a long period of time and it appears that the UK is no longer your primary place of residence, it is possible that your ILR may be revoked. It is normally recommended that you do not remain outside the UK for a period more than 2 years.