The UK Government has announced new immigration rules to
incentivise foreign entrepreneurs to invest in the UK. To encourage
more non-European wealth creators to bring business opportunities
and growth to the UK, the entrepreneur rules will be relaxed from 6
As these changes are more favourable than the equivalent rules
for other countries - including US rules under the "Startup
Visa Act" - they have been welcomed by the business world.
An entrepreneur can qualify for an Tier 1 Entrepreneur visa if
he/she invests £50k or more (down from current £200k
minimum) into an existing or new UK business, but only if the seed
money comes from a reputable source. A qualifying source of funding
will be any of: (a) VC firm regulated by the FSA, (b) UK
entrepreneurial seed funding competition endorsed by UKT&I
or (c) a UK government department for the purpose of establishing
or expanding a UK business. Otherwise a minimum £200k
investment will be required, but this can include money from third
party contributors, such as investors or family members, provided
that the entrepreneur has unrestricted access to the funds.
For either the £50k or £200k investment, the funds
can be shared between an entrepreneurial team of up to 2 people,
and both business partners can qualify for a visa (only one is
As is currently the case, the entrepreneur can qualify for
settlement (permanent residency) after 5 years - 3 years initially
plus 2 years extension, but to extend the migrant must prove (a)
the required investment was made, and (b) he/she has created 2 full
time equivalent jobs for settled workers in the UK.
There will be a fast-track to permanent residency after 3 years
(rather than 5) if the entrepreneur creates 10 jobs for settled
workers or has achieved an annual turnover of at least £5m
for the UK business.After taking feedback from the business
community, the government has announced more flexibility for
migrants with overseas business interests - they can remain outside
the UK for up to 180 days each year (doubled from the current
maximum of 90 days) and still qualify for permanent residency,
which is great news for mobile entrepreneurs.
There will be a new Prospective Entrepreneur visa category,
which will allow migrants to come to the UK as a visitor to secure
funding and make arrangements for the business, before they switch
into the full Entrepreneur visa from inside the UK. This avoids the
migrant having to return to their home country to apply for a visa
and may mean that an expedited visa decision is available.
There is more good news for growth companies looking to expand
by recruiting the brightest and best candidates. Although the Tier
1 General route is closing in the UK shortly, to compensate for the
loss the Tier 2 rules will be relaxed from 6 April, making it much
easier for businesses to recruit skilled employees from other UK
employers (this route has been frozen to many SMEs since last year
under interim restrictions). There will also be a total exemption
from advertising and the visa cap for the recruitment of any
employee on a UK salary of £150k or more. Finally, although
the future of Tier 1 Post Study Worker - for recent UK graduates -
is uncertain, any non-European migrants on that visa that have
worked for an employer for 6 months or more can extend simply into
Tier 2 General, which is a welcome change to the current
With the unavailability of Tier 1, the government is pushing UK
employers to operate Tier 2, which requires the UK business to have
a sponsor licence. We recommend all UK employers should consider
obtaining a licence, even if one is not required immediately. With
the current restrictions in place, immigration planning is crucial
to ensure that when an urgent recruitment need is identified,
employers have the right framework in place to hire a non-European
applicant without unnecessary delay.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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