Immigration law can sometimes feel daunting if it is entertained as a first-timer without legal supervision. For this reason, it is essential to understand the differences and the fine print. Talking about UK immigration rules, there are many ways to come to the UK, but it is essential to understand which route fits the applicant's situation best.
Let's talk about entrepreneurs and how they can move to the UK by setting up their businesses. Among the entrepreneurs, there's always confusion about the visa route they should take. They have quite a few options, but we will talk about self-sponsorship and innovator founder visa routes in this blog, as they are the most preferred.
What is self-sponsorship?
Self-sponsorship is a term that generally refers to when a person obtains a visa or work permit without being sponsored by another employer. Instead, the individual sponsors themselves, often through establishing a business or investing in the host country. It's a method used by entrepreneurs, investors, and some professionals to reside and work in the UK.
Most people seeking self-sponsorship have entrepreneurial aspirations and wish to expand or set up their business in the UK. This approach provides great flexibility compared to the constraints of employer-sponsored visas and opens several opportunities to attract diverse global talent with the help of a sponsor licence. This visa type also allows easy transition from other visa types, such as student, graduate, or work visas. This visa can also lead to permanent residency in the United Kingdom.
Stages in the self-sponsorship visa process and the costs involved
As mentioned, self-sponsorship allows business people to sponsor themselves and hire talent worldwide. The whole process of self-sponsorship is divided into different stages and is mentioned below:
- Setting up a business in the UK: The first step for self-sponsorship is to set up or have a business in the UK that can afford to hire global talent and may or may not have a sponsor licence. The UK government hasn't kept any brackets on the amount of initial investment in the business, and it depends on the business requirement.
- Sponsor Licence: Once the business is up and running, it must apply for a sponsor licence if they don't already have one. This will allow the business to hire people from outside the UK legally. The initial cost involved in sponsor licence application is the application fee ranging from £536 to £1476 (small businesses pay the lower end of this range).
- CoS: After getting the sponsor licence, the next step is to issue a certificate of sponsorship (CoS) to hire the skilled worker. For people applying from outside the UK, a defined CoS is issued; for applicants within the UK, an undefined CoS is issued. Every time the business wants to hire a skilled worker, it will have to pay a CoS fee of £199 per worker.
- ISC: The business will need to pay the immigration skills charge when hiring through the skilled worker visa route, and it can come up to £364 (for small and charitable businesses) and £1000 (for medium and big businesses) for a 12 month period.
- Legal consultation: The business might also have to pay for any legal consultation fee as businesses tend to take help from corporate immigration solicitors in such matters.
In addition to the above costs the business faces, the applicant will need to pay for the Skilled worker visa fee (£719 to £1636 depending on where they apply from and for how many years), Immigration Health Surcharge (£1035 per year of sponsorship) and any legal fee if applicable. To qualify for the Skilled Worker Visa, the applicant must meet the English Language proficiency at CEFR B1 level.
What is the Innovator Founder Visa?
This visa type is unique. It provides an opportunity for entrepreneurs with unique ideas to set up their businesses in the UK. No particular investment figure is mentioned for this visa, but the business must have the potential to grow in the future. Successful innovators are granted a three-year visa and must meet the Innovator Visa Requirements.
Having an innovative business idea isn't the only requirement, as the entrepreneur must prove it with the help of a business plan laid out. This business plan needs to be endorsed by a UK government-appointed endorsing body.
Stages in the innovator founder visa process and the costs involved
An innovator founder visa is usually given to entrepreneurs with exceptional business ideas who want to explore the UK market for the business. The steps involved in this visa type differ from the self-sponsorship visa type and are as follows:
- Business plan: The first step in this visa type is the business plan, which outlines the business strategies and approach to the unique business idea. The most important aspect of the business plan is that it must be innovative, viable and scalable.
- Endorsement from an appointed body: For the innovator founder visa, the business plan needs to be endorsed by a UK government-appointed endorsing body. The purpose of this endorsement is to identify the business's needs in the UK market, its sustainability, profitability, and scope in the future.
- Endorsement fee: Under the updated system, founders are required to pay set fees for endorsement consideration, that is, £1,000 (excluding VAT) for the initial endorsement review and £500 (excluding VAT) for each checkpoint assessment at 12 and 24 months.
- Visa Application: Once the business receives a letter of endorsement, they can use it to make their Innovator Founder Visa application. The visa application fee to the Home Office ranges from £1036 to £1292, depending on the location of the application.
- Initial investment requirements: There hasn't been any fixed amount of initial investment required, but the business must be able to fund itself and bear the business's expenses.
- English Language requirement: To qualify for the Innovator Founder Visa, the applicant must meet the English Language requirements. This means one either demonstrates English proficiency at the B2 level on the CEFR with an English language test, has a degree taught in English, or is a national of majority English-speaking countries like Australia, Canada, New Zealand, or the USA, among others.
- Support funds: To demonstrate sustainability in the UK, the applicant must prove that they have held at least £1,270 in their bank account as the main applicant for at least 28 days before the application submission date.
Who can apply for these visas?
A self-sponsorship visa is open to any business person who wants to establish a business in the UK or has a pre-existing business in the UK for acquisition. They should have enough funds to fulfil the business requirements and need to appoint key persons with responsibilities within the business. They also need a UK-settled or British citizen as an authorising officer.
An Innovator Founder Visa can be applied by someone who has a brilliant idea and wants to build a business around it. The UK government asks businesses to have ideas that are unique, achievable and have the potential to expand in the future. The three key terms to define the business idea are innovative, viable and scalable.
A comprehensive table of comparison
| Self-Sponsorship | Innovator Founder Visa |
|---|---|
| As the company's director and sole shareholder, the applicant can have full ownership if they choose to be. | Applicants aren't required to be the only founder of the business. They can be part of an entrepreneurial group, sharing the same business concept and strategy with another member of the Innovator Founder team. |
| The self-sponsorship route is open to businesses of all types. | This opportunity is designed for seasoned entrepreneurs with an innovative, viable and scalable business idea. |
| No letter of endorsement is required from an endorsing body. | An endorsement letter is needed from a government-appointed endorsing body. |
| The business can already exist in the UK or must be set up in the UK and needs a sponsor licence. | The business concept must be innovative and distinct, setting it apart from existing offerings in the market, and no sponsor licence is required. |
| Eligibility is extended to accomplished entrepreneurs pinpointing a business prospect in the UK. | Participation is not permissible for businesses that are already operational. |
| The visa will not be terminated since the owners will sponsor themselves. They do, however, need to meet sponsor visa licence obligations. | If the endorsement is withdrawn, it could lead to the termination of the innovator founder visa. |
| The business owner can take up 20 hours a week worth of work apart from their role in the business. It must be in the same occupation code as the main role and should come under the shortage occupation list. | They can engage in employment outside of their primary business, provided that the work falls under the category of 'skilled work.' This includes jobs on the Skilled Worker eligible occupations list or those requiring at least a level 3 qualification. |
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Originally Published 12 April 2024
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.