LDSLWPADMIN

29 March 2019

Earlier this month, the Government announced the closure of Tier 1 (Entrepreneur) for new applicants from today and its replacement with the new Start-up and Innovator routes.

Start-up
This category is envisaged as a replacement to the Tier 1 (Graduate Entrepreneur) route which is due to close for new applications from 6 July 2019. The Start-up category is for migrants seeking to establish a business in the UK for the first time with applicants required to show that they have an innovative, viable and scalable business idea supported by an endorsing body.

There is no specific/minimum amount of investment required, though to show a viable business, some form of investment may be necessary.

Who can switch in-country?
Migrants in the following immigration categories should be eligible to switch into the Start-up category from inside the UK:

• Tier 1 (Graduate Entrepreneur);
• Tier 2;
• Tier 4 (General) (in certain circumstances); and
• visitors undertaking permitted activities as a prospective entrepreneur.

All other applications must be made from overseas.

Grant of leave
Successful applicants would be granted a two-year leave allowing them to work on their business for the majority of their time while also allowing other employment. They may then progress into the Innovator category which leads to settlement (whereas Start-up category on its own does not).

Innovator
Whilst there are notable differences between the two, the Innovator route is aimed as a replacement of the Tier 1 (Entrepreneur) category. This route is for experienced entrepreneurs seeking to establish a business in the UK and similar to the Start-up category, applicants would be required to obtain an endorsement by an approved body before applying for immigration permission. The minimum amount of investment is reduced from £200,000 for most applicants to £50,000.

Entrepreneurial teams are still allowed, however the investment funds can no longer be split between team members.

New business vs same business
There are two types of endorsements an applicant may apply for – one for a new business and one for same business. The type of endorsement applied for will vary depending on the applicant’s current immigration system and exact business proposal. Those already in the UK under the Innovator/Start-up/Graduate Entrepreneur routes would be able to apply for ‘same business’ endorsement in the event that they are pursuing the same business venture that was assessed as part of that (previous) grant of leave.

All other applicants would be required to apply for an endorsement as a ‘new business’.

New business endorsement will require the endorsing body to assess the proposal on the basis of its innovation, viability and scalability whereas, same business endorsement will be checking to establish whether for example:

• the applicant has shown significant achievements, judged against the business plan assessed in their previous endorsement;
• the business is registered with Companies House with the applicant listed as a director or member of that business;
• the business is active and trading,
• he business appears to be sustainable for at least the following 12 months (based on its assets and expected income, weighed against its current and planned expenses).
• the applicant has demonstrated an active key role in the day-to-day management and development of the business.

In certain scenarios, an Innovator may choose whether to pursue a new business or same business endorsement. Endorsing bodies would need to be satisfied the applicant intends to spend their entire working time in the UK on developing the new business venture(s).

Who can switch in-country?
Migrants in the following immigration categories should be eligible to switch into the Innovator category from the UK:

• Tier 1 (Graduate Entrepreneur);
• Tier 1 (Entrepreneur);
• Tier 2; and
• visitors undertaking permitted activities as a prospective entrepreneur.

All other applications must be made from overseas.

Grant of leave
Successful applicants would be granted a three-year permission leave following their initial grant of leave followed by two years at the extension stage. After five years in the category, migrants under the Innovator route would be eligible to apply for indefinite leave to remain in the UK (ILR).

Application process

In a process similar to the Tier 1 (Exceptional Talent) route, applications under the Start-up and Innovator routes would be two-fold:

1. Endorsement of business proposal: Migrants would be required to apply for an endorsement by an approved body by submitting a detailed business proposal. The endorsing body would need to ascertain that the proposal shows innovation, viability and scalability before it makes a decision on whether to approve it. This effectively removes the assessment process currently undertaken by Home Office caseworkers and places it in the hands of more experienced business and industry leaders. Approved bodies as announced by the Government today, include higher education institutions, capital venture firms and government departments
2. Application for immigration permission: Once an applicant has been endorsed, s/he will be required to submit their entry clearance/leave to remain application in the usual way.

Get in touch
For further information on recent and forthcoming changes to UK and US immigration law contact your assigned LDS lawyer or enquiries@lauradevine.com.