General Overview of the Tier 1 Entrepreneur Route
The Tier 1 (Entrepreneur) category of the Point Based System is for those who wish to set up, join in or take over a business in the UK and be actively involved in running this business.
Entrepreneurs are required to invest in the business £200,000 which can be their own money or the money provided by a third party, in other words, a borrowed capital.
There is a provision for a reduced amount of investment of £50,000 for those switching from Graduate Entrepreneur category or where the money is provided by an FCA regulated venture capital firm, entrepreneurial seed funding competition endorsed by the Department of International Trade, or a UK government department.
Applicants for Tier 1 Entrepreneur visa are required to demonstrate the availability of funds for investment, maintenance funds, knowledge of the English language to B1 level, and be accepted as a genuine entrepreneur by demonstrating a thorough and viable business plan.
Tier 1 Entrepreneur visa applicants and their dependants have to be of good character. As part of entry clearance requirements, they also have to produce an overseas criminal record certificate as evidence of good character.
The visa is initially granted for three years and then extended for another two years. After five years of residence in the UK (or after three years if certain conditions are met), Tier 1 Entrepreneur can apply for indefinite leave to remain. British citizenship is normally possible through naturalisation after five years of residence, including one year of residence with settled status.
There is no right of appeal against refusal of a Tier 1 Entrepreneur application. Where there is an error on behalf of the Home Office an application can be made for an administrative review of the decision.
Applying as an Entrepreneurial Team
Applications for Tier 1 Entrepreneur visa can be made by a team of two business partners who rely jointly on the same capital funds. Both partners of the team should have access to the full amount of investment capital and have equal control over the funds. This means that the funds should be placed either in a joint bank account or, if provided by a third party, there should be a specific reference in the documents confirming availability of the funds to both members of the entrepreneurial team. The required amount of investment remains £200,000 or £50,000 where applicable.
Both members of the entrepreneurial team can bring their dependants (spouse or unmarried partner and children).
Those who intend to run a family business may consider making an application as an entrepreneurial team or apply as the main applicant (Entrepreneur) and the dependant. There are some subtle differences in terms of permitted absences from the UK, the earliest time for settlement and flexibility to take up employment offers which might condition your choice of strategy. Your legal representative will guide you through these options in the initial consultation.
Who can rely on £50,000 investment funds as opposed to £200,000?
Capital requirement of £50,000 apply if the funds come from one or more of the following sources:
- A UK entrepreneurial seed funding competition endorsed by the Department for International Trade (DIT)
- A UK government department making funds available for the purpose of setting up or expanding a UK business
- A venture capital firm registered with the Financial Conduct Authority
OR, for applicants for leave to remain inside the UK:
- If the applicant was last granted Tier 1 Post Study Work visa and has been registered as a self-employed or a company director in an NQF4 SOC code occupation since before 11 July 2014;
- If the applicant is switching in-country from the Tier 1 Graduate Entrepreneur route.
The Department for International Trade’s (DIT) Global Entrepreneur Programme (GEP) helps overseas entrepreneurs and early-stage technology businesses or start-ups that want to relocate their business to the UK. Your legal representative could help with approaching the DIT endorsed seed fund competition organisers listed below:
- TechStarts London
- Oxygen Accelerator
- Entrepreneur First
- Emerge Education Accelerator
- Startpalnet NI
- Pi Labs
Who Can Switch to This Category in the UK
Switching into Tier 1 Entrepreneur route in the UK is permitted for holders of the following visas:
Tier 1 Graduate Entrepreneur
Tier 2 (any subcategory)
And with restrictions:
Tier 4 Students
Restrictions on Switching
Tier 1 General migrants (Appendix A, Table 4) have to show that they have been continuously engaged in business or registered as self-employed since before 6 April 2015, and the business provides services listed in a SOC code in NQF4 or above (Appendix J).
Tier 1 PSW migrants (Appendix A, para 36B and Table 4) – have the benefit of a reduced capital requirement (£50,000). However, unless capital is provided by an SFC, Government Department or VC firm, have to demonstrate that they have been continuously engaged in a business or registered as a self-employed since before 11 July 2014, and have been providing services at NQF level 4 or above as per SOC codes of Appendix J
Tier 4 Students (including Tier 4 child students) (Appendix A, para 36A, and Immigration Rules para 245DD(e)(xxi)) can only rely on capital provided by an SFC or UK Government Department and can switch in the UK if sponsored by
- UK recognised body in receipt of public funding as a Higher Educational Institution;
- Overseas HIE to undertake a short term study abroad programme;
- Embedded college offering Pathway Courses;
- Independent school
If the application is being made from outside the UK, the applicant is required to demonstrate £3,310 in personal savings as funds available for maintenance. This money has to be separate from the main investment capital and cannot be provided by a third party. The money has to have been in the applicant’s bank account for 90 days before the application is made and throughout the application process.
If the application is made in the UK maintenance requirement is £945 in personal savings. Again, the money has to have been in a bank account for a continuous 90 day period prior to the date of the application.
Maintenance requirements for dependants of Tier 1 Entrepreneur migrants, where Tier 1 migrant is outside the UK or has been in the UK for less than 12 months, are £1890 per dependant held in a bank account for at least 90 consecutive days.
Where maintenance funds are held outside the UK in a non-sterling account, currency conversion rate is used as of the date of the application (the date application is submitted online and payment is made, not the date of the appointment with the Entry Clearance Office). The exchange rate is checked strictly using the OANDA website. There is no requirement to make currency conversion retrospective for the 90 days period.
Do the funds have to be in the UK?
If the application is made outside the UK, the funds may be held in a regulated financial institution abroad provided they can be transferred to the UK for the purpose of investment into a UK business. Your immigration advisor will guide you through the correct format of supporting documents and will check if the bank is properly regulated. However, it is worth noting that the funds should not be held in any of the banks blacklisted in Appendix P of the Immigration Rules.
Entrepreneurs may rely on capital funds provided by third parties.
Where third party support is provided, the applicant does not have to demonstrate that the money has already been transferred to his or her bank account. The money may remain available with the third party and a declaration has to be made confirming the availability of funds and intention of the third party to invest on behalf of the applicant.
Applicants may mix their own funds with the funds provided by a third party.
It may be helpful to know that there is no requirement to hold the funds in a bank account for 90 days period where the funds are provided by a third party.
Evidential requirements are quite strict and your lawyers will guide you through the type and format of the documents required.