On 1st August 2019, the UK Tier 1 (Entrepreneur) Visa will be abolished. You’d be forgiven for thinking that this may be a strange mood given Brexit and its ramifications for foreign direct investment.
Replacing what could fairly be viewed as a ‘one-size-fits-all’ entrepreneur visa, are two more specific, and arguably more nuanced visas: an ‘Innovator’ and ‘New Business / Start-Up’ visas. These changes have been made, according to Immigration Minister Caroline Nokes, to stop people who, “…abuse our system and that is why I am bringing forward new measures, which will make sure that only genuine investors who intend to support UK businesses, can benefit from our immigration system.”
Till now, the Tier-1 Entrepreneur Visa has been considered by many to be a ‘gold-plated’ visa because investors have been able to secure permanent residency, and then full citizenship after six years. In essence, this means that anybody rich enough can spend €500,000 to gain British citizenship. The scheme has been blamed for rising levels of money laundering, influence peddling and embezzlement. The significant inflow of investors from China, Russia and the Middle East have also been blamed for skewing the London property market.
It is crucial that anybody who is thinking of applying to enter the UK as an investor or entrepreneur take expert advice. Here are the nuts and bolts:
The start-up visa will be open to those starting a business for the first time in the UK, replacing the Tier 1 (Graduate Entrepreneur) route. It will apply for people of any background, not just graduates, and they will have double the amount of time, two years, to make their business a success before they need to make a further application.
The Innovator route will be for more experienced business people who have £50,000 to invest in their business, down from the £200,000 required under the previous scheme.
Investors will now have to show the source of wealth for two years rather than the current 3 months. However, it is worth noting that investors or HNW individuals have always had to demonstrate wealth – this just makes sure that the wealth the investor holds is stable. In addition, UK banks will need to confirm they have conducted Know Your Client and Due Diligence checks when opening the UK bank account for the investor, but these checks are something the bank has to do anyway as part of its FCA regulation.
The introduction of a more affordable Innovator Visa (investment requirement down to £50k from £200k) makes it easier for innovators to bring their ideas to the country. With Brexit looming, it is important for the UK to do all it can to attract innovators from around the world, not only from EU member states. This creates a level playing field and should be welcomed by aspiring business leaders around the world who would like to build their business in the UK. Those with a Start-Up Visa will also have much more time to make a success of their business before making a further application.
Are you contemplating making an Entrepreneur visa application or part way through the application process? If so, you may need urgent expert legal advice on your application or options.
The Innovator Visa will be an alternative.