A guide to starting up a UK business

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The Tier 1 (Entrepreneur) visa is for individuals or two-person teams to either start up at least one UK company or to invest and become director of an existing UK business. The visa category is the only work visa route aside from the Tier 1 (Investor) visa to allow an individual to enter the UK without an offer of employment in the UK and set up his or her own company or to invest and join another UK company. 

How do I qualify for a Tier 1 (Entrepreneur) visa?

The requirements for the Entrepreneur visa can essentially be divided into the following three categories:

1.    Start-up Capital:

Applicants need to prove that they have access to cash to invest into their businesses. The amount of cash required in most cases is £200,000 unless the applicant has either secured funding from a venture capitalist firm, a seed-funding competition or is switching from the Tier 1 (Graduate Entrepreneur) visa. In these three latter scenarios, the applicant will need to have access to £50,000. 

The Home Office will want to check that the cash held is under the full control of the applicant, even prior to being gifted following the visa approval, and that the applicant fully intends to invest the money, which leads into requirement number 2:

2.    Business Idea:

To distinguish the Tier 1 (Entrepreneur) visa from the Tier 1 (Investor) visa, the latter requiring ten times the amount of cash, the Entrepreneur route is assessed on the plans that the entrepreneur has to invest his or money into a viable company with a view to making the company financially successful. 

A business plan is compulsory, and the plan is assessed alongside the individual applying as to whether or not the civil servants of the Home Office trust that both are credible and viable. The focus is less on a professional analysis of the prospects of the business and more on a critical assessment on whether or not the applicant is more than a person with access to the pre-requisite level of cash alone.

The better the plan and the better suited the entrepreneur, the higher the chance that the Home Office trust that the start-up capital will be invested into the business. This is the essence of the ‘genuineness’ test that most Tier 1 (Entrepreneur) visas are refused on. 

3.    English Language:

In keeping with the assessment of the credibility of the individual, the Home Office concluded that an entrepreneur can only be successful in the UK if he or she has a sufficient level of English language. Therefore, there is also a requirement to have demonstrated a sufficient level of English with evidence as prescribed by the Home Office.

What do I have to do once I have a Tier 1 (Entrepreneur) Visa?

The initial Tier 1 (Entrepreneur) visa, issued for three years, is granted on a promise of what the entrepreneur intends to do. After three years, the extension visa is granted on reflection of what the entrepreneur has done. 

An entrepreneur is expected to have registered as a director of a limited company (or as a sole trader) within a specific timeframe, invested the required amount into the company and be able to demonstrate the cash has been spent in the running of the business, as well as having created two full-time jobs for at least 12 months each. 

The entrepreneur also needs to present a plan for the continuation of the business for the next two years of the visa leading to indefinite leave to remain after five years. 

At year five, to qualify for indefinite leave to remain, two 12 month full-time job positions have to be presented again among other requirements.

In many cases, plans change and entrepreneurs invest in companies without close attention to the immigration rules with regards their extension. It is important to be mindful of the rules so that the setting up and investing into the UK company fits with the requirements of the immigration rules. There is no other application to make if the extension application cannot be made, and so getting it wrong means leaving the UK and your UK business behind. 

How do I qualify for a Tier 1 (Graduate Entrepreneur) Visa?

The Tier 1 (Graduate Entrepreneur) visa is issued for one year initially, but extendable to two years, and is for those who have been studying in the UK on a Tier 4 (General) student visa and who have been endorsed by their own university for having presented a proposal for a UK business. The university endorsement allows the individual to make an application for a Tier 1 (Graduate Entrepreneur) visa. 

What does the Tier 1 (Graduate Entrepreneur) allow me to do?

The Graduate Entrepreneur visa allows the holder to work in the UK and to start his or her own visa. The aim for the visa is to transition into the Tier 1 (Entrepreneur) visa after one or two years with a lower capital requirement of £50,000 as opposed to £200,000.

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