​CHANGES TO TIER (1) VISA CATEGORY UK

alpha_shindara_legal_website_-changes_to_tier_1_visa_category.docx
File Size:	19 kb
File Type:	docx

Download File

---

RSS Feed

​CHANGES TO TIER (1) VISA CATEGORY

The UK government has made changes to Tier (1) visa category, the changes include the following:

•  Introduction of new start-up and innovation visa categories to replace the Tier 1 (Graduate Entrepreneur and Tier 1 (Entrepreneur) routes with application in these categories assessed by trusted endorsement bodies vetted by the UK government.
•  Investment threshold will be removed for the start-up visa and reduced to GBP 50,000.00 for the innovator category.
•  English language level for both categories will be set at B2 (higher than B1 for the former category).
•  There will be increased scrutiny over the source of funds for Tier 1 investor applicant by extending the requirement to hold the investment funds from 90 days to two (2) years and by restricting the rules to make it explicit that banks must carry out a due diligence checks before opening accounts for potential applicants and,
•  Investments in UK government bonds would be excluded for all new Tier 1 Investor applicants to encourage investment in alternative forms. 

The proposed changes have taken effect on March 29, 2019. Applications under the existing Tier 1(Graduate Entrepreneur route has ended on July 5 2019.


THE START UP VISA

•  Tier 1 (Graduate Entrepreneur) route has been closed. The start-up visa would replace the Graduate Entrepreneur route which has since closed to new applicants as from 5 th July 2019.

• Expand eligibility- The category would be open to applicants starting a new business for the first time in the United Kingdom not just recent graduates.
•  Removal of funding requirements- Applicants would not need to have secured any initial funding for the proposed business.
•  New endorsement bodies-Applicants would need to be endorsed by an independent endorsing body which has been vetted and approved by the UK.
•  Longer visa validity- The visa will be granted for two (2) years initially (doubled from one (1) year under the Graduate Entrepreneur category) and applicants will be able to switch into the innovator category to continue processing their business.

•  Effect on existing Tier 1(Graduate Entrepreneur). Transitional provisions would allow Tier 1 (Graduate Entrepreneur) to switch into the start –up route or alternatively continue to switch into Tier 1 (Entrepreneur) category until July 5 2021.

THE INNOVATOR VISA

•  Tier 1 (Entrepreneur) is closed. The innovator visa would replace the Tier 1 (Entrepreneur) route which has now been closed to new applicants on March 29, 2019.

•  New expert endorsement requirement- Applicants would need to be endorsed by designated endorsing bodies approved by the government, who would assess whether the applicant proposed business is innovative, viable, or scalable. The Home Office has not confirmed which bodies would be authorised to issue endorsement yet, but has set out criteria with which the endorsing bodied must comply.

•  Eligibility for Indefinite Leave to Remain (Settlement) - Innovators which satisfy at least two of the Home Office new criteria may qualify for settlement after 3 years (Down from five years under the former route). The criteria include:

1.  Investing at least 50,000.00 GBP into a business in the UKo Doubling the business customers
2.  Apply for intellectual property after research and development activities.
3.  Generating an annual gross revenue of 1 million GBP.
4. Creating 10 full-time jobs for resident workers.

•  Effect on existing Tier 1 (Entrepreneur). Existing Tier 1 (Entrepreneurs) can continue to extend their visa under the current rules until April 5, 2023, but would be required to provide more detailed information on their role in the business and the jobs they have created. Settlement applications for existing entrepreneurs will remain open until April 5, 2025.

THE INVESTOR VISA

•  Increased scrutiny over funding – New investor visa application would need to prove they have had control of the required GBP 2,000,000 investment funds for the last 2 years (up from 90 days under the former rules). If funds have been held for a shorter period, applicants would need to demonstrate the source of the investment funds.
•  An expanded test will allow the Home Office to refuse application where there are grounds to believe the investment funds have been transferred intentionally by unlawful means.

• Further rules are been restricted to make it explicit that banks must carry out all due diligence checks before opening accounts for potential applicants.
•  Investment in government bond no longer accepted. Under the new guidance investment in government bonds has been precluded to incentivise investment in active and trading UK companies.

• Effective date- The changes has become effective on March 2019. Transitional provisions are in place to protect existing Tier 1 Investors, who can apply to extend their visa under the existing rules (subject to some minor alterations) until April 5, 2023, and apply for settlement until April 5 2023.

The above proposal do not affect the Tier 1 (Exceptional Talent) category.


IMPACT

The changes should broaden the scope for overseas entrepreneurs to start a business in the United Kingdom with reduced or no prior funding. The changes would also place the role of assessing the viability of any proposed business on new endorsing bodies, rather than Home Office officials. By contrast, the changes require prospective Tier 1 Investors to demonstrate the source of their funds over a much longer period. The changes should also encourage direct investment in the UK companies rather than via government bonds.