Tier 1 Genuine Entrepreneur Test

The post relates to Tier 1 Genuine Entrepreneur Test and provides information on the following aspects of the UK Entrepreneur Visa:

  • Purpose of Tier 1 Entrepreneur Route
  • Elements of Genuine Entrepreneur Test
  • How the Genuineness Test is Conducted?
    • Business Plan
    • Additional Documents
    • Reasons for Refusal After Interview
  • What is Considered during the Evaluation Process?
    • Previous Refusals and Credibility of the Applicants
  • Rejection Decisions
    • Rise in Refusal Rate
    • Impact on Success Rate

For successful representation of your initial, leave to remain, extension and indefinite leave to remain application, administrative review and judicial review contact Tier 1 Entrepreneur Solicitors London.

Tier 1 Entrepreneur | Genuine Entrepreneur Test

Tier 1 Genuine Entrepreneur Test

The Tier 1 Entrepreneur immigration route is an effective route to allow entrepreneurs to set up and grow a business for delivering significant economic benefits to UK residents. Since its introduction in 2008, there has been a wide spectrum of activity on the Tier 1 (Entrepreneur) visa route. At the top end there are examples of Tier 1 (Entrepreneur) migrants establishing highly innovative, high growth potential businesses. At the bottom end of the spectrum, there is no significant activity that is neither entrepreneurial nor economically beneficial to the UK residents. In between, there is large proportion of Tier 1 (Entrepreneur) migrants establish low-value businesses with limited potential to grow or contribute to innovation or productivity growth.

Elements of Genuine Entrepreneur Test

All Tier 1 (Entrepreneur) migrants making an initial application are also subject to a genuine entrepreneur test and must therefore show that:

  • they genuinely intend and are able to establish, take over or become a director of one or more businesses in the UK within the next six months;
  • they genuinely intend to invest the requisite money in the business or businesses referred to;
  • the money is genuinely available to the applicant and will remain available to the applicant until such time as it is spent for the purposes of their business or businesses; and
  • they do not intend to take employment in the UK other than working in their business.

The genuine entrepreneur test can also be applied when applications for leave to remain and indefinite leave to remain are being considered. Here it is important to note that since entrepreneurship is a risky and, many genuine entrepreneurs fail; however, the low evidence of tax activity suggest that there is a reasonable amount of non-compliance, which makes genuine entrepreneur test altogether more critical extension applications.

How the Genuineness Test is Conducted?

The Genuine Entrepreneur Test for Tier-1 Entrepreneur can be conducted in the following three (3) ways:

  • where the evaluating officer deems it appropriate that there is no need for further evidence from an applicant, a paper genuineness consideration could be initiated on the evidence furnished with the application;
  • if further information is necessary from the applicant to make the paper genuineness consideration, the applicant is provided 28 calendar days from the date of request to submit this evidence;
  • if the credibility of the applicant could not be determined from a paper genuineness test, then the applicant could be interviewed either in person, by telephone or by video conference.

Business Plan

Tier 1 (Entrepreneur) migrants making an initial application are required to provide a business plan to the Home Office, setting out their proposed business activities in the UK and how they expect to make their business succeed. The viability and credibility of the business plan and market research into the chosen business sector are also taken into account, along with the criteria outlined above, as part of the genuine entrepreneur test applied by caseworkers.

From April 2015, applicants for entry clearance are required to submit a business plan and, where relying on funds held themselves, must provide evidence of the third party source of the funds if they have held the funds for less than 90 days. In addition, the genuine entrepreneur test was extended to cover applications for extensions and indefinite leave to remain under this route. Restrictions were also introduced for those switching from the Tier 1 (General) route.

Additional Documents

Additional information can be requested to support the assessment of the application, and Tier-1 Entrepreneur Application can be refused if the evidence is not provided. Any requested documents must be received within 28 calendar days of the date of the request.

Migrants must comply with any request made for them to attend an interview unless a reasonable explanation is provided as to why they cannot comply.

Reasons for Refusal After Interview

In most cases the applicant was unable to show sufficient knowledge about their business plan, or had no evidence to show that they had carried out any market research. There were a few cases where the caseworker had commented that large parts of the business plan seemed to have been taken from generic examples from a commercial website providing off-the-shelf business plans.

What is Considered during the Evaluation Process?

Whilst making the decision the following are considered:

  • the evidence submitted.
  • the viability and credibility of the source of the money, which is available for investment.
  • the viability and credibility of the migrant’s business plan and market research into their chosen business sector.
  • their previous educational and business experience (or lack thereof).
  • their immigration history and previous activity in the UK.
  • if the nature of the business requires mandatory accreditation, registration and/or insurance, whether that accreditation, registration and/or insurance has been obtained.
  • any other relevant information that can be considered within the context of the genuineness test for Tier 1 Entrepreneur Applicants as drafted in the Immigration Rules.

Previous Refusals and Credibility of the Applicants

If the applicant has had a previous Tier 1 (Entrepreneur) application refused on credibility grounds, a full Genuineness Test will be carried out and application can be refused if there is no reason to believe the applicant’s circumstances have changed to show they have now become a genuine entrepreneur.

Rejection Decisions

If the immigration officer is not satisfied with the genuineness of the application in relation to a points-scoring requirement in Appendix A of the Immigration Rules, then he would not award those points. Under the Tier-1 Genuine Entrepreneur Test, an application can be refused even if the migrant meets the required points total but the application failed to satisfy that the migrant is a genuine entrepreneur.

Rise in Refusal Rate

It is likely that the introduction of the genuine entrepreneur test has been a contributing factor in the rise in Tier 1 (Entrepreneur) application refusal rates which rose from 36 per cent in 2012 to 49 per cent in 2014 for in-country applications and for out-of-country applicants rose from 21 percent in 2012 to 44 per cent in 2014.

Impact on Success Rate

Since the year ending June 2014, just over half of Tier 1 (Entrepreneur) applications have been successful. The refusal rate for out-of-country Tier 1 (Entrepreneur) applications increased significantly in 2013, likely driven by the introduction of the genuine entrepreneur test. In the year ending June 2015, 2,033 Tier 1 (Entrepreneur) main applicant out-of-country applications were resolved, of which 975 were refused, indicating a refusal rate of approximately 48 per cent. This refusal rate had fallen back to 44 per cent in 2014 from its peak of 52 per cent in the year to March 2014, but has since risen again. The refusal rate for the Tier 1 (Entrepreneur) visa is rather high and is significantly higher than the refusal rates for the Tier 1 (Investor) and Tier 2 routes in the same period, standing at nine per cent and two per cent respectively.

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