This guidance relates to Tier 1 entrepreneur visa requirements for entry, leave to remain, extension and ILR applications after March 29, 2019. Accordingly, the post explains how an applicant can apply under the HS Tier 1 entrepreneur migrant route. And also explain the how to apply for for Tier 1 Entrepreneur Visa after March 29, 2019, in the light of Statistics and Success Rate 2008-18. Tier 1 Entrepreneur Visa Requirements for EC, Extensions and ILR. The Guidance Notes relating to Maintenance Funds, English Language, Entrepreneur Team, Genuine Entrepreneur Test (Business Plan). Study, Work Restrictions, Qualifying Period for ILR, Job Creation and Tier 1 Entrepreneur Visa Refusal Reasons.
Applying for Tier 1 Entrepreneur Visa after March 29, 2019
Indeed, effective from March 29, 2019, the Innovator visa UK under Appendix W of the Immigration Rules has replaced Tier 1 entrepreneur. However, in terms of paragraph 245DB(a) of the Immigration Rules, the Tier 1 entrepreneur migrants in the UK can continue to apply for the extension and settlement under the route till 5 April 2023 and 5 April 2025, respectively. Nevertheless, the Home Office will continue to accept the Tier 1 entrepreneur entry clearance applications after March 29, 2019, from applicants who have held Tier 1 Entrepreneur or Graduate Entrepreneur leave in the past 12 months. Likewise, the Home Office will continue to accept leave to remain applications from applicants, whose last grant was under Tier 1 Entrepreneur or Graduate Entrepreneur. Moreover, dependants can still apply to join applicants who have obtained leave for Tier 1 Entrepreneur.
Deadline for Tier 1 Entrepreneur Extension and ILR
Quite clearly, the extension applications for Tier 1 Entrepreneur migrants will remain open until 5 April 2023. And settlement (ILR) applications until 5 April 2025. Accordingly, applicants who wish to apply for ILR under Tier 1 entrepreneur route need to ensure that they do not have excessive absences from the UK and can meet the specific Tier 1 Entrepreneur ILR requirements.
In fact, switching applications for Tier 1 (Graduate Entrepreneur) applicants will remain open until 5 July 2021. Accordingly, the Tier 1 entrepreneur extension applications will remain open for these individuals until 5 July 2025. And settlement (ILR) applications until 5 July 2027. However, the Home Office will not accept the Tier 1 entrepreneur applications the dates listed above.
Who can switch to Tier 1 entrepreneur after March 29, 2019?
Perhaps, before March 29, 2019, a person can switch to Tier 1 entrepreneur from a multitude of migrants routes such as Tier 1 general, investor, graduate entrepreneur, business person, a participant in the fresh talent – working in Scotland scheme, post-graduate doctor/dentist, self-employed lawyer, work permit holder, Tier-2 migrant, a prospective entrepreneur, Tier 4 student etc. However, after the changes effective from March 29, 2019, only a few types of applicants can switch to Tier 1 entrepreneur visa route from inside and outside the UK. Indeed, if a person is already in the UK then can switch to a Tier 1 entrepreneur visa if he/she:
- is on a Tier 1 graduate entrepreneur visa in the UK
- has switched to a Start-up visa from a Tier 1 Graduate Entrepreneur visa during the second year
Accordingly, a person can stay in the UK for 3 years after switching to Tier 1 entrepreneur visa. Moreover, after March 29, 2019, a person can apply to switch to a Tier 1 Entrepreneur visa if he/she has a:
- valid Tier 1 Graduate Entrepreneur visa
- valid start-up visa and the person switched from a Tier 1 Graduate Entrepreneur visa for the second year
- Tier 1 Graduate Entrepreneur visa that expired less than 12 months ago
- Start-up visa that expired less than 12 months ago and the person has switched from a Tier 1 Graduate Entrepreneur visa for the second year
Tier 1 Entrepreneur Visa Requirements
Perhaps, in a nutshell, the Tier 1 (Entrepreneur) category is for non-EEA nationals who wish to invest a min capital of £200,000 or $50,000 in the UK through setting up or taking over one or more businesses in the UK. And the Tier 1 entrepreneur migrant also need to actively involved in the running of the business. Moreover, the Tier 1 entrepreneur visa is points-based. Therefore, an applicant needs to score 95 points for the investment in business (75), language (10) and maintenance funds (10). However, apart from scoring 95 points, since Jan 2013 an applicant also needs to satisfy the requirements relating to genuine entrepreneur test and business plan. And for extension and ILR applications, the Tier 1 entrepreneur migrants also needs to abide by the conditions of leave to remain in the UK.
Apparently, when introduced in 2008, the entrepreneur route for migrant was essentially a points-based application. However, over the years due to the abuse of the route, the Home Office does not assess and decide application on points. And apparently, there are a lot of subjective factors such as an applicant’s:
- personal academic background
- business plan
- market research
- nature of business
- job creation
Accordingly, the evaluation of all these factors leads to the subjective nature of the application so as to establish the genuineness of investment funds, business activity and job creation. Certainly, the entrepreneur route is only for establishing a genuine business in the UK. However, most of the applicants tried to seek UK settlement under the route without doing a meaningful business activity.
Tier 1 Entrepreneur Visa Statistics 2008-18
Tier 1 Entrepreneur Visa Success Rate 2008-18
During the 2008-18, a total of 47,837 applicants made successful Tier 1 entrepreneur applications. Therefore, the average Tier 1 entrepreneur visa success rate has been 59.20%. Moreover, a total of 32,746 applicants made unsuccessful applications. Accordingly, the average Tier 1 entrepreneur visa refusal rate has been 40.53%. Moreover, a total of 214 and 4 applications withdrawn and lapsed, respectively.
Tier 1 Entrepreneur Visa Statistics 2008-18
Tier 1 Entrepreneur Visa Entry Clearance Requirements
Quite clearly, an applicant needs to score 95 points for Tier 1 entrepreneur entry clearance visa application from outside the UK
- if the applicant has access to funds then gets 25 points
- 25 points are available if funds are held in one or more regulated financial institutions
- 25 points are available if the funds are disposable in the UK. For Migrant applying for leave to remain, the funds are required to be held in the United Kingdom
- ten (10) points are for meeting the requirement relating to B-1 Level of English Language
- ten (10) points are for maintenance funds to support the applicant and any dependants in the UK
Tier 1 Entrepreneur Investment Funds Requirements - 75 Points
Those who apply under the Tier 1 (Entrepreneur) category must demonstrate that they have access to £200,000 which they will invest in one or more businesses in the UK. The funding must be held in one or more regulated financial institutions, must be disposable in the UK, and must have been held by the migrant for at least 90 days unless it is being provided by a third party. However, an applicant can apply for a Tier 1 entrepreneur visa with a min of £50,000, if funding comes from:
- a registered venture capital firms regulated by the Financial Conduct Authority (FCA); or
- an entrepreneurial seed funding competitions (e.g. accelerator programmes) listed on the UK Trade and Investment (UKTI) website; or
- UK government departments or devolved government departments in Scotland, Wales or Northern Ireland. And the funding is available for the specific purpose of establishing or expanding a business
Maintenance Funds - 10 Points
Indeed, the Tier 1 Entrepreneur visa issues with a condition of no recourse to public funds. Therefore, applicants need financial savings to support the cost of living in the UK. Accordingly, as per Appendix C, an applicant requires to score 10 points for the requisite level of maintenance funds in financial savings.
Accordingly, for entry clearance and leave to remain applications, the main applicant requires £3,310 (or equivalent in local currency) and £945, respectively. Moreover, there are no requirements for maintenance funds for ILR (settlement) applications under the Tier 1 Entrepreneur route. Certainly, for points scoring, the funds need to be in a personal savings account in a regulated financial institution for at least 90 consecutive days before the application date. Apparently, any money earned is not acceptable, when the applicant was in breach of the UK’s immigration laws, as evidence of maintenance funds.
Any dependant wishing to either apply with the main applicant or subsequently join the main applicant need to provide evidence that they have sufficient funds. However, if a dependant is applying as the family member of Tier 1 (Entrepreneur) migrant then he/she cannot use the same funds to meet the maintenance requirement that the Tier 1 (Entrepreneur) has already used to meet the requirement (Appendix A of the Immigration Rules).
Accordingly, for entry clearance and leave to remain applications, each dependant usually requires £1,890 and £630, respectively. However, if the Main Applicant is already in the UK for more than six months then for an entry clearance application the dependant only requires £630/- instead of £1,890/-.
Dependants Joining the Main Applicant
As per Appendix E, the level of maintenance funds required for the dependant applicant(s) depends on the length of time the main applicant is in the UK. If the main applicant is in the UK for less than six months then £1,810/- are required for each of the dependant family members i.e. spouse and children under 18 years of age. However, if the main applicant is in the UK for more than 6 months then the requisite maintenance funds per dependant are £630/-.
For instance, the Tier 1 Migrant has been in the UK for 6 months and is making an application at the same time as their spouse and two children. Accordingly, the migrant requires to have £1,890 for spouse and a further £1,890 for each child. And also £945 for own support. In total, the family will require evidence that they hold £6,615 in available funds (£1890 x 3 = £5670+£945). However, if the same migrant had been present in the UK for two years, the applicants would only require to have £2835 funds (£630 x 3 = £1890 + £945) for maintenance.
Proof of the Tier 1 Entrepreneur Maintenance Funds
For scoring 10 points for Tier 1 entrepreneur maintenance funds, an applicant needs to furnish cogent and verifiable evidence of the financial savings in a regulated financial institution. However, if an applicant fails to do so then the caseworker/ECO is likely to refuse the application. Therefore, it is very important to furnish the requisite proof of maintenance funds in the regulated financial institution.
The funds must be in the form of cash savings and not overdraft facilities. Other accounts or financial instruments such as shares, bonds and pension funds, are not acceptable regardless of notice. Accordingly, an applicant may provide one of the following evidence for scoring 10 points for Tier 1 Entrepreneur Maintenance Funds:
- personal bank or building society statements covering 90 consecutive days. And the most recent statement must be dated no earlier than one calendar month before the date of the application
- building society passbook covering the previous 90-day period
- letter from the bank confirming their funds and that they have been in the bank for at least 90 days
- letter from a financial institution regulated by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) or, in the case of an overseas account, the home regulator (official regulatory body for the country in which the institution operates and the funds are located), confirming funds
- Any other types of bank statements printed on the bank’s letterhead as a proof of maintenance
The document must clearly show the applicant’s name, account number, date of the statement, name of the financial institution and its logo. And also transactions covering the 90 day period and that there are sufficient funds present in the account (the balance must always be at least £3,310 or £945, as appropriate).
An applicant need to provide the evidence of personal savings, which cover a period of 90 consecutive days. The bank letter date should not be more than one calendar month before submitting the application. Moreover, the documents must:
- be original and on the financial institution’s official letterhead
- have the organization’s official stamp
- be issued by an authorized official of the financial institution.
Perhaps, an applicant can furnish electronic bank statements of an account, if these contain all of the requisite details listed above. However, needs to provide a supporting letter from the bank, on a letterhead, confirming the statements provided are authentic. Moreover, the electronic bank statement has the official bank stamp on every page.
Certainly, an applicant needs to provide the proof of Tier 1 entrepreneur funds for at least 90 consecutive days. Therefore, these types of evidence are not acceptable:
- mini-statements from automatic teller machines
- statements which simply show the balance in the account on a particular day
Apparently, evidence such as ATM mini-statement and account balance certificate, do not demonstrate the applicant holds sufficient funds for the consecutive period of 90 days.
The Actual Cost of Living
Perhaps, the cost of living in the UK is much higher than the level of requisite maintenance. Therefore, at times, most prospective applicants really do not understand: why the level of maintenance funds for Tier 1 entrepreneur main and dependant applicants are lower than that for family settlement and Tier 4 student visa applicants. Apparently, the requisite amount for Tier 1 Entrepreneur Maintenance Funds is an estimate to cover the cost of living for the first month in the UK. Perhaps, with the assumption that an applicant will be able to generate reasonable income afterwards to support his/her living cost. And also for the living cost of the dependant family members i.e. spouse/civil partner and children under 18 years of age.
Certainly, the requisite maintenance funds is an arbitrary figure as the cost of living varies from person to person and family to family. Therefore, it is expedient for an applicant to estimate the actual cost of living not only for the first but till the time an applicant thinks that business in the UK will not be able to generate income. Consequently, if an applicant does not expect to get any income from business in the UK after the first month, then an applicant must ensure to have ample funds support himself/herself and any dependant family members.
English Language - 10 Points
As per Appendix B of the Immigration Rules, the Tier 1 entrepreneur English Language requirements are CEFR B1 or above. However, dependants do not need to fulfil any of English Language requirement. Moreover, an applicant can meet the Tier 1 entrepreneur visa English language requirements if he/she:
- has passed an approved English language test aka secure English language test (SELT)
- is a national of a majority English speaking country
- has a degree taught in English
- had met requirements in a previous grant of leave
Here it is important to mention a majority of applicants opts for English Language Test by predominantly undertaking IELTS for UKVI (General Training- GT). Moreover, an applicant needs to score B-1 or above in all the four modules of IELTS i.e. reading, writing, listening and speaking.
A NATIONAL OF A MAJORITY ENGLISH SPEAKING COUNTRY
In terms of paragraph 6(i) of Appendix B, a national of a majority English speaking country means a national of Antigua and Barbuda, Australia, The Bahamas, Barbados, Belize, Canada, Dominica, Grenada, Guyana, Jamaica, New Zealand, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Trinidad and Tobago, and the USA. However, for scoring 10 points for the English language, the applicant needs to provide a valid Passport or Travel Documents issued by any of the aforementioned countries.
A DEGREE TAUGHT IN THE ENGLISH LANGUAGE
If an applicant has obtained a Bachelor’s Degree or above either from the UK or from English-speaking countries mentioned at Paragraph 7(i)(3) of Appendix B then the applicant can meet the English Language requirements by submitting the degree. However, if the Bachelor’s or above qualifications of the applicant is from Pakistan, India, Bangladesh etc. then the applicant can contact UKNARIC for issuing the requisite certificate for meeting the requirements for scoring 10 points for the English Language.
Tier 1 Genuine Entrepreneur Test and Business Plan
GENUINE ENTREPRENEUR TEST FOR INITIAL APPLICATIONS
In terms of paragraph 245DB(f) of Immigration Rules, 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 risky and, many genuine entrepreneurs fail. However, the low evidence of tax activity suggests 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, 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 the 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.
TIER 1 ENTREPRENEUR BUSINESS PLAN REQUIREMENTS
In terms of paragraph 245DB(g), for a Tier 1 Entrepreneur initial application an applicant needs to provide a business plan. Perhaps, the business plan sets out the proposed business activities in the UK. And also explain how the Tier entrepreneur migrant expects to make their business a success. Moreover, the decision-maker also takes in to account the viability and credibility of the business plan and market research
TIER 1 ENTREPRENEUR BUSINESS PLAN FOR THE INITIAL APPLICATION
Tier 1 Entrepreneur applicants making an initial application needs to provide a business plan to the Home Office. Accordingly, the business plan sets out the proposed business activities in the UK. And how the applicant expects to make the business a success. Moreover, the decision-maker also take into account the viability and credibility of the business plan and market research as part of the genuine entrepreneur test.
Additional information can be requested to support the assessment of the application. If fact, the decision-maker can refuse the Tier 1 entrepreneur visa application if the applicant does not provide the specified evidence. Moreover, an applicant needs to furnish any requested documents within 28 calendar days of the date of the request.
Additionally, applicants also need to comply with any request made by the decision-maker attend an interview unless an applicant provides a reasonable explanation as to why he/she cannot comply.
REASONS FOR REFUSAL AFTER INTERVIEW
Perhaps, 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.
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.
THE RISE IN THE REFUSAL RATE AFTER JAN 2013
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% in 2012 to 44% in 2014.
THE IMPACT OF GENUINE ENTREPRENEUR TEST 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.
Tier 1 Entrepreneur Team
Indeed, two migrants may make a joint application under Tier 1 Entrepreneur route. And also may claim points for the same investment and business activity with another person. Accordingly, in terms of Paragraph 52 of Appendix A Attributes for Tier 1 Entrepreneur, no more than two partners may claim points for the same investment funds, job creation and business activity in the subsequent extension and settlement applications.
HOW TO FORM A GENUINE TIER 1 ENTREPRENEUR TEAM?
The immigration rules are quite silent about the persons who can form a team for doing business under the Tier 1 entrepreneur route. However, it is expedient to form only a genuine Tier 1 entrepreneur team and not to create a team for reducing the financial burden per applicant. A Tier 1 entrepreneur team consists of one entrepreneur and one inactive member to dilute the investment requirement may represent an abuse of the route.
Perhaps, it is quite rare to form a business partnership with a total stranger. Therefore, a Tier 1 entrepreneur team of two total strangers without any common background may not hold sway. Accordingly, prima facie it may look like only an arrangement for applying as Tier 1 entrepreneur team without a genuine intent of doing business. Certainly, such an arrangement may not be able to pass the genuine entrepreneur test.
Perhaps, a team consisting of a close family member such a father forming an entrepreneurial team with above 18 years old daughter is quite practical. Moreover, a team consisting of existing business partners is also maintainable.
BOTH PARTNERS TO HAVE EQUAL CONTROL
In terms of Paragraph 52 of Appendix A Attributes for Tier 1 Entrepreneur, no more than two partners may claim points for the same investment funds. And also for the same job creation and business activity in the subsequent extension and settlement applications. Moreover, Tier 1 entrepreneur team/partner also need to meet the following requirements:
- (a) The applicants have an equal level of control over the funds. And also, where relevant, equal status as owners, directors and/or members of the business or businesses in question
- (b) The applicants are both shown by name, passport number and (where relevant) Points-Based System reference number in each other’s applications and in the specified evidence required in the relevant table
- (c) Neither applicant has previously been granted leave as a Tier 1 (Entrepreneur) Migrant on the basis of investment and/or business activity linked in this way with any applicant other than each other if the same funds were relied on in a previous application.
POINTS ARE AWARDED IN TERMS OF PARAGRAPH 52 APPENDIX A
Please note no points are awarded for money that is made available to any individual other than the applicant, except under the terms of paragraph 52 above. And also where the money is held in a joint account with the applicant’s spouse or civil partner. However, the spouse or partner must not be applying with another Tier 1 (Entrepreneur) Migrant. Please note: a civil partner is a person who has been living together with the applicant in a relationship akin to a marriage or civil partnership for at least two years prior to the date of application.
AWARD OF POINTS TO APPLICANTS UNDER TIER 1 ENTREPRENEUR TEAM
No points are awarded for investment, job creation and business activity shared with another Tier 1 (Entrepreneur) applicant, except under the terms of paragraph 52.
If the applicant is not the sole member or director in the business, they must provide confirmation of the names of the other members or directors and whether any of the other members or directors are also Tier 1 (Entrepreneur) Migrants.
For other members or directors, an applicant is required to provide the dates the other persons became members or directors and whether they are applying under the provisions in paragraph 52 of Appendix A and if they have made (or are making at the same time) an application in which they claimed points for creating jobs, the names of the jobholders in question.
In terms of paragraph 245DB(o) of Immigration Rules, the minimum age of the Tier 1 Entrepreneur (Main Applicant) must be at least 16 years. Moreover, for under the age of 18 main applicants, it is required that their legal guardian/sole parent must undertake the legal responsibility to support their application and to give their consent to the applicant’s travel arrangements/reception and care to the United Kingdom (UK).
Criminal Record Certificate
In terms of paragraph 245DB(r) of Immigration Rules, from September 1, 2015, Tier 1 (Entrepreneur) entry clearance main applicants and their adult dependents (above 18 such as a spouse) are required to provide an overseas criminal record certificate for any/all country (countries), where they have resided in continuously for 12 months (or more) during the preceding ten (10) years before the application.
An immigration officer can call the Tier 1 entrepreneur applicant for an interview. Therefore, it is mandatory to attend the interview. However, if an applicant is not able to attend the interview then in terms of paragraph 245DB(n) needs to provide a reasonable explanation.
Leave is usually given for:
- three (3) yrs and four (4) months for entry clearance
- three (3) yrs for switching (leave to remain)
- two (2) years for extensions (leave to remain)
Paragraph 245DC of the Immigration Rules explains that if the initial application for Tier 1 Entrepreneur is successful then a visa for a duration of three (3) years and four (4) months is issued to the applicant. Here it is important to add that in term with Paragraph 245D an applicant has been granted Tier 1 Entrepreneur Visa for establishing, joining or taking over one or more than one business in the UK, therefore, the applicant is not entitled to Public Funds and the employment is limited to own business. Moreover, the applicant is required to register with the police in accordance with Paragraph 326 of the Immigration Rules. A Tier 1 Entrepreneur Migrant can undertake studies in the UK in terms of Part 15 of the Immigration Rules.
Conditions of Stay
Leave to remain under Tier 1 Entrepreneur Migrant route is subject to the following stipulations:
- No recourse to public funds – Migrants under the Tier 1 (Entrepreneur) category are not permitted to access public funds and they must register as self-employed or as the director of a new or existing business.
- Registration with the police – subject to the requirement of paragraph 326 of the Immigration Rules.
- Employment limit to the own business – i.e. applicant cannot take any employment other than working for the business (es) he/she has established, taken over or joined. Moreover, working for his/her own business (es) does not include any other work the applicant does pursuant to – in line with – a contract of service/apprenticeship with any other business (whether express or implied, written or oral).
- Sportsperson – no employment as a professional sportsperson (including as a sports coach). This condition applies to applications made after April 6, 2011, but the biometric residence permit (BRP) only contained this condition from December 1, 2012. If the ECO comes across someone without the condition on their BRP, who is working as a sportsperson or coach, the ECO is required to contact the economic migration policy team of the Home Office for advice on the matter.
The Migrant(s) under the Immigration Rules can only work for the business or businesses that he/she has established, taken over or joined. Working for his/her own business (es) does not include any work the migrant does under a contract of service or apprenticeship for any other business (either express or implied, oral or written). The migrant is required to be:
- employed as the director of the business the migrant has invested in;
- working in a genuinely self-employed role for Extension and Indefinite Leave to Remain applications.
WHO IS CONSIDERED AS EMPLOYED BY ANOTHER BUSINESS?
Where a migrant enters into arrangements with another business in this capacity, this will usually be regarded as obligations for service. The migrant may not be considered to be working for his/her own business if the work he/she does is considered to be employment by another business. For instance, where the migrant’s work involves the business, in effect, hiring the migrant for the labour or to fill a position or an opening. This holds where the business hires the individual using a recruitment or employment company. Contracts entered into by the migrant with any other business in this capacity will usually be regarded as contracts of service. This is also applicable even if the applicant declares the work is undertaken on a self-employed basis. The evaluating immigration officer is required to consider the factors set out at Employment Status Index when he/she deems necessary that the migrant’s work amounts to:
- genuine self-employment: the migrant works for the business he/she has established, joined or taken over;
- employment by any other business.
If the evaluating immigration officer considers an applicant’s work to be employed by another business, he may take into account such to be working in breach of the migrant conditions of stay. Accordingly, this makes migrant liable for curtailment and/or removal order. Indeed, Tier 1 Entrepreneur Migrants are allowed to study in the UK. However, it should not prevent the migrant from meeting the extension criteria.
CAN A TIER 1 ENTREPRENEUR VISA HOLDER STUDY IN THE UK?
The Tier 1 Entrepreneur migrants can study in the UK. However, need to obtain an Academic Technology Approval Scheme (ATAS) certificate for the course/research he/she intends to undertake and present it to the respective education institution before he/she starts study if:
- they are over age 18 (or will be over 18 by the time their leave expires);
- their course is EITHER a doctorate/master’s degree by research in one of the disciplines enumerated in Paragraph 1 (Appendix 6 of Immigration Rules) OR a taught master’s degree/other post-graduate qualification in one of the disciplines highlighted in Paragraph 2 (Appendix 6) of the Immigration Rules. A period of study/research more than SIX (6) months in one of the disciplines noted in Paragraph(s) 1 OR 2 (Appendix 6) of Immigration Rules at an institute of higher education, where this forms component of overseas post-graduate eligibility.
If their course (or research) completion date is postponed or delayed for more than three (3) months, or there are any alterations to the course contents (or the research proposal), they must apply for a new ATAS certificate within twenty-eight (28) calendar days, and must present a printout of the fresh certificate to their institution promptly.
Visa Endorsement and Additional Information
Entry clearance requirement is mandatory, and biometric information is required for applications made in the UK. The Entry Clearance endorsement (CAT D) is Tier 1 (Entrepreneur) Migrant, and the Entry clearance condition code is Code 1 (+bus) (+sport). Code of leave to remain granted is Code 4D. Dependants are allowed such as spouse and children under 18 years of age. The time spent in as Tier 1 Entrepreneur Migrant counts towards indefinite leave to remain (ILR). For ILR Applications knowledge of language and life is required. The CID case type is Tier 1 HS Entrepreneur and Paragraphs 245D – 245DF, and appendices A, B and C are the relevant Immigration Rules governing the Tier 1 Entrepreneur Migration to the UK.
Statistics (EC) 2008-18
During 2008-18, a total of 30,213 Tier 1 entrepreneur entry clearance applications decided. Accordingly, a total of 13,635 and 16,578 decisions relates to the Tier 1 entrepreneur Main Applicants and their dependants, respectively. Apparently, during the period 20,080 Tier 1 entrepreneur visas issued to the Main Applicants (7,573) and their dependants (12,507). Accordingly, the average Tier 1 entrepreneur visa success rate for entry clearance applications have been 66.46%. However, the success rate for dependants applicants (75.44%) is higher than that for the main applicants (55.54%).
Moreover, during 2008-18, a total of 9,195 Tier 1 entrepreneur entry clearance applications have been refused for Main Applicants (6,054) and dependants (3,953). Accordingly, the average Tier 1 entrepreneur visa refusal rate for entry clearance applications have been 32.82%. The refusal rate for dependants applicants (23.84%) is certainly quite lower than that for the main applicants (43.73%).
Tier 1 Entrepreneur Visa Entry Clearance Statistics 2008-18
From 2008 to June 2018. a total of 13,686 Main Applicants applied for Tier 1 Entrepreneur entry clearance visa. And 13,635 applications resolved for entry clearance as Tier 1 entrepreneurs. And also 98 and 2 applications withdrawn and lapsed, respectively. Apparently, during the ten year period, 7,573 main applicants get entry clearance under the route. However, 6,054 applications refused. Accordingly, the average Tier 1 entrepreneur success and refusal rate for entry clearance is 55.54% and 43.75%, respectively.
The immigration statistics indicate a variation of 30% in the annual success rates during the ten year period. Apparently, Tier 1 entrepreneur success rate for main applicants during 2012 was 78.06%. However, it came down quite drastically in 2013 to touch a level of 49.18%. Perhaps, mainly due to the drastic change in the policy announced on Jan 30, 2013. Apparently, the success rate increased in 2014 to 55.40%. However, afterwards in 2015 again came down to reach its lowest ebb of 48.01%.
Since 2016 the Tier 1 entrepreneur visa entry clearance success rate for the main applicants is showing an upward trend. Accordingly, the Tier 1 entrepreneur visa success rate has increased from 48.01% to 50.28% during 2016. And the success rate further increased to 54.14% in 2017. Moreover, during 2018 the Tier entrepreneur visa success rate increased to 56.95%, which is nearly 1.41% higher than the 10 year average of 55.54%. Therefore, a high success rate, which during Q4 2018 has further increased to 61%, is promising for genuine entrepreneurs.
Tier 1 Entrepreneur Visa Statistics – Main Applicants
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Tier 1 Entrepreneur Visa Extension Requirements
Applicants under the Tier 1 (Entrepreneur) category are granted an initial period of leave of no more than three years and four months for out-of-country applicants, and three years for in-country applicants. However, at the end of this period of leave, a Tier 1 entrepreneur migrant can get a further two years if the migrant is able to prove that he/she:
- has invested, or had invested on their behalf, not less than £200,000 (or £50,000 if, in their last grant of leave, they were awarded points for funds of £50,000) in cash directly into one or more businesses in the UK
- has registered as a director or as self-employed for not more than six months after the date they were given permission to stay in the UK under a Tier 1 (Entrepreneur) visa
- can prove they have been self-employed or working as a director of a business three months before they apply for an extension
- has created at least two full-time equivalent jobs that have existed for at least 12 months
- has met the period and conditions of leave to remain in the UK as a Tier 1 Entrepreneur migrant
Total Points – 95
For leave to remain as a Tier 1 entrepreneur migrant, an applicant needs to score 75 points for attributes. And also 10 Points each for English Language and Maintenance Funds.
Invested Funds (20 Points)
The applicant has invested or had invested not less than £200,000 (or £50,000 if, in his/her last grant of leave, she/he was awarded points for funds of £50,000) in cash directly to either one or more businesses in the United Kingdom.
Business Registration (20 Points)
The applicant has registered with:
- HM Revenue & Customs (HMRC) as self-employed; OR
- Companies House as a director of either a new or an existing business – NO POINTS ARE GRANTED to directors/applicants, who are on the List of Disqualified Directors of Companies House;
If applicant’s last grant of entry clearance, leave to enter or leave to remain was as a Tier 1 (Entrepreneur) Migrant, the applicant is required to meet the above condition within six (6) months of entry to the UK. This should be on the basis that the applicant was granted entry clearance as a Tier 1 (Entrepreneur) Migrant and evidence is available to establish the date of arrival to the United Kingdom or date of the grant of leave to remain.
Business Registration within 3 Months (15 Points)
On a date not earlier than three (3) months before the date of application, the applicant was registered with either:
- HM’s Revenue & Customs as self-employed OR
- Companies House as director of new/existing business – POINTS are NOT GRANTED to applicants for directorship in companies, which are included on the list of disqualified directors of the Companies House
Business Establishment (20 Points)
The applicant has:
- established new business that has created the equivalent of at least TWO (2) new full-time jobs for workers settled in the United Kingdom (UK);
- joined or taken over an existing business and his/her services or investment have resulted in the net increase in employment provided by the business for persons settled in the United Kingdom by creating an equivalent of at least TWO (2) fresh full-time employment;
If applicant’s last grant of entry clearance or leave to enter or remain was as a Tier 1 (Entrepreneur) Migrant, the jobs must have existed for at least twelve (12) months of the period for which most recent leave was granted.
English Language (10 Points)
The applicant is required to prove the English Language Skills – (CEFR B1 or above).
Maintenance Funds (10 Points)
There are sufficient funds to support the migrant (£945) and any family member (£1890 per dependant).
For extensions applications during the initial period of three (3) and four (4) months, a Tier 1 (Entrepreneur) migrant needs to create a full-time job (at least 30 hours of work a week) for at least 12 months. Moreover, two or more part-time jobs that add up to 30 hours a week can count as one full-time job. Tier 1 Entrepreneur migrants who invest in the same business and are not part of an entrepreneurial team preferably may not use the same evidence of job creation. Applicants who have had entry clearance, leave to enter or leave to remain as a Tier 1 (Entrepreneur) Migrant, business person or an innovator, in the preceding twelve months immediately before the application date, must meet the extension criteria and as they cannot utilise the initial criteria for applying.
For applications made on this form as a Tier 1 (Entrepreneur) migrant, there is a fee of £1,277 for standard postal applications. A £55 discount of CESC (Council of Europe Social Charter) discount is applicable for the main applicant.
Statistics (Extensions) 2008-18
Moreover, during 2008-18, a total of 22,831 Tier 1 entrepreneur extensions and leave to remain applications have been refused for Main Applicants (15,974) and dependants (6,857). Accordingly, the average Tier 1 entrepreneur extensions and leave to remain refusal rate for entry clearance applications have been 45.13%. The refusal rate for dependants applicants (39.41%) is certainly quite lower than that for the main applicants (48.13%).
Tier 1 Entrepreneur Visa Extension Statistics 2008-18
From 2008 to 2018, 33,189 Main Applicants applied for Tier 1 Entrepreneur extensions and leave to remain applications. Accordingly, during the ten year period, 17,215 main applicants get an extension under the Tier 1 entrepreneur route. However, 15,974 leave to remain and extension applications refused. Accordingly, the average Tier 1 entrepreneur extension and success and refusal rate is 51.87% and 48.13%, respectively.
There has been a variation of 46% in the annual success rates during the last ten year period as the success rate during 2011 was 82.57% and it was only 35.92% in 2013 due to policy changes announced in Jan 2013. The success rate increased in 2014 to 50.56% and afterwards further improved to 67.29% in 2017. However, the Tier 1 entrepreneur extension success rate in 2018, has slightly decreased to 65.48%. Nevertheless, it is still 13.61% higher than the 10 years average success rate.
Tier 1 Entrepreneur Visa Extension Statistics – Main Applicants
Tier 1 Entrepreneur Visa ILR Requirements
For making an indefinite leave to remain (settlement) application under the Tier 1 Entrepreneur visa category of the PBS, the following criteria need to be fulfilled:
- the applicant meets the requirements of paragraph 245D or 245DF of the Immigration Rules
- an applicant does not attract the general grounds for refusal in paragraphs 320 to 324 of the Immigration Rules
- the applicant is not an illegal entrant
- the applicant scores seventy-five (75) points for the attributes(see below)
- an applicant has enough knowledge of the English language and enough knowledge about life in the UK, concerning Appendix Koll of the Immigration Rules (UK), unless the applicant is either under the age of eighteen (18) or age sixty-five (65) or over at the time of making the application;
- the applicant has not breached any of the immigration rules/laws, except:
- for any period of overstaying allowed under the Immigration Rules;
- where the application was submitted before July 9, 2012
Total Points – 75
For applying Tier 1 entrepreneur ILR an applicant needs to score 75 points i.e. 20 points each for investment funds, business activity and job creation. And also 15 points for continuous 5 years in the UK or 3 years under the Tier 1 Entrepreneur Accelerated Settlement. Moreover, the Tier 1 entrepreneur ILR applicants need to pass the genuine entrepreneur test. Accordingly, an applicant needs to satisfy during the assessment process that he/she has:
- established, taken over or become a director of one or more genuine businesses in the UK, and have genuinely operated that business
- genuinely invested the required level of funds into one or more genuine businesses in the UK to be spent for the purpose of that business or businesses
- the genuine intentions to continue operating one or more business in the UK
Tier 1 Entrepreneur ILR Investment Funds Requirements - 20 Points
The applicant has invested or has caused investment to be made by one or more third parties, totalling at least £200,000 (or £50,000 if they were awarded points for £50,000 funding or investment in their last grant of leave) in cash directly into one or more UK businesses. Indeed, an applicant does not need to provide evidence of investment if his/her last leave was as a Tier 1 Entrepreneur Migrant.
Business Activity (20 Points)
For Tier 1 Entrepreneur ILR application, an applicant needs to engage in business activity at the time of the application. Perhaps, for a Tier 1 entrepreneur ILR application, engaging in a business means that the applicant is registered with either HM Revenue & Customs as Self-Employed or Companies House as a director of a UK company or member of a UK partnership within the three months before the date of application. Accordingly, an applicant needs to provide the appropriate evidence to demonstrate registration with HM Revenue & Customs or Companies House.
Tier 1 Entrepreneur ILR Job Creation Requirements - 20 Points
For claiming 20 points for job creations, a Tier 1 Entrepreneur ILR applicant needs to demonstrate that he/she has:
- established a new business or businesses that have created the equivalent of at least 2 new full-time jobs for settled workers, or
- taken over or invested in an existing business and the investment has resulted in at least 2 new full-time jobs for settled workers.
The jobs must have existed for at least 12 months during the applicant’s most recent grant of leave or, where that leave was granted less than 12 months ago, for at least the 12 months immediately before the date of application.
An applicant is required to provide the following specified documents to demonstrate job creation:
- Documentation to prove the employee was a settled worker. Such as the biometric page of a British passport for employee’s photograph and personal details.
- For directors of a company – a printout from Companies House of the company’s filing history page and of a Current Appointment Report to show that the applicant is/was a director of each business for the period.
- For members of a limited liability partnership – a printout from Companies House of the partnership’s filing history page and of a Current Appointment Report to show that the applicant was a member of each partnership for the period.
- Employee Payment Records, original HM Revenue & Customs P45 or P46.
- Real Time-Full Payment Submissions.
- Wage or payslips to cover the total period of employment created for each worker
- Additional Specified Documents – A duplicate HMRC Full Payment Submission for the year before the jobs were created and the year that the jobs were created and signed by the applicant or if the business started employing staff for which points are being claimed before they were reporting under Real-Time, a form P35.
- If an applicant has joined or taken over an existing business then the applicant is required to supply an accountants letter to confirm the job creation.
HOURLY WAGE RATE AND PART-TIME JOBS
An applicant is required to give the hourly rate for the employee(s). If the hourly rate changed for an employee in the same job, then an applicant needs to enter this information as a fresh period of employment. If an applicant wishes to combine part-time jobs to make the equivalent of one full-time post, the part-time jobs must have existed for at least 12 months.
DETAILS OF THE EMPLOYEES
Details of all employees who filled these jobs for the required 12 month period. The jobs must exist for at least 12 months. Within the same job, another worker can replace a worker who is employed for part of a year and then leaves the job. However, employment as a whole adds up to 12 months.
Moreover, hours of workers in 2 part-time jobs can be combined to add up to 30 hours a week or more. Accordingly, 2 part-time jobs form the equivalent of one full-time job, as long as the 2 part-time jobs exist for 12 months.
5 Years Continuous Period in the UK (15 Points)
An applicant can apply for settlement (aka ILR) under Tier 1 (Entrepreneur) once he/she reached 5 years continuous leave in the UK under the route. However, if an applicant can meet additional criteria then he/she may be eligible to apply for accelerated ILR after a continuous period of 3 years. The applicant cannot combine Tier 1 (Entrepreneur) leave with leave in any other category to meet the continuous leave requirement.
The Qualifying Period
The qualifying period can include time from the date of approval of the initial application and one can apply for settlement up to 28 days before an applicant will reach the end of the qualifying period. If an applicant applies earlier than that then the application could be refused.
The qualifying period will be the 3 or 5 years immediately before the date an applicant applies for settlement or the 3 or 5 years immediately before the date the settlement application is decided, depending on which is most beneficial for the applicant.
If an applicant has spent more than the required time in the UK then only the most recent 3 or 5 years will be considered.
One cannot have had more than 180 days’ absence from the UK during any consecutive 12 months of the qualifying period.
LIST OF ABSENCES AND REASONS
An applicant needs to list details of the absences from the UK, including the reasons for those absences, on the form but an applicant is not required to provide any specified evidence to support his/her claim.
HOW 180 DAYS PER YEAR ARE COUNTED?
Whatever the reason for absences from the UK they will still be counted towards the maximum 180 days. This includes any absences for work reasons or serious and compelling reasons.
The only exception is where an applicant has been absent from the UK assisting with a national or international environmental or humanitarian crisis overseas, such as the Ebola crisis, which began in West Africa in 2014 and an applicant can provide evidence that this was the cause of the absence.
An applicant can include the time between the entry clearance being granted and applicant’s entering the United Kingdom as part of the continuous period. Absences between the date entry clearance being granted for entering the UK are treated as an absence from the UK and will form part of the 180 days allowed within a continuous 12 month period.
For example, if an applicant entered the UK 100 days after he/she obtained entry clearance and have a further 81 days absence during the remainder of the continuous 12 month period, then he/she will exceed the number of absences permitted from the UK. Consequently, the applicant would not qualify for settlement 5 years or 3 years (as appropriate) after the date the entry clearance was granted. The applicant would need to wait until a date where none of the qualifying periods included absences of more than 180 days in any consecutive 12 month period before he/she could qualify.
BREAK IN THE CONTINUOUS PERIOD
If an applicant has been outside of the UK for more than 180 days in any consecutive 12 month period, this will break the continuous period and the applicant will need to start the qualifying period for settlement again. If this happens the migrant may need to obtain a further grant of limited leave to remain to reach the continuous period in the UK.
SETTLEMENT APPLICATIONS FROM JAN 11, 2018
For settlement applications made from 11 January 2018, the absences from the UK will be considered on a rolling basis, rather than in separate consecutive 12-month periods. If the qualifying period includes leave granted before this date any absences during that leave will be considered under the previous rules – in separate 12-month periods, ending on the same date. For instance, if an applicant applies for settlement on 30 June 2020 then the continuous period may include the following grants of leave:
- One grant of leave from 1 July 2015 to 28 July 2018 – Any absences during this grant of leave will be considered in separate 12 month periods, ending on 30 June each year.
- One grant of leave from 29 July 2018 to 30 June 2020 – Any absences during this grant of leave will be considered on a rolling basis. The absences during the previous grant of leave will not be included.
CRITICISM OF 180 DAYS RULE FOR TIER 1 ENTREPRENEUR ILR
Many immigration experts opined that the 180 days rule is unreasonable in the global business market. As indicated above, the 180 days rule states that the entrepreneur cannot spend more than 180 days in any one-year period outside of the UK in order to qualify for settlement.
The recurrent criticism of this rule was that it was simply too harsh. Both in terms of how the twelve-month period is applied, and the restriction itself. Since developing international business ties is crucial to develop a successful business and, as such, there should not be such strict limits on the entrepreneurs’ ability to operate internationally.
Tier 1 Entrepreneur ILR: 3-Year Accelerated Settlement
A migrant can also apply for Tier 1 Entrepreneur Accelerated Settlement i.e. 3 Years Settlement if he/she can demonstrate that he/she has:
- started a business that has a turnover of at least £5 million
- joined or taken over an existing business that has seen an increase in turnover of over £5 million
- has created 10 jobs which have existed for at least 12 months
The PBS dependant family members cannot benefit from the accelerated route. They can extend their leave as the dependants of a PBS migrant who has ILR. However, subsequently, may apply for an indefinite leave once they reach five years in the category.
Accelerated Settlement £5 M Business Activity
Where an applicant is applying for settlement and relying on business activity from a new business then needs to provide audited accounts (if the business is legally required to produce audited accounts) or unaudited accounts which show the gross income resulting from the business’ activities and that this gross income reached at least £5 million. Where an applicant is applying for settlement and relying on business activity from an existing business which he/she has taken over or invested in then needs to provide:
(i) Audited accounts (if the business is legally required to produce audited accounts) or unaudited accounts, clearly showing:
- the name of the accountant.
- the date the accounts were produced.
- gross income from the business activity for the 3 year period immediately preceding the date on which the migrant became involved with the business as a Tier 1 (Entrepreneur) migrant.
- a net increase of at least £5 million in gross income from business activity during the period migrant remained involved with the business that he/she is relying on to score points for settlement as a Tier 1 (Entrepreneur) migrant.
(ii) An original signed and date accountant’s letter, confirming:
- the name and contact details of the business,
- an explanation of migrant’s status in the business,
- net increase in business activity,
- the registration or permission of the accountant to operate in the UK, and
- that the accountant will verify the content of the letter to the Home Office on request
Knowledge of Life and Language – Settlement
When a migrant applies for settlement then he/she is required to demonstrate knowledge of life and language in the UK before the settlement is granted (unless the migrant falls under an exemption). The migrant can show this by passing both Life in the UK Test and holding an English speaking and listening qualification at level B1 or above (please note: both Academic and General training are acceptable).
Cover Letter for Tier 1 Entrepreneur ILR Application
If an applicant’s situation is unusual or particularly complex, then the applicant may include a covering letter with the application. The covering letter should explain how the documents provided with the application demonstrates that the applicant has met the requirements for indefinite leave to remain. The application can be processed without a covering letter, but it may speed up our consideration.
Home Office Application Fees
The settlement form is called ‘SET (O). This is used for applying indefinite leave to remain as a Main and Dependant Spouse/Child Tier 1 (Entrepreneur) Migrant. The Home Office ILR fee is £2,389 per applicant for standard applications made by post or courier.
Tier 1 Entrepreneur ILR Processing Time
The service standard of UKVI is to process ILR application made inside the UK within 6 months. The actual processing time may vary from 8 – 32 weeks due to workload, the complexity of the application and documents verification.
Tier 1 Entrepreneur ILR Statistics 2008-17
During 2008-17, a total of 819 applicants get settlement grants on the basis of 5 years aggregate of pre-PBS categories and Tier 1 High-Value Migrant Entrepreneurs. Certainly, applying for settlement under the Tier 1 entrepreneur route requires spending at least 3-5 years in the UK. Therefore, in the initial years, only a few applicants get settlement grants. However, from 2012 onwards the number of settlement grants have steadily increased. Apparently, the highest number of 414 settlement grants made to Tier 1 entrepreneur migrants during 2017. Perhaps, the most settlement grants have been made to Pakistani, Chinese and Indian nationals under the Tier 1 entrepreneur route.
Tier 1 Entrepreneur Visa Refusal Reasons
Perhaps, most of the Tier 1 entrepreneur refusal grounds are not due to an applicant’s inability to fulfil the requirements, but due to the inability of the applicants to clearly establish genuine intentions of doing business in the UK. Accordingly, a holistic viewpoint suggests that the Tier 1 entrepreneur refusal grounds mainly relates to:
- General Grounds for Refusal
- Source of Funding
- Doing Business is not the Main Purpose
- Generic Business Plan
- Insufficient Evidence of Employment Creation
- Shell Companies
- Abuse of the Route
- Poor quality of applications
- Leakage from the System
- Subjectivity of the Genuine Entrepreneur Test
- Convoluted and Unclear Rules
- Insufficient Training of the Immigration Officers
- Unclear Policy Objectives
- Policy Bias!
- Lack of Differentiation between start-ups and existing businesses
What to do after refusal?
Indeed, there is no right of appeal against the Tier 1 Entrepreneur Visa Refusal. However, an applicant can file an administrative review after the refusal letter. Nevertheless, if administrative review is unsuccessful then can challenge the Tier 1 Entrepreneur refusal by way of a Judicial Review.
1. Refusal on General Grounds
In terms with paragraph 245DB(a) of Immigration Rules a Tier 1 Entrepreneur Application must not fall for refusal under the general grounds. However, if an application falls for refusal under general grounds then in terms with sub-paragraph 245DB(m) an Entry Clearance Officer (ECO) has the discretion not to carry out assessment required in subparagraph 245DB(f) or 245DB(i), and can reserve the right to carry out further assessment subsequently in any reconsideration of the decision. Furthermore, a leave to remain applicant must not be an illegal entrant. The migrant must not be in the UK in breach of immigration laws except that, where paragraph 39E of these Rules apply, any current period of overstaying will be disregarded. The migrant must, unless he provides a reasonable explanation, comply with any request made by the Secretary of State to attend for interview.
2. The Source of Funds is Not Credible
This is a common problem with entry clearance and extension applications. In a number of instances, especially those relating to third-party funding the applicant is not able to provide a satisfactory source of funding and upon checks by the immigration officer, it was found that the money is not available for disposable in the UK.
3. The Main Purpose is Not Doing Business
If an applicant is not able to satisfy the ECO during the application assessment process, then the ECO is not clear about the purpose and might question the intentions of the applicant i.e. the applicant is only using the route to settle in the UK, without actually doing business in the UK. Accordingly, from the evidence available with the application and where applicable during the interview process, the ECO can gather together refusal reasons to justify his opinion about the intentions of an applicant. However, for building a line of argument the ECO usually questions the elements of the genuine entrepreneur test, especially the business plan submitted with the application.
4. Generic Business Plan
Generic Business Plan has been the major source of Tier 1 Entrepreneur refusals as most of the applicants have not given importance to the accuracy of the elements of the business plan. Some business plans which are fundamentally wrong in their approach i.e. instead of justifying investment in the UK, the business plan focuses on imports. In the case of Entrepreneurial Teams, both the applicants during the interview give a different version of the business plan.
5. Insufficient Evidence of Employment Creation
In most of the cases, Home Office refuses extension due to insufficient evidence of employment, maintenance or claimed investment.
6. Shell companies
Extensions are also refused if the Tier 1 (Entrepreneur) migrants have set up a shell company for meeting the minimum qualifying investment, without any underlying economic activity. In most of the cases, prima facie the shell business creates two jobs. However, the employees did not undertake any meaningful commercial or business activity. Apparently, the applicants created paid jobs to achieve the objective of meeting the extension and settlement criteria.
7. Abuse of the Route
The Tier 1 (Entrepreneur) route is for those who wish to establish a genuine business, which intends to generate jobs in the UK. However, during 2008-2012 a significant number of those applying in-country for leave in the route were those that had come to the UK for the purpose of the study and made speculative applications simply to extend their stay in the UK. Accordingly, only a few applicants engaged in any meaningful genuine entrepreneurial activity. However, a significant proportion of entrepreneurs took employment in breach of their conditions. Perhaps, in low-skill occupations.
The Immigration Statistics indicates that during the year ending June 2015. 5,026 in-country applications from main applicants were considered, out of which 44 per cent were granted. The number of visas being granted in-country under this route increased steadily between 2008 and 2012, followed by a sudden surge in 2013, which is closely linked to the closure of Tier 1 (Post-Study Work) route. Accordingly, in 2013, the number of Tier 1 entrepreneur refusals increased substantially. Perhaps, due to the introduction of the genuine entrepreneur test. The refusal rate peaked at 67 percent in the year ending September 2013 before falling back in 2014.
Example of the Abuse
For instance, an applicant initially had leave to remain on Tier 1 (Post-Study Work) visa which was due to expire in December 2013. In October 2013, the applicant set up a business. As proof of business activity, the applicant provided a contract for marketing and advertising services. However, during the assessment process, it was concluded that there was no evidence to suggest that the client had established a legitimate company, or that the two directors of this company. Furthermore, a business owner needs to inform the HMRC if a company is active within three months of starting a business. However, the applicant had not registered with HMRC. Therefore, the applicant did not comply with the HMRC regulation. And also the applicant did not do any meaningful effort to make the company active.
At an interview, the applicant initially stated that they were going to run a marketing company, but later stated they were looking to run an HR consultancy business and/or recruitment agency. The candidate provided no details as to how the £50,000 would be invested, given that they were running the business from home using a computer, internet connection and printer. However, the immigration officer refused the Tier (Entrepreneur) visa as he did not deem the applicant genuine.
Tightening of the Route
Since 2013, the Home Office has introduced a number of measures to tighten the route against suspected abuse. In January 2013, the genuine entrepreneur test was introduced, which included the option for caseworkers to request that applicants attend an interview. Further changes saw migrants unable to switch from Tier 4 unless they had £50,000 funding from a specified source. In July 2014, the Home Office restricted the provision to switch into the category from study categories. And also from Tier 1 Post-Study Work category. Consequently, the number of extension applications reduced from 5,936 in 2013 to only 1,273 in 2015 and success rate nearly doubled in 2017 to reach a level of 67.29%, which in 2013 reached its lowest ebb of 35.92% due to poor quality of extension applications.
8. Poor quality of applications
Applicants switching to the entrepreneurial route from another immigration category, rather than those who applied overseas to enter as a Tier (Entrepreneur), account for the higher proportion of poor quality and potentially abusive applications at the extension stage.
9. Leakage from the System
Applicants granted initial leave to enter or remain under the entrepreneur route required to apply for an extension of three years. However, during 2008-2012 relatively fewer apply for an extension. The leakage indirectly contributed towards a higher refusal rate of the entry clearance applications as the assessment became more subjective due to the rigorous use of genuine entrepreneur test and finding faults in the business plan and also raising questions about the credibility of the applicant during the interview process.
10. The Subjectivity of Genuine Entrepreneur Test
Indeed, the Genuine Entrepreneur Test is quite subjective. Therefore, during the assessment process, a number of questions regarding the genuineness of any application can arise. For instance, questions about the source of money, education, and skills set of the applicant to run a business, previous experience of the UK, business and marketing research. Accordingly, the ECO through the paper genuineness test or oral genuineness test can fail any application as ample arguments can be built for either passing or failing a genuineness test. Therefore, it is mostly a grey area. And greatly depends on the documentation and the performance of an applicant during an interview. Nevertheless, applicants with a good track record of working as a businessperson, with adequate education and immigration history have a fair chance to pass the Genuine Entrepreneur Test.
The genuineness test as currently practised brings a level of uncertainty to the route. And it not helpful for the applicants, immigration advisers or the businesses involved in the process. Certainly, the genuine entrepreneur test is a subjective mechanism. And differentiate entrepreneurs who wish to set up a valid business are able to meet the entry criteria. The genuine entrepreneur test introduced in Jan 2013. And the purpose was to reduce the perceived abuse of the route. However, since then the Tier (Entrepreneur) route remains highly susceptible to being abused. The process for assessing the suitability of Tier (Entrepreneur) application is quite flawed. Therefore often fails to differentiate between genuine and non-genuine applicants.
11. Convoluted and Unclear Rules
Indeed, the complexity of the genuineness test prevents the Tier (Entrepreneur) route from being truly effective. Apparently, the genuineness test has convoluted and unclear rules. And certainly, dissuade potential entrepreneurs. Moreover, there is a distinct lack of clarity in the requirements associated with the genuineness test. Consequently, there is a need for a more structured, transparent guidance to be available to applicants.
12. Insufficient Training of the Immigration Officers
In fact, insufficiently trained officers may not make the right decisions about applicants and business plans, especially when the criteria are too subjective. The Government cannot determine ex-ante which combinations of applicant and business plan might become commercial successes. Perhaps, it is not advisable to aim to do so. Nevertheless, immigration officers aim to assess the genuineness of the business plan rather than its likelihood of success.
13. Unclear Policy Objectives
Certainly, at the policy level, there is an ambiguity to clearly define an ‘entrepreneur’. Accordingly, the MAC report stated:
There is often an overlap in the definitions of entrepreneurs and the self-employed. However, using the OECD definition above, it is possible to be a self-employed business owner that does not engage in entrepreneurial activity. For example, small business owners may not be considered “entrepreneurial” if they only take on small levels of risk and do not provide new and innovative services.
Apparently, in practice, any business has a risk and return profile. Perhaps, most of the applicants usually intend to establish a similar business, which they are doing in their home country.
14. Policy Bias!
Apparently, the MAC report clearly emphasizes the differentiation of businesses on the basis of skill level. Perhaps, this indicates the mindset of the policymakers. However, the policy guidelines don’t differentiate businesses on the basis of skill. And also on the basis of economic sectors. The MAC findings indicate:
Indeed, there are some highly skilled industries which are more prevalent amongst the businesses set up by entrepreneurs than in the overall UK business population. These include the professional, scientific and technical activities sector and the information and communication sector, which jointly account for approximately 36 percent of entrepreneurs’ activity. However, there is also a substantially higher prevalence of entrepreneurs in the more generally lower skilled wholesale and retail trade, administrative and support service activities, and accommodation and food service activities sectors.
The table below illustrates the details of the entrepreneur businesses during 2008-15.
|Business Sector||Share of Businesses (Empolyment)|
|Wholesale and retail trade, repair of motor vehicle and motorcycles||27% (22%)|
|Professional scientific and technical activities||24% (9%)|
|Information and Communication||12% (6%)|
|Accommodation and food service activities||10% (14%)|
|Administrative and support service activities||9% (9%)|
|Other activities||3% (1%)|
|Real estate activities||3% (2%)|
|Financial and Insurance activities||02% (1%)|
|Human health and social work activities||2% (7%)|
|Transportation and storage||2% (2%)|
|Arts, entertainment and recreation||1% (1%)|
15. Lack of Differentiation between start-ups and existing businesses
Another major theme which has created ambiguity about the objectives of the route. Perhaps, the differentiation between business start-ups and existing business. However, on June 13, 2018, the Home Office announced a new “startup” route. And the details of which launched in early 2019. Apparently, the new start-up route announced during London Tech Week, widen the applicant pool of talented entrepreneurs. And also make the visa process faster and smoother for entrepreneurs coming to the UK. Moreover, in 2019 the start-up visa route has replaced the graduate entrepreneur route. And in March 2019, the UK innovator visa has replaced the entrepreneur route.
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