Tier 1 Entrepreneur Visa to ILR Requirements and Guidance

This guidance relates to Tier 1 Entrepreneur Visa to ILR (settlement) application requirements and policy guidance under the New Rules after March 29, 2019. Accordingly, explains the details of Tier 1 Entrepreneur Visa to ILR Maintenance Funds, English Language, Genuine Entrepreneur Test (Business Plan), Qualifying Period, Job Creation, Statistics.

Please note effective from March 29, 2019, the Innovator visa UK has replaced Tier 1 entrepreneur. However, in terms of paragraph 245DB(a) of the Immigration Rules, migrants can make an application from Tier 1 Entrepreneur Visa to ILR 5 April 2025. Moreover, switching applicants can make Tier 1 Entrepreneur visa to ILR application until 5 July 2027. Afterwards, the Home Office will not accept the Tier 1 Entrepreneur Visa to ILR applications.

1. Requirements 2. Points 3. Investment Funds 4. Business Activity 5. Job Creations 6. Continuous Period 7. 3-Year Accelerated Settlement 8. Guidance Notes

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1. Requirements

Tier 1 Entrepreneur Visa to ILR

For a successful Tier 1 Entrepreneur Visa to ILR Application an applicant:

  1. needs to meet the requirements of paragraph 245D or 245DF of the Immigration Rules
  2. must not attract the general grounds for refusal in paragraphs 320 to 324 of the Immigration Rules
  3. must not be an illegal entrant
  4. scores seventy-five (75) points for the attributes
  5. needs to have knowledge of the English language and life in the UK as per Appendix Koll of the Immigration Rules, unless the applicant is under 18 years of age or above 65 years at the time of the application
  6. has not breached any of the immigration rules or laws, except for any period of overstaying allowed under the Immigration Rules, where the application was submitted before July 9, 2012

2. Points

Tier 1 Entrepreneur Visa to ILR

For Tier 1 Entrepreneur Visa to ILR an applicant needs to score seventy-five points:

  • Investment Funds – 20 Points
  • Business Activity – 20 Points
  • Job Creation – 20 Points
  • Continuous 5-years (or 3-years for Accelerated Settlement) – 15 points

The Tier 1 entrepreneur ILR applicants need to pass the genuine entrepreneur test. Accordingly, an applicant needs to satisfy during the assessment process that they have genuinely:

  1. established, taken over or become a director of one or more businesses in the UK
  2. operated the business in the UK
  3. invested the required level of funds in one or more businesses in the UK
  4. spent the funds for business development
  5. intended to continue operating one or more business in the UK
Entrepreneur Visa to ILR

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3. Investment Funds – 20 Points

Tier 1 Entrepreneur Visa to ILR

The applicant has invested own or third party funds of at least £200,000 (or points awarded for £50,000 funds in their last grant of leave) in cash directly into one or more UK businesses. An applicant does not need to provide evidence of investment if his/her last leave was as a Tier 1 Entrepreneur Migrant.

4. Business Activity – 20 Points

Tier 1 Entrepreneur Visa to ILR

For Tier 1 Entrepreneur ILR application, an applicant needs to engage in business activity at the time of the application. 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.

5. Job Creation – 25 Points

Tier 1 Entrepreneur Visa to ILR

For claiming 20 points for job creations, a Tier 1 Entrepreneur ILR applicant needs to demonstrate that they have:

  • 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.

Documents Checklist

For Tier 1 Entrepreneur Visa to ILR a migrant need to provide the following evidence to demonstrate job creation:

  • Employee is 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 pay slips 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 accountant’s letter to confirm the job creation.

Hourly Wage Rate and Part-Time Jobs

An applicant needs to provide 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 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 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, if the 2 part-time jobs exist for 12 months.

6. Continuous Period – 15 Points

Tier 1 Entrepreneur Visa to ILR

A migrant can apply for Tier 1 Entrepreneur Visa to ILR after 5-years continuous leave in the UK. If an applicant can meet additional criteria for accelerated settlement, then can apply for Tier 1 Entrepreneur Visa to ILR after a continuous period of 3-years. However, the migrant cannot combine a leave under Tier 1 Entrepreneur route with leave in any other category to meet the continuous leave requirements for ILR.

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 Home Office will consider only the most recent 3 or 5 years period.

Absences

For Tier 1 Entrepreneur Visa to ILR the migrant cannot have more than 180-days absence from the UK during any consecutive 12-months of the qualifying period. Moreover, the migrant needs to provide the list and reason of the absences on a form. However, a migrant is not required to provide any specified evidence to support the claim.

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 instance, if an applicant entered the UK 100 days after they obtained entry clearance and have a further 81 days absence during the remainder of the continuous 12 month period, then they 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 they could qualify.

Please note, whatever the reason for absences, these will still be counted towards the maximum 180 days. This includes any absences for work reasons or serious and compelling reasons. However, the only exception is where an applicant has been absent due to a British national, international environmental or humanitarian crisis overseas, such as Coronavirus.

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.

Entrepreneur Visa to ILR from Jan 11, 2018

For Tier Entrepreneur Visa to ILR applications made from 11 January 2018, the Home Office will consider absences 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

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 one-year period outside the UK to qualify for settlement.

The recurrent criticism of this rule is that it is 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.

7. 3-Year Accelerated Settlement

Tier 1 Entrepreneur Visa to ILR

A migrant can also apply for Tier 1 Entrepreneur Accelerated Settlement i.e. 3 Years Settlement if they can demonstrate that they have:

  1. started a business that has a turnover of at least £5 million
  2. joined or taken over an existing business that has seen an increase in turnover of over £5 million
  3. 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.

£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 they have taken over or invested in then needs to provide:

  1. 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 they are relying on to score points for settlement as a Tier 1 (Entrepreneur) migrant
  2. 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
    • that the accountant will verify the content of the letter to the Home Office on request

8. Guidance Notes

Tier 1 Entrepreneur Visa to ILR

Knowledge of Life and English Language

When a migrant applies for settlement then they are 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

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.

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.

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.

Grounds for Refusal and Rejection Reasons

Most of the Tier 1 entrepreneur visa to ILR applicants are refused 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 visa to ILR refusal grounds may relates to:

  1. General Grounds for Refusal
  2. Source of Funding
  3. Doing Business is not the Main Purpose
  4. Insufficient Evidence of Employment Creation
  5. Shell Companies
  6. Abuse of the Route
  7. Inferior quality of applications
  8. Subjectivity of the Genuine Entrepreneur Test
  9. Convoluted and Unclear Rules
  10. Insufficient Training of the Immigration Officers
  11. Unclear Policy Objectives
  12. Policy Bias!
  13. Lack of Differentiation between start-ups and existing businesses

What to do after Tier 1 Entrepreneur visa to ILR is refused?

There is no right of appeal against the Tier 1 Entrepreneur Visa Refusal. Moreover, in most of the instances, applicant may not be able to file an administrative review after the refusal letter. Nevertheless, a migrant can challenge the Tier 1 Entrepreneur Visa to ILR refusal by way of a Judicial Review.

Statistics

During 2008-17, a total of 819 applicants gets settlement grants because 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. The highest number of 414 settlement grants made to Tier 1 entrepreneur migrants during 2017. The most ILR have been granted to Pakistani, Chinese, and Indian nationals under the Tier 1 entrepreneur visa route.