Category Archives: Tier 1

Investor Visa Route to End December 2017
Investors Encouraged to Apply Now

In December 2017, the Tier 1 Investor Visa will be withdrawn as a means to enter and reside in the UK. This will be a blow, not only to foreign investors who want to extend their portfolio to the UK market, but for UK businesses who rely on foreign capital to grow.

The Investor Visa, as it is now, provides a wealth of advantages to applicants who have £2 million to invest in Britain’s stable and robust markets. Unique benefits include:

  • there is no need to meet English language requirements, provide business plans, be a certain age or have a certain level of education
  • dependents (a spouse or children under 18 years) can enter and reside in the UK
  • travel in and out of the country is unrestricted
  • an applicant’s spouse is able to seek employment
  • property can be purchased immediately
  • applicants can apply for Indefinite Leave to Remain (ILR) after five years (or less depending on the amount invested)
  • applicants can apply for British Citizenship one year after being granted ILR

For high-net-worth individuals, the Tier 1 Investor Visa is the most flexible, expedient way to conduct business in the UK.

If the Investor Visa is working so well, why withdraw it?

Fear of allowing in those whose wealth was obtained by dubious means seems to be the driving factor for ending the Investor route, along with the visa developing a reputation as being a way for the super-rich to ‘buy a European passport’.

In 2014, the Investor Visa was subjected to significant reform; the most important being the requirement of £1 million in investment funds being raised to £2 million.

Other changes included:

  • a requirement that all £2 million had to be invested (previously 25 percent of the funds could be put into UK property in which the applicant could reside)
  • applicants can no longer borrow any of the funds
  • applicants can now be refused if immigration officers have reasonable grounds to believe the funds were obtained unlawfully or if they have concerns about the character and conduct of the party “providing the funds”

These reforms saw a substantial drop in the number of high-net-worth individuals applying for an Investor Visa, and we believe that there are enough safeguards in place to prevent ‘dirty money’ coming into the UK via the Investor route.

A vast majority of enquiries we receive regarding the Investor Visa are from people who see opportunities, not just to expand their investment portfolio, but to take advantage of the first-class education, cultural opportunities and stable political and economic environment that the UK is renowned for.

The need for fast action

Wealth managers, advisors and other high-net-worth intermediaries need to act now and advise their clients on the withdrawal of the Investor Visa in a mere 19 months’ time.

The required £2 million may take some time to accrue as all funds must be owned and not borrowed. Clients also need to be advised that at the time of application these funds must have been in the applicant’s account for 90 days which brings the deadline much closer. Any investigations by the UK Border Agency may also prolong the process.

Expert legal advice

The withdrawal of the Tier 1 Investor Visa has raised a sense of urgency among investors. The downturn in emerging markets has forced high-net-worth individuals to return to the more stable UK and US markets. Britain is predicted to become the world’s fourth largest economy over the next two decades, and the European Union generates a GDP of around €14.3 trillion (2014). This figures, taken together with the advantages a Tier 1 Investor Visa has to offer applicants, means advisors should be informing their clients of the changes as soon as possible. This will allow time for successful applications to be made.

The amount of capital involved and the complexities of the UK immigration system make it imperative that experienced legal advice is sought before applying for an Investor Visa. At UK Migration Lawyers, we have years of experience guiding high-net-worth individuals through the application process. We also work with wealth managers, real-estate advisors and other professionals who can assist with school placements and finding domestic help, both in and outside London.

To make an appointment or enquire further phone our office on 0121 777 7715.

UK Tier 1 (Entrepreneur) Visa – The Essentials

As mentioned in my previous article, the UK (Investor) Visa is going the way of the Dodo – due to become extinct in December 2017. For people who have money to invest and a viable business plan, the Tier One (Entrepreneur) Visa provides an alternative way to successfully enter the UK market.

Migrant entrepreneurs make an overwhelming contribution to the UK economy. As of March 2014 there were nearly 3.2 million companies active in Britain, with migrants as founders or co-founders of 464,527, equivalent to 14.5 percent of the total. Furthermore, migrant entrepreneurs are responsible for creating over 1.1 million jobs in Britain.

The UK has one of the strongest economies in the world. This, along with a thriving tech sector attracts hundreds of dynamic entrepreneurs to the country every year.

However, statistics show that the refusal rate for the entrepreneur route is high. This can be partly explained by the toughening up on requirements and the introduction of the “genuine entrepreneur test”, which is the UK Government’s response to counter abuse under this immigration category.

Eligibility Requirements

Unlike the UK Investor Visa, where the only substantial requirements are;

a) have a lot of money (£2 million or more); and
b) make sure the money is clean

the entrepreneur route is more taxing in its requirements.

To qualify an applicant must show:

  • access to either £50,000 or £200,000 in investment funds held in a regulated financial institution
  • they speak English
  • they are able to support themselves
  • they score at least 95 points on the Points Based System (PBS)
  • they are 16 years or older
Access to £50,000

To apply, the £50,000 must come from one of the following sources:

  • a UK entrepreneurial seed funding competition endorsed by UK Trade and Investment (UKTI)
  • a UK government department making funds available for the purpose of setting up or expanding a UK business
  • a venture capital firm registered with the Financial Conduct Authority (FCA)
Access to £200,000

Having £200,000 provides more flexibility as to the source of the funds. To apply the money must be either:

  • the applicants own funds
  • made available to the applicant by other people (‘third parties’), eg a husband, wife, partner or investor
  • in a joint account with a spouse or partner but only if they aren’t applying for a Tier 1 (Entrepreneur) visa

Applicants must also provide evidence of a clear, comprehensive business plan.

Dependent family members (a spouse and children under 18 years) are entitled to accompany an entrepreneur but they must acquire their own visa if they are from outside the EEA.

The ‘genuine entrepreneur’ test

Introduced in January 2013, the ‘genuine entrepreneur’ test is both subjective and strict, making it a challenge to pass. Applicants must prove they can start a sustainable business in the UK by providing a detailed business plan and attending interviews with Home Office staff.

Whilst not quite on par with facing Lord Sugar on The Apprentice, applicants face a challenge in that the interviewing panel are unlikely to know anything about the applicant’s business. Therefore, candidates applying for an Entrepreneur Visa need to:

a) provide clear evidence that they have the knowledge and experience required to run a business in their chosen industry;
b) have a comprehensive business plan, showing that the necessary market research has been done and financial numbers crunched, proving it is a viable venture;
c) explain clearly via the business plan or at an interview that they understand the business, their place within it, the market and how to manage finances;

if you desire any chance of succeeding with your application.

And the application procedure is set to become even tougher. In March 2015, the Government commissioned the Migration Advisory Committee (the MAC) to review the Tier 1 (Entrepreneur) Visa category.  The MAC made a number of recommendations aimed at making the process for gaining the visa even more stringent.

The recommendations include:

  • allowing third-party endorsements of the applicant and business plan from the UK Trade & Investment (UKTI)-approved accelerators to endorse individual applicants
  • the ‘genuine entrepreneur’ test should be conducted by industry experts rather than civil servants
  • the £200,000 threshold should continue to apply to deter low-quality applications
  • the £50,000 could be lowered as some start-ups require low capital investment initially
  • the Government could work with UKTI and the UK Business Angels Association to explore the feasibility of approving selected angel investor networks or syndicates to provide third party endorsement
  • a greater emphasis should be placed on the applicant’s track record in business as opposed to the feasibility of the business plan
  • successful applicants should be required to report on the success of their business to the Home Office to show they are actively growing their venture

The Government is currently reviewing these recommendations.

Getting to ‘Go’

People with the tenacity and drive to launch a new venture in a foreign country do not want their plans delayed by Government red tape. Those applying for a Tier 1 Entrepreneur Visa should seek expert legal advice on the process. Obtaining legal guidance on how to assemble a business plan that will satisfy Home Office staff and getting advice on preparing for interviews help applicants achieve thier commercial goals swiftly.

At UK Migration Lawyers, we have years of experience guiding high-net-worth individuals and entrepreneurs in successfully applying for a UK Entrepreneur Visa.

To make an appointment or enquire further phone our office on 0121 777 7715.

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