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Tier 1 Entrepreneur and Graduate Entrepreneur visas has been replaced with Start-up and Innovator visas

The Tier 1 Visa category is undergoing significant changes starting this April 2019 as per the statement of changes to the Immigration Rules published on 7 March 2019.

The statement published by the Home Office and UK Visas and Immigration (UKVI) has laid out the changes and confirmed that the proposed changes will come in effect starting 29 March 2019.

The TL;DR version is that the existing Entrepreneur and Graduate Entrepreneur categories are being replaced with new Start-up and Innovator categories and the Investor category under the same route is undergoing significant reforms.

Background

The Tier 1 visa category has lately gained a lot of attention with regard to changes as it has been thoroughly scrutinised by the UKVI.

Back in December 2018, the Immigration Minister Caroline Nokes announced the suspension of the Tier 1 Investor visa category with less than 24 hours notice. The suspension came almost after three years since the publication of the Transparency International’s report in 2015, which criticized the apparent vulnerability of the Tier 1 Investor visa.

Without enough arrangements and alternatives in place, the Home Office decided to delay the suspension of Tier 1 visas in 2018 and reassured their commitment to reform this route. The immigration rule changes published back in December 2018 didn’t confirm the Tier 1 category changes with planned updates due in March 2019.

Towards the end of the year, a written ministerial statement proposing the new visa routes and reforming the existing Tier 1 Entrepreneur categories was submitted by the Immigration Minister.

Tier 1 Visa Changes

In the recent statement of changes to the Immigration Rules published on 7 March 2019, the UKVI and the Home Office have confirmed extensive the proposed changes to the Tier 1 category.

The statement includes several amendments made to points based visa categories including Tier 2 and Tier 4 General visas.

However, the most prominent changes include the closure of Tier 1 (Entrepreneur), Tier 1 (Graduate Entrepreneur) and significant reforms for the requirements of Tier 1 (Investor) visas.

Tier 1 (Entrepreneur)

With regards to the Tier 1 (Entrepreneur) visa, the government noted that this category is in need of substantial reform, as it has a significant record of low-quality projects which contributed a ‘little or nothing’ to the UK economy. Such changes are also explained by rising financial crimes such as money laundering and fraud.

This follows the Migration Advisory Committee (MAC) review and reports published as far back as 2015, which were covered previously in our blog. The upcoming changes were therefore in some way expected in some way or form.

The Tier 1 Entrepreneur category will now be scrapped for new applicants after 30 March 2019. This will, however, not affect the migrants that are already on this visa category who are applying for extension or ILR.

Extension applications for migrants already on the Tier 1 Entrepreneur category will remain open until 5 April 2023 and they can apply for settlement under this route until 5 April 2025.

Tier 1 (Investor)

The Tier 1 (Investor) visa route, for high net worth migrants requiring an investment of at least £2 million in the UK has also undergone significant reforms.

As per the existing requirements, the evidence for the funds intended for investment should have been held by the applicant in the UK for at least 90 days. This 90-day period has been extended to a 2-year period although it’s not fully clear about the pieces of evidence expected to fulfil this requirement.

Additionally, the current requirement of opening a UK bank account for the purpose of making a Tier 1 Investment is further stretched by aditional onerous provisions, so the bank is obliged to confirm that they have carried out due diligence and KYC procedures.

The ability to choose to invest in government bonds, which was previously allowed, will also be permanently suspended for migrants applying under the Tier 1 (Investor) category.

Tier 1 (Graduate Entrepreneur)

As for the Tier 1 (Graduate Entrepreneur) category, the deadline to apply under the route is slightly longer until July 5, 2019. Higher Education Institutions or the Department for International Trade can issue endorsement letters until 5 April 2019 and the applications can still be made until 5 July 2019.

The immigration minister noted that the Graduate Entrepreneur category based on its endorsement approach was working well and the new start-up visa category which will replace the route was introduced expanding on its success.

New Tier 1 Visa Categories

The Tier 1 (Graduate Entrepreneur) and Tier 1 (Entrepreneur) categories are being replaced by two new categories – Start-up and Innovator.

The difference between Tier 1 (Graduate Entrepreneur) and the new Start-up category is that the applicants under the Start-up route will not need to be graduates and the requirement of securing funding will cease.

Those who succeed in their application will get a leave for a period of two years instead of one and will be able to further develop their career by applying for a new Innovator visa category.

The Innovator visa option is intended for more senior and mature entrepreneurs or business people. Migrants will have to invest funds of £50,000 in their businesses from legitimate sources.

This requirement for funds will be waived for migrants who want to switch from the Start-up category and those who have made a significant achievement against their business plans.

Here’s a summary of the main changes and features of the two new visa categories introduced under the Tier 1 route.

Start-up Visa

  • This visa category is an expanded version of Tier 1 (Graduate Entrepreneur) category which would be closed to new applicants from July 5, 2019.
  • Targeted for migrants looking to start a new business for the first time in the UK.
  • The category expands eligibility to more applicants, not just recent graduates, and without the need to have secured initial funds for their businesses.
  • Applicants will be endorsed by an independent endorsing body vetted by the UK government.
  • The Start-up visa will be granted for two years initially (doubled from one year under the Graduate Entrepreneur category) and applicants will be able to progress to the Innovator category.

Innovator Visa

  • This visa category will replace the Tier 1 (Entrepreneur) route which will be closed to new applicants from March 29, 2019.
  • Intended for more experienced businesspeople with innovative, viable and scalable business plans.
  • Applicants will be required to be endorsed by a designated endorsing body approved by the UK government.
  • Additional requirements of £50,000 funds to be invested in their businesses (reduced from £200,000 for most applicants in the current Tier 1 (Entrepreneur) category).
  • Applicants who satisfy at least two of the Home Office’s new criteria (covering investment, innovation, business growth and job creation) may qualify for settlement after three years on this visa category.

The Tier 1 Category changes discussed above, however, don’t affect the Tier 1 (Exceptional Talent) category.

At Edmans & Co, we have assisted hundreds of applicants with Tier 1 visa categories over the past year. Please get in touch with one of our immigration lawyers if you need any assistance with your application.

You can also book a consultation if you want to discuss your eligibility and requirements under the new visa categories.

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