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Your guide to the Tier 1 entrepreneur visa

The entrepreneur visa (like any UK visa) is a highly complex beast with a multitude of rules, exceptions and grey areas. While we can’t cover every detail, we’ve done our best to keep things simple and give you the main points.

This guide covers:

• what you need to apply for the entrepreneur visa
• how to switch from study or graduate-based visas
• what it costs
• a couple of examples
• how to get the right advice

What you need to apply for the entrepreneur visa

Score 95 Points

The main part of the process is based on points. The magic number is 95 - to get there, you’ll need to show:

• you have investment funds of at least £200,000 or £50,000 (we’ll explain the difference below) - 25 points
• the funds are held in a regulated financial institution (e.g. a bank) - 25 points; and those funds are ready to be used (i.e. ‘disposable’) in the UK - 25 points
• your level of English meets required standard - 10 points
• you have sufficient funds to support yourself in the UK - 10 points

You’ll need to provide a vast amount of documents and evidence to support these points; a large number of applications are refused due to the documents not being right. And because you cannot formally ‘appeal’ these decisions to an independent tribunal (you will normally only be granted an ‘administrative review’), it is critical to get things right first time.

Are you a “genuine entrepreneur”?

Got the money but no plan? Think again. In 2013 the government cracked down on applicants pretending to be entrepreneurs by introducing the “genuine entrepreneur” test. You may be interviewed - think “Dragon’s Den” but without the fame. You’ll now (from April 2015) need a business plan, detailing your proposed business activities in the UK and how you expect to sustain your business, as well as a raft of other documentation proving that you are a genuine business-person.

It’s important to remember this sits outside the points system; it is a subjective test. This means that even if you score the full 95 points, the immigration officer can still reject your application if you fail this test. So a solid, well-written business plan is vital, as well as other extensive documentation to prove your business credentials.

The amount and source of funds

Normally, you will need to show that you have £200,000 available to invest into business in the UK, although this is sometimes reduced to £50,000 (see below).

If the funds are yours or made available to you by a third party (e.g. an investor or spouse), the amount required is £200,000. Previous investments can also be counted towards the threshold as long as they were made in the 12 months prior to your application.

The amount drops to £50,000 if the funds come from one of the following government ‘approved sources’ which includes:

• one or more venture capital firms registered with the Financial Conduct Authority (e.g. Balderton Capital)
• a UK entrepreneurial seed funding competition endorsed by UK Trade and Investment (e.g. Seedcamp)
• a UK government department making funds available for the purpose of setting up or expanding a UK business

This option is particularly popular with migrant startup founders in the tech sector.

Entrepreneur teams

There’s also the option of forming an ‘entrepreneur team’ with a maximum of one other applicant for the entrepreneur visa, allowing you to share the same investment funds. Keep in mind you’ll each have to submit separate applications and name each other in the applications.

Switching to the entrepreneur visa

Migrants who are already in the UK make up the vast majority of applications for entrepreneur visas. So in all likelihood, this means you! Your option is typically to ‘switch’ your existing visa to an entrepreneur visa. There are several switching routes, but here are a few examples:

From Tier 1 (Graduate entrepreneur) visa

If you’re on a Tier 1 (Graduate Entrepreneur) visa, you can switch to a Tier 1 entrepreneur visa if you have £50,000 to invest, made up of your own money or together with third-party funds. Just like applicants using the £200,000 threshold can have previous investments counted, the same goes for graduate entrepreneurs, except the investment window is extended to 24 months prior to the application date.

From Tier 4 (Student) visa

If you’re on the Tier 4 (Student) visa, you can switch to a Tier 1 entrepreneur visa if you have £50,000 in funding from one of the above sources, but not venture capital firms.

From Tier 1 (Post Study Work) visa

Similarly, migrants on Tier 1 (Post Study Work) visas can also switch, provided (bear with us, this starts to get tricky):

• they have £50,000 in funding from one of the above sources, again not from a venture capital firm; unless
• they have been continuously engaged in business activity (in a skilled occupation) since before 11th July 2014 up to the date of application, in which case they are permitted to have at least £50,000 from any source, including from venture capital firms and third parties. There are also additional criteria to meet.

Again, previous investments made within the 12 month window before the date of application can be counted.

How much does it cost?

The government fees per person - that is, the minimum spend just to apply - is £1,180 (applications by post or online) or £944 (applications in person outside the UK). It’s slightly less for applicants from Turkey or Macedonia.

However, due to the complexity of the rules (which are ever-changing), most applicants use experts such as immigration lawyers to prepare and submit their applications. Of course this will cost you extra, but it gives you the best chance of success.

Enquiries for Tier 1 visas are a popular here at Lexoo and we’ve helped a lot of startup founders and entrepreneurs get quotes from specialist entrepreneur visa lawyers. In our experience, prices have typically ranged from £1,300 - £3,500 depending on the complexity of the applicant’s circumstances.

Examples:

1. We recently helped the owner of a UK-based media studio find assistance in relation to switching to the entrepreneur visa from her Tier 1 (Graduate Entrepreneur) visa. After receiving a selection of quotes, she selected a quote from a specialist Tier 1 visa lawyer for £1,450. It included a face-to-face meeting and assistance with all aspects of the application through to completion.
2. Another enquiry was for a London-based, FinTech startup that needed entrepreneur visas for two members of the founding team, who are from the United States. Quotes ranged from £1,375 to £2,625 per co-founder for the preliminary advice through to complete application.

Extending your UK entrepreneur visa

The UK entrepreneur visa allows you to stay and work in the UK for up to 3 years and 4 months. You can apply for an extension of a further 2 years, but you’ll need to satisfy a few criteria:

• the business must be operating;
• the required amount (see above) has been invested in the business; and
• 2 full-time jobs for ‘settled’ workers (i.e. normally UK or EEA nationals) have been created.

Be warned however, the rejection rate for renewing this type of visa is very high (at around 50%). But if you succeed, it can also lead to an indefinite ‘leave’ (or right) to remain in the UK.

Find the right expert

Entrepreneurship is no walk in the park. Unfortunately, getting a UK entrepreneur visa is no different. Even the most sophisticated, world-class entrepreneurs find the process both daunting and highly challenging.

Not only are the rules complex, supplying the mountain of documentary evidence to support your application is a massive burden. Remember, you’ll also be relying on your investors and bankers to help you supply the paperwork, so knowing exactly what’s required is super important. You’ll normally only be given one bite of the cherry, so make sure you get it right first time.

To make sure you get the right help, send us an enquiry and we’ll get you multiple fixed-fee quotes from entrepreneur visa lawyers within 24hrs, for free.

Interested in the Tier 2 Sponsored Visa Scheme? Read more here.