06 Aug Tier 1 Entrepreneurial Team – how to make the most of £200K?
The Tier 1 Entrepreneur Scheme allows foreign businesses and migrants to establish, join or take over a company in the UK as well as to settle in the long run, usually after 5 years of residence in the United Kingdom.
Unlike the Tier 1 Investor Scheme, which requires a substantial level of cash funds in the amount of 1 million, the Tier 1 Entrepreneur Scheme allows an applicant to qualify for an entry clearance on the basis of £200,000 subject to meeting the relevant criteria under paragraph 245DB as well as having a sound and well-researched business plan.
Significantly, while an investor must rely on funds solely under his/her control, a Tier 1 Entrepreneur can share the financial burden with another applicant forming an entrepreneurial team. Both applicants will need, however, to rely on the same funds and be actively involved in the running of the company. These funds cannot be held in individual savings accounts or assets such as stocks and shares.
There is no upper or lower limit to the level of individual investment as long as the shareholding and control over the funds and the company are equal between the two business partners. This will need to be supported by adequate documentation showing that the two applicants have equal access to the funds and that the money is genuinely shared and available to the entrepreneurial team and will remain available until such time as it is spent by their business or business. “Spent” excludes spending on the applicants’ own remuneration.
Significantly a team is limited to two applicants who will also need to meet the English language and maintenance criteria. Thus, both applicants will need to evidence that they have the required level of English currently set at B1 of the CEFR under Appendix B and have the required level of daily minimum balance of £900 and £3100 respectively for in country and out of country application for 90 days preceding submission under Appendix C.
Even though the investment of £200000 does not need to be contributed equally, both applicants must demonstrate that the funds can be transferred to the UK, unless the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in the UK already regulate the institution where the money is kept.
Importantly, the Immigration Rules have been amended to introduce a “genuine test” whereby the Entry Clearance Officer will consider the viability and credibility of the business plan as well as market research that will make the business a realistic investment opportunity. Similarly each applicant’s education and professional experience will be taken into consideration as well as business experience and lack thereof. If in doubt, the Entry Clearance Officer may ask to be provided with additional evidence within 28 working days or contact the applicant(s) for an interview.
Thus, from our experience, the key to a successful application is the ability to correctly complete the forms and appendix, provide all the relevant documents in the right format as well as clearly explain the business plan and the applicants’ qualifications. The UKBA also requires some nationalities to have a TB test before submission of an application.
Finally, the UKBA will consider the applicants’ previous immigration history. As a result, it’s essential for both applicants to make full disclosure since under paragraph 320(7A) of the Immigration Rules, which states that entry clearance is to be refused:
“where false representations have been made or false documents or information have been submitted (whether or not material to the application, and whether or not to the applicant’s knowledge), or material facts have not been disclosed, in relation to the application or in order to obtain documents from the Secretary of State or a third party required in support of the application”.
Please note that the processing time may vary according to where the application is lodged. However, a team of entrepreneur does not have to apply from the same country or at the same time, but to avoid delays and confusion, it will be important to link the two applications to show that both applicants are part of an entrepreneurial team. The UKBA fees are £840 for each applicant and dependant.
If approved, the visa will be granted for a period of 3 years and 4 months. The applicants will need to register as a director within the 6 months from the specified date, register with the police if required and will not be able to take any employment other than working for the business or businesses established in the UK. In addition, to qualify for an extension the business(es) will need to generate two additional full-time jobs for settled workers for at least 12 months.
We have helped many applicants in making a successful application and considering the more stringent requirements we would advice a prospective applicant to book a consultation with a specialist from our immigration team to have a full understanding of the application process.