The tier 1 Entrepreneur Visa route provides a way for people with investment funds of £50,000 or £200,000 to enter the UK and achieve settlement. Depending on whether you meet the relevant criteria, the latter may be achieved within three years.
The key to successfully obtaining entry into the UK via the entrepreneur route is:
a) meeting the eligibility requirements; and
b) passing the Genuine Entrepreneur Test
This article concentrates on the latter.
An immigration solicitor will provide you with the best advice on preparing and passing the Genuine Entrepreneur test. Understanding what is required by the Home Office and the motivations behind entry clearance officers’ decisions can make the difference between your application for a tier 1 Entrepreneur Visa being accepted or rejected.
The Genuine Entrepreneur test is applied strictly, and the test is subjective. You will be expected to provide swathes of relevant supporting documentation, perhaps attend an interview with Home Office officials and ensure your application is filled out and submitted correctly.
However, you may still be rejected, despite all your preparation. Although engaging an immigration lawyer to manage your tier 1 Entrepreneur Visa application will involve a further investment of time and money, it may provide you with the best opportunity for your application’s success.
This is key. The test is a subjective test, meaning you will need to convince the immigration official looking at your application. He or she will be following the Home office guidance, but it is their independent assessment and decision that will ultimately decide whether you are granted entry into the UK.
You therefore need to understand the motivation behind the Genuine Entrepreneur Test. A great place to start is by reading the guidelines and the Migration Advisory Committee (MAC) 2015 report on the tier 1 Entrepreneur Visa and Graduate Entrepreneur Visa.
The British government’s goal for the past seven years has been to drive net migration down below 100,000. It has never come close (last year the figure for net migration was 273,000).
Unfortunately, the immigration official evaluating your claim will be looking for reasons to refuse you, rather than reasons to accept you.
This statement is not meant to be negative. The UK welcomes and encourages ‘genuine’ entrepreneurs who invest in or launch a scalable business, capable of achieving high turnover and creating jobs for ‘settled’ people. However, the Home Office is highly alert to examples of ‘Investor-lite’ applicants. Investor-lites use their £200,000 to invest in an existing UK business, in exchange for (usually) a small equity stake, often a few percent. They usually become a Director of the company into which they have invested, which is enough to evidence the requirement that they are actively involved in the running of the business. However, in the ‘Investor-lite’ model, the migrant is typically not involved in the day to day running of the business.
This type of activity is referred to as ‘Investor-lite’ because the activity is similar to that under the tier 1 (Investor) visa route, in that the migrant is providing a capital injection. However, the financial threshold is substantially lower at £200,000 rather than the tier 1 (Investor) threshold of £2 million.
If you plan to invest in an existing company, you must prove that you will be actively working in the organisation, are experienced in the industry and have concrete, achievable plans to grow the business.
immigration officials are also on the lookout for low-skilled, low growth businesses that are sometimes launched by tier 1 Entrepreneur applicants. Often these operations are in the catering, retail and wholesale industries.
Keep these factors in mind when applying for a tier 1 Entrepreneur Visa. If you plan to enter a market which is relatively low-skilled or invest in an existing business, your application is likely to be heavily scrutinised. Make sure you understand and are prepared for this by taking expert advice on how to prepare a solid application with the right supporting documentation.
Tip 2 – Understand and show your experience in the market you have chosen to launch/invest in
Sadly, one in three start-ups in the UK fail within the first three years. For migrants, with no experience of the UK market, or the sector they plan to operate in, success is rare.
Foreign-born entrepreneurs must cope with copious amounts of challenges in addition to those that already come with setting up a new venture. Business people who enter the UK via the Entrepreneur Visa route must deal with a new legal and commercial landscape, a different culture, and the time-consuming task of establishing networks and partnerships that can help their business succeed.
One way to reduce your risk is to invest in or partner with an existing UK company. However, even if you do follow this route, Home Office officials will want to see that you have lived and worked in the UK before, or failing that, within the industry, you plan to invest/launch in. You should demonstrate that you have a clear understanding of your competitors, cost/profit margins, employment laws, trade & custom regulations and your potential customers and how you plan to market to them.
The main document immigration officials will examine to check your understanding of the market is your business plan, which brings us to Tip 3.
Tip 3 – Write your business plan for immigration officials, not investors
The key to writing a business plan that will satisfy the Genuine Entrepreneur Test is to concentrate on showing you can meet the requirements of the Entrepreneur Visa.
Remember, your audience will be Home Office officials, who are public servants and therefore may have little or no business experience.
Your business plan needs to demonstrate that you:
- understand the market your business is based in
- have a strategy in place to create two full-time jobs for settled people within three years
- have the required funds, and the source of these funds is legitimate
Your business plan should provide the following information:
- a description of your business, its products, and services
- what your investment funds (£200,000 or £50,000 will be spent on)
- a financial forecast for the next three years
- your previous experience and qualifications in related industries
- comprehensive market research, including a SWOT analysis
- who your customers will be and a marketing plan for reaching them
- your prices
- where your business will be based and details of the commercial lease
- what licences and professional registrations you will need
- your staff, and their roles within the business (this should include a plan for employing two ‘settled’ people)
- your professional advisors such as accountants, lawyers
Tip 4 – Make sure your maintenance funds are separate and in addition to your investment funds
Entrepreneur Visa applications are often rejected because applicants show they have the investment funds required but fail to provide evidence that they have money to live on.
Don’t fall into the trap of thinking your investment funds can include maintenance funds. The latter must be kept separate.
Tip 5 – Be aware of your application’s weaknesses
Your tier 1 Entrepreneur Visa application will have weaknesses. It is imperative that you understand what these are and have a plan to address them before they are brought up in an interview with the Home Office.
For example, if you need to gain some industry specific experience or gain professional advice regarding running a business in the UK, create a strategy to ensure these things happen before you submit your application.
An experienced immigration lawyer will audit your application and the supporting documents you plan to provide. They will give you an unbiased opinion as to whether you need to make changes or act to remedy the shortfall before you apply for a tier 1 Entrepreneur Visa. This will save you time, money, and frustration by ensuring you do not submit an application that has a high chance of not being successful.
OTS Solicitors is one of the most respected immigration law firms in London. By making an appointment with one of our immigration solicitors, you can be assured of receiving some of the best legal advice available in the UK today. Our business immigration solicitors, Teni Shahiean, Oshin Shahiean, Najma Ali and Dr. Lusine Navasardyan, have extensive experience in assisting entrepreneurs to create tailored business plans and pass the Genuine Entrepreneur Test.
If you wish to discuss any of the points raised in this blog, please phone our London office on 0207 936 9960.
For the best expert legal advice and outcome on your UK immigration application, contact OTS immigration solicitors on 020 7936 9960 or contact us online.
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Posted on: Tuesday, 30 May, 2017