Brief History of Investor and Entrepreneur Visas
The Investor Visa was first launched in 2008 and required applicants to have £1 million in investment funds. In November 2014, the amount of investment required was increased from £1 million to £2 million. The Investor Visa route was then discontinued in February 2022 because of the government’s concerns about applicants’ source of wealth as well as having national security concerns.
The Entrepreneur Visa was a different visa category to the Investor Visa. It was first launched in 2008 and was discontinued from March 2019. It required applicants to prove they had £200,000 of funds in which to invest in their business. The Entrepreneur Visa was discontinued in March 2019 as the government was concerned that the applicants’ business had low growth potential, and that some applicants had submitted identical business plans or were not investing the full £200,000 into their business.
Self-Sponsorship Under the Skilled Worker Visa Route and Sponsor Licence
How does an applicant who wishes to invest in the UK in view of obtaining Indefinite Leave to Remain now go about this, given that both the Investor Visa and Entrepreneur Visa routes are now closed? The answer lies in self-sponsorship under the Skilled Worker Visa category. The general principle is that applicants can create their own company, sponsor themselves for a Skilled Worker Visa, and then after 5 years of working for their company, they can obtain Indefinite Leave to Remain. How does an applicant go about doing this? Before an applicant is able to sponsor themselves, their company must first obtain a Sponsor Licence from the Home Office. The guidance provided below is how to obtain a Sponsor Licence for a start-up business, i.e. one that has not yet started to trade in the UK.
If you are not in the UK, is there a business partner that resides in the UK? The business partner can be a family member or someone else you trust. The reason for there being a business partner in the UK is twofold: (a) to assist in opening a corporate bank account; and (b) at least one senior personnel of your company must be in the UK to register as a Key Personnel for the future Sponsor Management System (SMS) under the Sponsor Licence.
What type of business are you interested in? Ideally, it is something that you are interested in and can see yourself doing for at least 5 years.
What job title from the Standard Occupation Code appears to be suitable for your future role? The minimum salary for Skilled Workers is £38,700 or the rate under the Standard Occupation Code, whichever is higher. The Standard Occupation Rate and the minimum salary rates can be located here: https://www.gov.uk/government/publications/skilled-worker-visa-going-rates-for-eligible-occupations/skilled-worker-visa-going-rates-for-eligible-occupation-codes
Find a potential office or work place for your business.
Calculate potential costs of your business, including initial costs as well as future operating costs.
Establish a UK company.
Consider hiring an accountant. They will also be able to assist in drawing up a draft Profit & Loss account and Balance Sheet, which can be submitted to the Home Office. This will help demonstrate your business is a genuine business.
Purchasing Employer’s Liability Insurance for a cover of at least £5m.
Proof of business premises, e.g. title register, lease, licence or tenancy.
Evidence the business has registered with HMRC as an employer for PAYE and National Insurance.
Business Plan
Although there is no requirement for how long the applicant’s business has been trading in the UK, if it is has not yet started to trade or it has only just started recently within the past 18 months, then to help prove the applicant’s business is a genuine organisation, a business plan can be attached to the application.
The business plan will set out the investment funds available to the applicant. It will also likely conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) of the relevant market. It will also answer the following questions that the Home Office will ask:
An explanation as to why your company is applying for a Skilled Worker sponsor licence, the sector you operate in and your opening/operating hours;
A current hierarchy chart detailing any owner, director and board members;
A list of employees, including names and titles (if your business has 50 employees or less);
Information about the jobs your company wishes to fill and for which it intends to assign a Certificate of Sponsorship (CoS), including the job title and occupation code, duties, where the job sits on the hierarchy chart, the minimum salary the company would guarantee if the job were vacant today and the skills, experience and qualifications required;
If the role for which the business intends to assign a CoS has not been advertised but a person has already been identified for the role, details of how the person was identified as the most suitable person for the job and various personal details.
The author of this article has 17 years of experience as an Immigration lawyer and has assisted organisations to draft their business plans: when drafting the business plan, it is important to play devil’s advocate so that not only are statements supported by evidence, but also to consider whether the statements are logical or whether they conflict with any other evidence the Home Office might obtain. For example, I have seen Sponsor Licence applications being refused on the basis that the Home Office discovered the street the applicant wished to open a hair salon on already had a couple hair salons nearby and so the Home Office did not believe the organisation would be a genuine organisation.
Priority Service for Sponsorship Licence
There is a Priority Service available for Sponsorship Licence applications so that for an additional £500, the Home Office can make a decision within 10 working days. Otherwise, the Home Office takes about 8 weeks to make a decision.
Certificates of Sponsorship (“CoS”)
Once the applicant’s Sponsor Licence application is approved, a Certificate of Sponsorship (CoS) needs to be assigned to the applicant so that they can apply for their Skilled Worker visa. CoS is an electronic certificate which is assigned to each worker and will have a unique reference number. The CoS must have been issued not more than 3 months before the date of the applicant’s Skilled Worker application.
The CoS must include the following information:
Details of the applicant’s name, job and salary; and
A start date which is no more than 3 months after the date of the Skilled Worker visa application.
Skilled Worker visa application
After the CoS is assigned to the applicant, the applicant can then proceed with their Skilled Worker visa application. Unless the employer has certified that they will guarantee accommodation and maintenance to the applicant, the applicant will need to prove they have at least £1,270 in savings, which has been held for at least 28 days. If there is a dependent spouse, an additional £285 savings is required. A dependent child will require an additional £315 with subsequent children requiring an additional £200.
For the English language requirement, level B1 on the Common European Framework of Reference (CEFR) is required for reading, writing, speaking and listening – this is equivalent to a score of 4 on the IELTS system.
Once the applicant completes 5 years of residence under the Skilled Worker visa, they are then eligible to apply for Indefinite Leave to Remain.
About the Author, Daniel Cheung
I, Daniel Cheung, am a solicitor-advocate with 17 years of experience. I have worked through many of the predecessor applications (e.g. Investor, Entrepreneur, Sole Representative, Points-Based System categories) and so I have experience and a wider understanding as to the Home Office requirements for the current available immigration categories. I have rights of audience in all courts and also conduct immigration appeals and judicial review applications.