Changes to Tier 1 Entrepreneur and Tier 1 Graduate Entrepreneur

The changes to Tier 1 points based system is an indication on how the United Kingdom plans to attract talented entrepreneurs and business founders from around the world.

Entrepreneurs play a key role in driving economic growth, job creation and innovation. The changes to the Tier 1 (Entrepreneur) Visa route will ensure that the UK remains a world leading destination for the best of global talent.

These changes come in addition to other recent reforms in the visa system, including doubling the number of visas available to 2000 on the Exceptional Talent route.

The announced changes have significantly impacted the Tier 1 points based system. It replaces the Tier 1 (Entrepreneur) and Tier 1 (Graduate Entrepreneur) categories with two new visa categories:

1. Start-Up Visa

2. Innovator Visa

In addition, there have also been some changes introduced to the Tier 1 Investor visa.

Differences between Tier 1 Graduate Entrepreneur and Start-Up Visa:

1. The Start-Up Visa is open to any applicant starting a new business in the United Kingdom for the first time, it is not limited to graduates.

2. There are no initial funding requirements; applicants will instead need to be endorsed by a UK Government approved body, such as Universities or Accelerator Programs, to assess if the proposed business is innovative, viable and scalable. 

3. Start-Up Visa allows a leave to remain for 2 years (previously 1 year under the Tier 1 Graduate Entrepreneur route). 

4. A leave to remain under the Start-Up route can be switched to Innovator route upon the end of the 2-year period to continue to grow their business and apply for settlement.

Differences between Tier 1 Entrepreneur and Innovator Visa:

1. The expert endorsement requirement will mean that any applicant applying under this route will need to have their business plan endorsed by a UK Government approved body, such as Universities or Accelerator Programs, to confirm that the business is viable, innovative and scalable.

2. The Innovator category is intended to target more experienced entrepreneurs. Applicants need £50,000 to invest in their business from a legitimate source, reduced from £200,000 from the previous Tier 1 Entrepreneur category. The required pre-investment holding period for funds has increased from 90 days to 2 years.

3. Applicants can apply for settlement after 3 years, down from 5 years under the previous Tier 1 Entrepreneur, as long as they meet the following criteria:

• The individual has invested at least £50,000 into a UK business and actively spent this money to further the business development. The funding requirement will be waived for those switching from the Start-up visa category who have achieved significant progress with their business

• Doubling the number of customers

• Applying for intellectual property protection after R&D

• Business annual turnover to be in excess of £1 million

• Hiring at least 10 full-time local employees

There are reports currently detailing how some of the enforcement bodies are unable to accept applications and therefore there are likely to be further announcements from the Home Office detailing further changes to this route.  

If you require further advice on applying for a visa under this category, then contact Cranbrook Solicitors today to discuss how we can help.