UK Border Agency – Changes announced 30 January 2013

The UK Border Agency (“UKBA”) has announced key changes to the Tier 1 Entrepreneur route.  These are as follows:

  • The introduction of a “genuine” entrepreneur test as a form of assessment of an applicant’s credibility;
  • The UKBA will use further specified criteria when assessing initial applications and may both request additional documents as well as seek an interview with the applicant should they have concerns;
  • Specific requirements for investment of funds to be available on an ongoing basis rather than solely at the time of application; and
  • A new power for the UKBA to curtail a Tier 1 Entrepreneur’s visa/leave to remain if they are found to be non-compliant.

The changes are effective as of 31 January 2013, and as such affect all new applications, including those which have already been made but have not yet been decided. The Government has stressed that these changes have not been brought in to deter genuine overseas entrepreneurs to the UK but is in response to ‘organised criminality and abuse by individual applicants in the Tier 1 (Entrepreneur) category’.

The changes in summary are as follows:

The UKBA must be satisfied that the applicant genuinely intends to ‘establish, takeover or become a director of one or more businesses’ in the UK within the next 6 months and genuinely intends to invest the requisite money in this business.

The UKBA must also be satisfied that the money is genuinely available to the applicant and that it will remain available until it is spent by the business or businesses. This is largely in line with the existing Rules but with heightened emphasis on how the UKBA will consider the funds that the applicant is relying upon. The new Rules state that the following will be taken into account:

  • ‘viability and credibility of the source of the money’;
  • ‘viability and credibility of the applicants business plans, and market research on their chosen business sector’;
  • ‘applicants’ previous educational and business experience (or lack thereof)’; and
  • ‘applicants’ immigration history and previous activity in the UK’.

Although there is not yet a requirement to provide details of the proposed business, it seems likely that the applicant will be required to provide business plans and market research as well as evidence of the source of the money. Evidence of where the investment funds were obtained, and evidence that it will remain at the applicant’s disposal, may be requested as part of the UKBA’s wider discretion following these changes.

The UKBA further reserves the right to request additional information and evidence. Any requested documents must be received by the Agency within 28 days of the request.

Curtailment of Leave

Leave to enter or remain which is granted under Tier 1 (Entrepreneur) may be curtailed if within 6 months the applicant has not done the following:

  1. Registered with HM Revenue and Customs as Self Employed;
  2. Registered a new business in which the entrepreneur is a director; or
  3. Registered as director of an existing business.

Or if:

  1. The investment funds cease to be available to the applicant, except where they are spent in the establishment or running of his business or businesses.

The result of the changes as outlined above is that there is a greater onus upon the applicant to demonstrate that they are genuinely investing in a business in the UK. Further, the UKBA will be keeping a closer eye on applicants once they have their Tier 1 (Entrepreneur) visa status since they must demonstrate an ongoing continued involvement in the business throughout the duration of their status as a Tier 1 (Entrepreneur).

There is therefore an ever more important need for sound financial, business and immigration planning under this category.