Clampdown
on Tier 1
(Entrepreneur)
Route

24 July 2014

New restrictions on the entrepreneur visa route have been introduced by the Home Office in response to apparent scams from individuals and organised criminal groups.

The Tier 1 (Entrepreneur) route allows migrants with access to at least £50,000 investment funds to set up businesses in the UK. The popularity of this scheme, especially among recent graduates, has risen rapidly since the closure of the post-study work visa route.

Since January 2013, individuals seeking to enter or remain in the UK under the Tier 1 Entrepreneur category have been required to satisfy the authorities that they genuinely intend to establish (or take over) a business in the UK. In their assessment, trained UK Visas & Immigration (UKV&I) caseworkers take into account a number of factors including the credibility of the source of the funds allocated for investment, the integrity of the proposed business plan and the previous educational and business experience held by the applicant.

However, despite caseworkers conducting this ‘genuineness’ test ahead of issuing the visa under this category, the UKV&I still believe that this visa route is open to abuse by migrants with little or no intention of establishing a business here.

Therefore, in a recent Statement of Changes in Immigration Rules (HC532) laid before Parliament, new restrictions were placed on the ability of those already present in the UK as a Tier 4 (Student) migrant to make an in-country application for an extension of stay as a Tier 1 (Entrepreneur).

In future, applicants who are in the UK in a study category are now only able to apply to switch into Tier 1 (Entrepreneur) if they have access to £50,000 funding to invest in business from a government-approved source. The provision for venture capitalist funding has been removed.

These restrictions are set to result in a reduction in the number of applications received by the UKV&I and, perhaps, fewer refusals. Currently, around two thirds of applications under this category are refused in the UK on the basis that the authorities are not satisfied that the applicant is a genuine entrepreneur.

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