Start-up Visa vs Innovator Visa:
What's the difference?

18 November 2021

The UK’s revitalised points-based immigration system has been designed to attract overseas workers based on the skills they can bring and the contributions they can make to the economy.

By far the most popular route for foreign nationals looking to work in the UK is the Skilled Worker route. To qualify for a Skilled Worker visa, applicants must have a confirmed job offer from a licensed sponsor at the required skill and salary level.

However, you may be able to enter the UK without a job offer if you intend to set up a new business here. The Start-up visa and the Innovator visa are both designed to attract entrepreneurial talent from overseas, and are aimed at individuals looking to set up an innovative business in the UK.

At first glance, the Start-up visa and the Innovator visa appear to be very similar routes, and budding entrepreneurs often ask: what’s the difference? Although both routes are aimed at those wishing to start a business in the UK, there are some differences between the two and it is important to choose the category that’s right for you. Keep reading to find out who can apply under each route, and which category is best suited to your experience level and business plans.

Start-up visa

The Start-up visa is for individuals who want to set up an innovative business in the UK for the first time. You must be able to show that your business is:

• A new idea – You cannot join a business that is already trading.
• Innovative – You must have an original business idea which is different from anything else on the market.
• Viable – It has potential for growth.

Before you apply for a Start-up visa, you will need to have your business or business idea assessed by an endorsing body that is approved by the Home Office. If the endorsing body believes your business idea is viable, they will provide you with an endorsement letter which you should provide when you apply for your visa.

You must also meet the following eligibility requirements in order to apply:

• You must be at least 18 years old
• You must meet the English language requirement
• You must be able to prove that you have personal savings of at least £1,270 in your bank account to support yourself whilst you’re in the UK.

Once your Start-up visa is granted, you can stay in the UK for 2 years. You cannot apply to extend this visa once it has expired. If you wish to stay in the UK longer, you may be able to switch to an Innovator visa if you successfully set up an active, trading business whilst on a Start-up visa and you have day to day involvement in it. Your endorsing body must assess and agree it before you can switch.

Innovator visa

Like the Start-up route, the Innovator visa is also for individuals seeking to establish an innovative and viable business in the UK that is different from anything else on the market. The business idea must be a scalable business idea you have generated, or to which you have significantly contributed.

Innovator visa applicants must also have their business or business idea endorsed by a Home Office approved endorsing body.

Applicants must also:

• Be at least 18 years old
• Meet the English language requirement
• Show that they have personal savings of at least £1,270 in their bank account to support themselves in the UK.

If you want to set up a new business, you must have at least £50,000 in investment funds to apply for an Innovator visa. You will need to prove where you got your funding from. You are exempt from the investment funds requirement if:

• Your business is already established and has been endorsed for an earlier visa
• You’ve changed your business and already agreed it with your endorsing body.

Once your Innovator visa has been granted, you can stay in the UK for 3 years. If you want to stay longer, you can apply to extend your stay for another 3 years when your visa is due to expire. There is no limit on the number of times you can extend. You may be able to apply for settlement once you’ve been in the UK for 3 years.

Which route is right for me?

Put simply, the main differences between the Start-up visa and the Innovator visa is the level of experience required and the amount of funding you have available. More experienced business people with sufficient investment capital available are ideal candidates for the Innovator visa. Less experienced entrepreneurs who have not set up a business in the UK before are better suited to the Start-up route.

When deciding which category is right for you, there are several important questions to ask yourself:

• What is your level of experience? Under the Start-up route, applicants must not have previously established any business in the UK which commenced trading, except in limited circumstances. Simply speaking, this must be your first business venture in the UK. This is not a condition of the Innovator route, therefore applicants who have previously set up a business in the UK can still qualify under this category.
• How much funding do you have available? The amount of available funds you have is a critical factor in deciding which route is best suited to you. Both categories require applicants to have personal savings of at least £1,270. However, in most cases when applying for an Innovator visa you will be expected to have funds of at least £50,000 to invest in the business.
• Do you intend to work in another job whilst in the UK? Under the Innovator route, the conditions of your visa state that you cannot do any work in the UK outside your business and must have a key role in the day to day management and development of your business. However, those on a Start-up visa are permitted to work in another job as well as working for their business. You should therefore opt for a Start-up visa if you think you will want to take on additional employment or voluntary work as well as working on your business.
• Do you intend to settle in the UK? An important difference between the two routes is the ability to settle in the UK. The Start-up route does not lead to settlement in the UK, and you cannot extend your visa after the 2-year period of leave expires. Your best options if you wish to settle are therefore to switch to the Innovator category if you meet the requirements, or switch to another route such as the Skilled Worker route if you find suitable employment. On the other hand, Innovator visa holders can apply for Indefinite Leave to Remain after 3 years as long as the specific requirements are met – that’s 2 years sooner than in other routes such as the Skilled Worker.

Changes to the Innovator route

In July 2021, Smith Stone Walters reported on upcoming immigration reforms that were set out in the government’s Innovation Strategy. The Strategy touched on future plans to revitalise the Innovator route in order to build a more competitive offer.

The planned reforms include:

• Simplifying and streamlining the business eligibility criteria – Applicants will need to show that their innovative business venture has a high potential to grow and add value to the UK.
• Fast-tracking applications – A fast-track, lighter touch endorsement process is being explored for applicants with particularly advanced business ideas. Applicants that have been accepted onto the Department for International Trade’s Global Entrepreneur Programme will be automatically eligible.
• Building flexibility – Applicants will no longer be required to have at least £50,000 in investment funds to apply for an Innovator visa, as long as the endorsing body is satisfied that the applicant has sufficient funds to grow their business. The restriction on doing work outside of the applicant’s primary business will also be removed.

If implemented, these changes will grant more flexibility to those on an Innovator visa, by allowing them to undertake work outside the business. Removing the requirement to have at least £50,000 in investment funds will also make the route viable for more applicants.

Speak to an immigration advisor

If you are looking to establish a business in the UK and want more information on Start-up and Innovator visas, Smith Stone Walters can help.

To speak to an advisor, please contact us today.

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