Home Office announces new UK Startup Visa for Entrepreneurs

During London Tech Week, Home Secretary Sajid Javid announced a new startup visa route, stating that the new visa is “for people wanting to start a business in the UK. This will help to ensure we continue to attract the best global talent and maintain the UK’s position as a world-leading destination for innovation and entrepreneurs”.

The avant garde move, as announced, is simply to open a route, that was exclusively for graduates, to applicants without university degrees — as we all know Bill Gates, Michael Dell, Steve Jobs, Mark Zuckerberg, Hiroshi Yamauchi etc., didn’t need degrees to build their tech empires.

What we know about the new UK Startup Visa route

The Home Office’s publicity release, is sparse, but says that the new UK startup visa route will launch in the Spring of 2019.

Applicants for a UK startup visa must have an endorsement from a university or approved business sponsor, including accelerators.

It is unclear which route is to be replaced and sounds much like an amalgamation of requirements from several routes, so it may be helpful speculate on its possibilities by comparing it to the Tier 1 (Graduate Entrepreneur), Tier 1 (Entrepreneur) and Tier 1 (Post-Study Work) routes.

New UK Startup Visa vs. Tier 1 (Graduate Entrepreneur)

Graduate entrepreneurs, currently, as the name suggests, must be graduates. The idea is that post-graduation they have a genuine and credible business idea, and receive endorsement from a university/higher education institution or from the UK Department of International Trade (DIT).

For endorsement from an authorised endorsing UK higher education institution, Graduate Entrepreneurs must have a UK recognised Bachelor’s or Master’s degree or PhD — foundation, honorary degrees, postgraduate certificates, professional or vocational qualifications are simply insufficient. For endorsement from the DIT as part of the elite global graduate entrepreneur programme (Sirius), Graduate Entrepreneurs must also have a degree equal to a UK bachelor’s degree. Either endorsement under the Graduate Entrepreneur route is required to have been issued in the 3 months before the application.

If the start-up visa replaces the Graduate Entrepreneur route, then the degree requirement will be done away with, but the requirement to be endorsed will remain. “Approved business sponsor” sounds as if it includes a potentially broader scope than the Sirius programme.

Graduate Entrepreneurs currently:

• must meet the English language requirement.
• show maintenance of £945 if in the UK, or £1,890 if applying from outside the UK, for 90 days held in their bank account.
• have a visa duration of one year.
• have the opportunity to apply to extend their Graduate Entrepreneur visa for one year further.
• do not have a route to settlement, but have the possibility to switch to a Tier 1 (Entrepreneur) if they have £50,000 to invest in their business.

As of yet, it is unclear if the new UK Startup Visa will involve the other Graduate Entrepreneur requirements and whether it will be a route to settlement for the global talent the Home Secretary says he wants to attract.

New UK Startup Visa vs. Tier 1 (Entrepreneur)

Unless the investment requirement is altered, the startup route won’t be groundbreaking for full-fledged Entrepreneurs, with £50,000 or £200,000, who can meet the English language requirement without an university degree by taking an English test to CEFR level B1.

It is noteworthy that a Tier 1 (Entrepreneur) does not necessarily have to start-up a business – they could also invest into an existing UK business. Unless a misnomer, this may depart from the essence of a “startup” route.

It is not yet clear if there will be any variation in the amount or the source of the funds currently required if it is the Tier 1 (Entrepreneur) £50,000 route that is to be modified. As I discuss in my previous post, the £50,000 must currently come from Department of International Trade (DIT) approved seed funding competitions, registered venture capital firms, or government department funding.

Currently a Tier 1 (Graduate Entrepreneur), who as discussed above, currently must have at least the equivalent of a UK Bachelor’s degree, can switch into the Tier 1 (Entrepreneur) route if the entrepreneur or business has access to £50,000. These funds can have been invested in their business up to 24 months before their application. If the Startup Visa replaces the Tier 1 (Graduate Entrepreneur), it is not yet clear if transition from that route to the Tier 1 (Entrepreneur) route will be facilitated by a lower investment requirement.

Requirements for entrepreneurs such as genuineness of the business and job creation, are notoriously difficult to meet. However, what interests many people is its accelerated 3-year or ordinary 5-year route to settlement. In return for helping the British economy, the entrepreneur who meets the rules receives indefinite leave to remain in the UK. It is still unclear whether the new UK Startup Visa route will provide this incentive to spur innovation.

New UK Startup Visa vs. Tier 1 (Post-study Work)

The Post-Study Work visa has been obsolete since April 2012. The idea behind the route was simple: international graduates from UK universities could remain in the UK with a single grant of two years of leave, applying within 12 months of their graduation. There was no possibility for extending this visa. However, post-study workers were free to seek employment without having a sponsor for the duration of their leave. It was essentially a bridge into other highly skilled routes, such as Tier 2 (General).

The requirements for Post-study work leave were that a Migrant:

• had a degree requirement of a bachelor’s degree, master’s degree, PhD or Graduate Certificate or Diploma including PGCE from a UK Higher Education Institution;
• finished their studies while they had leave to remain in the UK;
• had sufficient funds to maintain themselves without recourse to public funds; and
• met the English language requirement if their degree was not taught in English.

Like the Tier 1 (Graduate Entrepreneur), the Tier 1 (Post-study work) was not a route to settlement.

It is clear that the UK Startup Visa route would run against the grain, rather than replace, the idea of post-study work, which was for UK graduates to remain in the UK and enter the British workforce after graduation. The Startup Visa route seems to be aimed at non-conventionally educated candidates, who are endorsed for their idea, and who want to start their own businesses, which sounds much more aligned to the entrepreneur visa, but potentially without the stringent investment requirements.

Conclusion

Putting aside their differences, all of the above discussed Tier 1 routes permit(ted) sponsorship of dependent family members to come to the UK. Any reasonable new start-up scheme, if wishing to attract talented innovative migrants, must also permit their families to come with them.

It is impossible to predict the form that the new UK Startup Visa route will take, however important points to look out for will include:

• Source of endorsements;
• Whether there is a requirement of availability or investment of funds for the start-up;
• Genuineness tests;
• Job creation Requirements;
• Maintenance Requirements;
• English Requirements; and
• Whether the route leads to settlement.

Contact Our Startup Immigration Barristers

For expert advice and assistance in relation to an application for a Startup Visa, Entrepreneur Visa or Graduate Entrepreneur Visa, contact our team of immigration barristers on 0203 617 9173 or by completing our enquiry form below.