Personal Immigration

Changes to the Tier 1 (Entrepreneur) category from 13 December 2012

In its most recent Statement of Changes to the Immigration Rules, the UK government has announced important planned changes to the Tier 1 (Entrepreneur) category of the points-based system. The changes were laid before Parliament on 22 November 2012 and will come into force on 13 December 2012.

Switching from Tier 4 (General) student to Tier 1 (Entrepreneur)  

From 13 December 2012, it will no longer be possible for Tier 4 (General) students to switch in-country into the Tier 1 (Entrepreneur) category on the basis of having access to at least £200,000 in investment funds. 

Although it will still be possible to switch from the Tier 4 (General) student category into the Tier 1 (Entrepreneur) category on the basis of having at least £50,000 funding from a specified source (registered venture capital firms, UK Government or Devolved Administration Departments and listed seed funding competitions), overaseas students who are unable to access such funding but who wish to set up a business in the UK will essentially be presented with two options:

  1. Apply to switch in-country into the Tier 1 (Graduate Entrepreneur) category; or
  2. Leave the UK and apply from overseas for entry clearance to the United Kingdom in the Tier 1 (Entrepreneur) category on the basis of having access to at least £200,000 investment funds.

If you currently have leave to remain as a Tier 4 (General) student and your aim is to apply in-country to switch into the Tier 1 (Entrepreneur) category on the basis of having access to at least £200,000 to invest in a UK business, we therefore strongly advise that you prepare and submit your application before the window of opportunity closes on 13 December 2012.

English language

On 13 December 2012 the English language requirement for the Tier 1 (Entrepreneur) category is being lowered from CEFR Level C1 (IELTS 7.0 – 8.0) to CEFR Level B1 (IELTS 4.0 – 5.0).  This change will apply to both entry clearance and leave to remain applications.  This welcome development is being introduced in response to concerns that the former high requirement was a possible deterrent to potentially successful entrepreneurs.

If you have been unable to satisfy the English language requirement for entry clearance or leave to remain as a Tier 1 (Entrepreneur) migrant in the past, you may therefore wish to reconsider applying on or after 13 December 2012 on the basis of the new, less onerous, English language requirement that will apply from this date.

Switching from Tier 1 (Post-study worker) to Tier 1 (Entrepreneur)

If you are currently holding leave to remain as a Tier 1 (Post-study work) Migrant, you can still switch to the Tier 1 (Entrepreneur) category, on the basis of having access to £50,000 to invest in a UK business, being registered as a self-employed or as the director a business, and being engaged in business activity, other than in the work necessary to administer your business, in an occupation at National Qualifications Framework level 4 or above, on a date within the three months immediately prior to the date of application. However, in a further welcome move, the amendments to the Immigration Rules that are coming into force on 13 December 2012 will clarify exactly how the requirement to be working in an occupation at NQF level 4 is being interpreted by the UKBA when considering applications from Tier 1 (Post-Study Work) migrants to switch into Tier 1 (Entrepreneur) category.

Investment funds

Finally, the 13 December 2012 amendments to the Immigration Rules will introduce a requirement that an applicant for entry clearance or leave to remain as a Tier 1 (Entrepreneur) migrant on the basis of having access to at least £200,000 must demonstrate that their investment funds are held in a financial institution that is approved by the UK Border Agency.  We anticipate that this development will not present any problem for most of our clients, but as with all aspects of the Immigration Rules, compliance with this new requirement will need to be checked carefully in all cases.

Further details of the above amendments to the Tier 1 (Entrepreneur) category will be available once the changes to the relevant Immigration Rules come into force on 13 December 2012.

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