Start-up & Innovator Visas: What Is a Good Business Idea?
In order to qualify for a UK Start-up or Innovator visa you will need to have a business idea that is innovative, viable and scalable. This is initially required at the endorsement stage; a letter of endorsement from an approved endorsing body which confirms this is required to apply for the visa. Once you receive an endorsement you must apply for the visa within 3 months. See our earlier blog post here for more details on the different endorsing bodies you can apply to.
The Home Office will also assess these 3 factors at the visa application stage and may not award the necessary points if they are not satisfied that your business plan meets the requirements. If they think they need more information to decide, they may request this from you; you should demonstrate detailed market research. Appendix Innovator and Appendix Start-up do not provide detailed definitions for each factor. However, they do include four further provisions which the business must meet that can be used as guidance to prove the requirements are met.
What Makes a Start-up or Innovator Visa Business Idea Innovative?
According to the Immigration Rules:
“(a) the applicant must have a genuine, original business plan that meets new or existing market needs and/or creates a competitive advantage”
The business must be bringing a new idea to the UK. This could be in the form of an entirely new product or service that does not exist in the UK market, or it could be a new approach to a pre-existing product or service e.g. to do with new technology or data collection, which would give the business a competitive edge. You should be able to clearly explain why your idea is different from any similar businesses that already exist.
In most cases, when a person applies in these categories for the first time, they should be forming a new business. If the business is already registered with Companies House, it should not have already started trading. The only exception to this is where an individual has previously been granted permission in the Start-up category and now wishes to switch to the Innovator route – in this case different rules will apply. The business must be original, therefore you must have either generated the idea yourself, or made a significant contribution to it as an instrumental member of the founding team. You must not apply on the basis of someone else’s idea and should not ask someone to provide you with an idea if you do not have one yourself. If you are working with another person who has contributed to the development of the business idea, they may be eligible to apply for a visa as your team member.
What Makes a Start-up or Innovator Visa Business Idea Viable?
According to the Immigration Rules:
“(b) the applicant’s business plan must be realistic and achievable based on the applicant’s available resources;”
Those applying for Start-up endorsement are not required to have any investment funds at all, while Innovators are each required to show access to at least £50,000 in order to make the application.
However, the endorsing bodies may assess your business as needing more investment funds to become viable, for example, if there will be a need for expensive machinery or a large number of staff before the business will break even. The amount needed will depend on your financial forecasts. The investment funds can be held outside of the UK, but will be converted to GBP on the date of application, and you may need to provide a letter confirming that the funds are held in a regulated financial institution, and they are transferable to the UK.
The Immigration Rules continue:
“(c) the applicant must have, or be actively developing, the necessary skills, knowledge, experience and market awareness to successfully run the business;”
The viability assessment focuses on whether you are the correct person to run the business. You do not need prior experience of running a business in the same field or at all, but you should be able to demonstrate that you have the necessary skills to run your intended business. This could be general management experience, or skills you have acquired from courses and qualifications or previous employment in a similar business.
What Makes a Start-up or Innovator Visa Business Idea Scalable?
It should be noted that this requirement differs slightly between the Start-up and Innovator routes. This is likely because the maximum period of leave to remain in the UK that can be issued on a Start-up visa is only 2 years and does not lead to settlement, whereas an Innovator will be granted up to 3 years’ permission to be in the UK with the possibility of settlement.
For the Start-up route, the Immigration Rules provide:
“(d) there is evidence of structured planning and of potential for job creation and growth into national markets.”
Comparatively, for the Innovator route, the rules stipulate that there must be evidence for growth into national and international markets.
You should include information of your possible growth in terms of location and customer bases, as well as how you plan to achieve this e.g. through marketing strategies and financial forecasting. You should aim to show that there are possibilities for expansion beyond the next few years, especially if you are hoping to use a Start-up business to switch into the Innovator route.
Scalability is also particularly important when thinking about settlement on the Innovator route. In order to be eligible after 3 years, your business must have met at least two of the following requirements:
- At least £50,000 has been invested into the business; or
- The number of customers has at least doubled in the most recent three years and is higher than the mean number of customers for other UK businesses offering comparable main products or services; or
- The business has applied for intellectual property protection in the UK; or
- The business has generated a minimum annual gross revenue of £1 million in the last full accounting year; or
- The business had a minimum annual gross revenue of £500,000 in the last full accounting year, with at least £100,000 from exporting overseas; or
- The business created the equivalent of at least 10 full-time jobs for settled workers; or
- The business has created the equivalent of at least 5 full-time jobs for settled workers, each of which has a mean salary of at least £25,000 a year gross pay.
Contact our Immigration Barristers
Our immigration barristers can provide expert advice and assistance regarding applications for the initial endorsement stage as well as the visa application for a UK Start-up Visa or UK Innovator Visa. Please contact our immigration barristers on 0203 617 9173 or complete our enquiry form below.