The investment funds requirement for initial Tier 1 Entrepreneur applications
One of the main requirements to be satisfied as part of an initial application for entry clearance or leave to remain as a Tier 1 Entrepreneur is to demonstrate that the applicant has the required level of funds to invest in a new or existing business in the UK.
An applicant will be required to score a total of 75 points for attributes under Appendix A of the Immigration Rules. This is achieved by providing specified evidence to demonstrate that the applicant has access to either £50,000 or £200,000. There are different requirements depending on the amount of investment funds relied upon in the application.
Access to investment funds = 25 points
Where the applicant is seeking to rely on £50,000, the Immigration Rules state that the investment funds must be made available from a particular source:
- A registered venture capital firm which is regulated by the Financial Conduct Authority;
- A seed funding competition that is listed as endorsed on the UK Trade and Investment website;
- A UK government department for the specific purpose of establishing or expanding a UK business; or
- The applicant’s own funds where they are applying for leave to remain in the UK and have, or were last granted, leave to remain as a Tier 1 (General) Migrant or as a Tier 1 (Post Study Work) Migrant – if applying on this basis very particular requirements must be satisfied.
Alternatively, the applicant can rely on £200,000 of their own personal wealth to support the application.
The investment funds can be money belonging to the applicant and/or their entrepreneurial team member which is available to make a fresh investment into a new or existing business.
In addition to, or instead of, money belonging to the applicant and/or their entrepreneurial team member, an applicant can rely in whole or in part on investment funds that have been made available by third parties, such as family members.
If relying on funding by third parties, a valid declaration must be provided from each person who is making the investment funds available. The third party will need to confirm that the funds are available to the applicant and the entrepreneurial team member or to the business until such time as the funds are invested into the business.
It is possible to rely on funds that have already been invested into a UK business, whether the investment has been made in full or in part, provided that the investment was made within 12 calendar months before the date of the application. Any investment made outside this 12 month window will not be counted (unless the applicant was last granted leave as a Tier 1 Graduate Entrepreneur in which case they can rely on an investment made within the last 24 months).
The amount of any previous investment must not include the value of any residential accommodation, property development or property management or be in the form of a director’s loan (unless it is unsecured and subordinated in favour of third-party creditors). If the applicant has bought property for their business which includes residential accommodation then the value of this part of the property will not be counted towards the investment funds requirement.
Provided that the specified evidence included with the application demonstrates access to either £50,000 or £200,000 then 25 points should be awarded.
Funds held in a regulated financial institution = 25 points
The investment funds must be held in one or more financial institutions, such as a bank or building society, which is regulated by the appropriate regulatory body in the country in which the financial institution is operating. For example, in the UK the relevant regulatory bodies are the Financial Conduct Authority (the ‘FCA’) and the Prudential Regulation Authority (the ‘PRA’).
There are certain financial institutions which do not verify financial statements to the satisfaction of the Home Office and these are listed within Appendix P of the Immigration Rules.
Disposable in the UK = 25 points
The final 25 points will be awarded where the investment funds are disposable in the UK.
If the application is being made from within the UK then the investment funds must be held in the UK.
Where the investment funds are held overseas the investment funds must be freely transferable and disposable in the UK.
If the application is successful then leave will be granted for 3 years and 4 months (for entry clearance applications made overseas) or for 3 years (for leave to remain applications made within the UK). The full amount of the investment funds must be shown to have been invested into the applicant’s business within the initial grant of leave.
Contact Our Immigration Barristers
If you would like further advice on making an application as a Tier 1 Entrepreneur then please contact our immigration barristers and lawyers in London on 0203 617 9173 or via our online enquiry form.