Home Office Reveals Plans To Introduce New “Startup Visa”

18 Jun 2018, 05 mins ago

The Home Office revealed during London Tech Week plans to introduce a new “startup visa”, which it said would begin welcoming people to the UK without a university education and improve the application process.

The new visa is said to replace the Tier 1 (Graduate Entrepreneur) visa route, which was exclusively for graduates. This could mean that foreign entrepreneurs could find it easier to come to the UK to set up businesses, although the Home Office was unable to say how many more people would arrive due to this new policy.

In order to apply for an endorsement, applicants will no longer be required to be recent graduates who have left university within the last two years. Additionally, the group of entities which can endorse an applicant with a business proposal will be expanded from approved Higher Education Institutions and the government’s own entrepreneur program to “approved business sponsor(s), including accelerators”.

Should this route go ahead, this would mark a further move by the Home Office towards the greater use of third-party endorsements in the immigration system, which is currently the model being used for Tier 1 (Exceptional Talent) visas.

Unlike the Tier 1 (Entrepreneur) visa, the Tier 1 (Graduate Entrepreneur) visa, as it stands now, does not require an applicant to evidence that they have available funding to invest in their proposed business project or meet any job creation requirements after the visa has been granted. So far, the announcements on this proposed new route have not made any mention of changes to these requirements, although it has been suggested that the “approved business sponsors” should have to invest a certain amount of money into the startup, usually in exchange for equity in the business “to ensure that they are suitably incentivized to select only high potential entrepreneurs”.

However, doubt has already been cast on whether more people would indeed benefit as a result of the changes, as the problem with entrepreneurs seeking Entry Clearance to the UK normally lies not with satisfying the educational requirement, but rather the £200,000 investment and/or the “genuine entrepreneur” test.

The refusal rate under the Tier 1 (Entrepreneur) route is up to 50%, and the problem with the Tier 1 (Graduate Entrepreneur) visa is that few people actually choose to enter the UK through this route. There have been fewer than 900 applications in the past five years since the route opened, which is far below the cap the government initially introduced of 2,000 per year. However, unlike the Tier 1 (Entrepreneur) route, the average refusal rate for graduate entrepreneurs after they have received endorsement is up to 5%.

While the Home Office is currently unable to give an estimate of how many more people would arrive in the UK under the new proposals, they confirmed the cap would remain in place, although any additional applications granted under the new system would not count towards the total.

The Home Office could not immediately say how the new visa route would make the visa process faster or smoother, but it is set to launch in Spring 2019 and further details will be announced in due course.

Gherson has extensive experience with Tier 1 (Entrepreneur) and Tier 1 (Graduate Entrepreneur) application. Should you wish to discuss the options available to you, please do not hesitate to contact us.


The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

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