How to Secure a Sponsor Licence for your Startup

According to Companies House data, the first quarter of 2024 started off strong for start-ups in the UK. There was a 10% increase in new businesses registered over the same period the previous year, pointing towards continued growth in the population of entrepreneurs despite challenging economic conditions. With a continued skills shortage, businesses are increasingly looking beyond our border for top talent. How does a start-up obtain a licence to hire talent from abroad? 

An international labour market

According to the ONS, nearly one third of UK businesses are experiencing a labour shortage. The number of available workers has declined significantly and the Federation of Small Businesses has found that 80% of small firms faced issues when trying to recruit applicants with the depth and range of skills necessary to meet business needs in an increasingly competitive market. This is further compounded by market conditions, which are negatively impacted by international shocks from globally high energy prices, rising borrowing costs, higher interest rates and destabilising cross-border conflicts.

To address the effects of a skills shortage in the UK, many startups look abroad to secure the talent necessary to allow their new venture to succeed. To do so, they will need a Sponsor Licence. For more detail on what obtaining a Sponsor Licence involves, read on.

What is a Sponsor Licence?

A Sponsor Licence enables employers to hire employees from jurisdictions outside the UK, including the EU, and covers unpaid work, such as charitable activity.

Are there any exceptions?

Yes. There are some exceptions due to agreements between the UK and relevant countries. To find out more detail on whether you would qualify for an exemption, you should speak to an immigration solicitor.

What steps are involved?

1. Check if your startup is eligible for a Sponsor License.
2. Check if the role that you want to hire for is suitable for sponsorship.
3. Choose the type of licence that you want to apply for, which will largely depend on the prospective role that you are hiring for.
4. Decide within your startup, who will have responsibility for managing sponsorship.
5. Apply online (20-30 mins) and pay the relevant fee.

How do I know if I am eligible?

Any startup that wants to hire staff from outside of the UK must meet certain conditions that reflect well on your record as a business and employer.

First, you must not have any unspent criminal convictions in your ranks, especially related to immigration offences, or other serious crimes, including fraudulent conduct or money laundering. Second, as an employer, you must not have had your Sponsor Licence revoked in the last 12 months.

You will also likely have to prove to the Home Office that you have the appropriate systems, even as a startup, in place to monitor any workers that you do hire from outside the UK, the staff necessary to manage sponsorship and a record demonstrating trustworthiness and the capability to maintain your relevant duties as it applies to a Sponsor Licence.

Is your advertised role suitable for sponsorship?  

In a bid to maintain a highly skilled workforce, Immigration Rules in the UK have evolved over time so that the roles that you, as a startup, can be a sponsor for must meet a certain threshold to be eligible.

This means, for example, that the role will need to comply with the UK minimum wage and working time regulations too. Different regulations and criteria apply depending on the role. For example, for Skilled Worker visa workers, the general salary threshold will vary but for most occupations, it will be £38,700 per annum For a Scale-up Worker visa worker, the general salary threshold is £36,300.00 per annum.

Gherson has experienced advisers who can help you navigate the relevant requirements for the role(s) you seek to fill for your startup.

 What type of licence will I need?

There are multiple types of Sponsor Licences that apply differently depending on your position as a startup and what kind of worker you want to fill your vacancies. For example, temporary workers who are needed for limited, fixed or short-term contracts, or workers for skilled and typically long-term employment:

1.     Temporary Worker licence:

• This enables you to employ people on a temporary basis, for volunteering, job-shadowing and other roles which do not require long-term or permanent contracts.

2.     Worker licence:

• This kind of licence is more flexible and usually more directly applicable to startups as it enables you to employ skilled workers for short-term, long-term or permanent roles depending on your business needs. However, this excludes certain roles which might also be applicable for a growing startup, such as Scale-Up Worker, which applies to people who come to work in the UK to support fast-growing businesses.

Who will manage sponsorship? 

Within any startup, you will need to appoint people, institute systems and implement instructions for how you will manage both the sponsorship process and the sponsored workers that you employ. Typically, this involves three main core roles: an authorising officer, a key contact and a level 1 user.

The staff allocated for these roles will also have to undergo suitability checks, for example, they should not have any unspent criminal convictions or have been fined by the UKVI in the past 12 months.

There are further requirements, such as being based in the UK most of the time, or not being subject to a bankruptcy restriction order or undertaking. Gherson can assist you with assessing how you might meet these requirements as a startup business.

Apply for your Sponsor Licence

The last step is to complete an application, which will involve the submission of various documents in support of your application and payment of licence fees.

How Gherson can assist

Gherson’s Immigration Team are highly experienced in advising on UK Sponsor Licenses. If you have any questions arising from this blog, please do not hesitate to contact us for advice, or send us an e-mail. Don’t forget to follow us on X, Facebook, Instagram, or LinkedIn to stay-up-to-date.

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 do not 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.

©Gherson 2024

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