24 Oct 2016, 43 mins ago

Tier 1 (Entrepreneur) route has evolved substantially since it was first introduced in 2008. The route is for individuals who wish to invest in the UK, by establishing or taking over, and being actively involved in the running of, a business or businesses in the UK. The applicants who apply under the Tier 1 (Entrepreneur) category must demonstrate that they have access to £200,000, which they will invest in a business or businesses in the UK. Applicants can form an entrepreneurial team with one other Tier 1 (Entrepreneur) applicant and share the same investment funds. There is also a category with a lower threshold of £50,000 available to applicants who secured this funding from one or more registered venture capital firms regulated by the Financial Services Authority (FSA) or one or more UK entrepreneurial seed funding competitions which is listed as endorsed on the UK Trade and Investment (UKTI) website, or one or more UK Government Departments or Devolved Government Departments in Scotland, Wales or Northern Ireland, and which is made available for the specific purpose of establishing or expanding a UK business.

The requirements of the route became stricter over time with additional requirements or changes to the route being introduced almost every year or, on occasions, several times a year with the last changes coming into effect on 6 April 2015. Despite tightening the requirements of the route it is becoming more and more popular with migrants, possibly as other routes, such as Tier 1 (General) and Tier 1 (Post Study Work), for example, are closing. This is evident from the Home Office Immigration Statistics:

· in 2009 there were only 298 Tier 1 (Entrepreneur) entry clearances granted (118 of these being main applicants),

· in 2014 there were 3,354 Tier 1 (Entrepreneur) entry clearances granted (1,089 of these being main applicants).

In March 2015 the Government asked the Migration Advisory Committee (MAC) yet again to review the Entrepreneur routes to ensure that the potential economic benefit of the routes is maximised. The MAC is also considering “the attractiveness of the routes to genuine entrepreneurs”.

In particular the MAC is asked to consider whether the existing design of the Tier 1 (Entrepreneur) route is appropriate to deliver significant economic benefits for the UK and whether:

“a) the initial eligibility criterion of access to funds is a sufficient determinant of entrepreneurial ability and whether other criteria, for example, assessment of previous entrepreneurial activity and/or testing the purpose of the investment, should be applied;

b) the existing eligibility and extension criteria are aligned sufficiently with entrepreneurial and early stage business life-cycles, including consideration of the role angel investors and crowd-funding can play;

c) the route utilises international best practice. As part of this, the MAC is requested to consider route design and incentives to ensure competitiveness.”

It would seem from the issues that MAC is considering that they envisage a significant overhaul of this category.

The consultation is open until 12am on 12 June 2015 and any interested party may submit their views to MAC before it is closed. The MAC should report on its findings to the Government by the end of September 2015. Following the report and MAC’s recommendations we are likely to see some changes to the route probably in late 2015 or beginning of 2016.