News - UK

UK - August 2019

What is replacing the UK’s Tier 1 Entrepreneur visas? Part Two: Innovator Visas

International applicants wanting to start businesses in the UK must use the new Start-up or Innovator visa categories since the Tier 1 (Entrepreneur) visa has been consigned to history. We looked previously at the Start-up category, how family members can be included and the role of endorsing bodies here and below we look at the second new route: the Innovator visa.

Endorsements required from bodies on an approved list

One big change from the UK’s Tier 1 Entrepreneur visa is that it is no longer necessary to have £200,000 to put into the proposed U.K. business. Instead, Innovator visa applicants have a reduced funding requirement of a minimum of £50,000.

In addition to this change, applicants need to persuade one of the U.K. Home Office approved endorsing bodies – a leading business organisation or higher education institution – to issue an endorsement, rather than convincing the Home Office that they have a genuine business plan.

There is a feeling that the Home Office was not fully prepared for the change, and guidance has been recently updated giving more details on these important endorsing bodies.

General requirements for both Start-up and Innovator visas

Both Start-up and Innovator visas need to fulfil the requirements of Part W3 of the Immigration Rules. Part W3 contains the general requirements that applicants need to fulfil under many visa routes if they wish to join a start up, or existing business in the UK.

The general requirements include simple rules like being over 18 years old as well as passing an English language test at upper intermediate (B2) level (or having a degree taught in English, or being a national of an English speaking country). This B2 level is higher than was necessary for the old Entrepreneur route.

Both Start-up and Innovator visa applicants also need to meet a maintenance requirement by showing they have held £945 in savings over a 90-day period before they make their application, although this is not required if the letter of endorsement they obtain from an endorsing body confirms they have been awarded funding of at least £945.

What businesses can support an Innovator visa application?

Like Start-Up visas, Innovator visas can be obtained to work in a business in any sector. The Applicants need not be the only employee in the business – they can both be part of a team, or working on their own.

However, Innovator visa applicants must either be starting a new business or relying on a business they started while they had the permission to be in the U.K. as either an Innovator or Start-up migrant.

Alternative visa routes

If the intention is for the Applicant to join a business that is already trading then it is worth considering the Tier 2 Skilled Worker Visa route as an alternative. So too, if an individual is simply seeking to invest in an existing business trading in the U.K., then the Tier 1 (Investor) category visa may be a more appropriate choice.

The Innovator Category specific requirements

The Innovator category is for more experienced business people seeking to establish a business in the UK. They have to satisfy the same general requirements as Start-up applicants (see Part 1 here) and also need the all-important endorsement from the approved endorsing bodies.

The criteria that are exclusively required of Innovator applicants are set out in Part W6 of the Immigration Rules.

Funding

How the Innovator category requirements differ to the Start-up visa is that applicants will usually need a minimum of £50,000 funding available to invest in their business. This does not have to come from their endorsing body, although some endorsing bodies may choose to also offer funding.

Exclusive employment

Innovators must work entirely on developing their business ventures and may not take on other employment outside their business – another requirement that is not expected of Start-up visa applicants. This includes anything which effectively amounts to employment, such as using their own business to hire out their labour to another employer.

Endorsement

Part W6 talks about the need for Innovator applicants to be endorsed by an organisation that will assess the applicant’s business idea. This is much like the requirement for Start-ups, although the list of potential endorsing bodies for Innovator visa applicants is wider. Obtaining an endorsement will no doubt prove to be the biggest barrier to budding applicants. (see further “The role of endorsing bodies” below)

Three year visas are potentially renewable

Successful Innovators are granted leave for three years at a time and can bring their family members to the UK. After three years, Innovators can apply to extend their stay for a further three years or to settle permanently in the UK. Each of these three stages requires endorsement from an endorsing body.

The role of the endorsing bodies

The Innovator category is for people setting up a new business in the UK. Approved endorsing bodies have to decide if the business will be “innovative”, “viable” and “scalable”, with the ultimate aim that it has the potential to become a fully integrated and contributing part of the UK economy.

Innovator applications for endorsement are, therefore, formally assessed against these three criteria:

  • Innovation - Does the applicant have a genuine, original business plan that meets new or existing market needs and/or creates a competitive advantage?
  • Viability - Does the applicant have, or are they actively developing, the necessary skills, knowledge, experience and market awareness to run the business successfully and do they have sustainable goals?
  • Scalability - Is there evidence of structured planning and of potential for job creation and growth into national markets?

In line with these tests, the Home Office expects successful applicants to display a greater level of skill and experience than in the Start-up category.

At present there is no specific guidance for applicants and the detail above is taken from the guidance to endorsers which can be found here.

Further information

Read our Guide on the new Start Up visa category here

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