New restrictions placed on Tier 1 (Entrepreneur) visa category

IMPACT – LOW

What is the change? The U.K. is tightening its rules on Tier 1 (Entrepreneur) visas to crack down on abuse.

What does the change mean? Tier 4 (Student) and Tier 1 (Post Study Work) visa holders will now be restricted from switching in-country into Tier 1 (Entrepreneur).

• Implementation timeframe:July 11.
• Visas/permits affected: Tier 1 (Entrepreneur).
• Who is affected: Those looking to switch into Tier 1 (Entrepreneur) status in the U.K.
• Impact on processing times: None.
• Business impact: The new rules will have a minor business impact, as Tier 1 (Entrepreneur) is not used by employees but by those looking to set up or run their own business. In addition, contractors may also be impacted by this change.

Background: The new restriction was published today in a statement of changes in immigration rules after an initial investigation found that tax records of those granted leave as entrepreneurs did not evidence genuine entrepreneurial activity and showed that a significant number took up employment in violation of the conditions of their status.

Despite the new restriction and ongoing fraud investigation, the Tier 1 (Entrepreneur) category remains open. Those who already have leave in the category will continue to be able to extend their stay. The new restrictions will not apply to those qualifying on the basis of seed funding or funding provided by another government department. In the case of those switching from the Tier 1 (Post Study Work) route, the restriction will not apply to those who have already established genuine businesses. Those who graduate in the U.K. will continue to be able to apply to extend their stay under the Tier 1 (Graduate Entrepreneur) category, which is significantly undersubscribed. Entrepreneurs with genuine intentions of establishing businesses in the U.K. will also continue to be able to apply from overseas.

BAL Analysis: There has been an increase in the use of the Tier 1 (Entrepreneur) route, in some cases to avoid some of the strictures of other points-based system categories. These changes amount to a tightening of the scheme and are in the best interests of genuine business by preventing abuses.

This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@bal.com.

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