Innovator visa category is for more experienced businesspeople seeking to establish a business in the UK.
Applicants must demonstrate an ‘innovative’, ‘viable’ and ‘scalable’ business idea which is supported by an endorsing body. With some exceptions, applicants are required to have funding of no less than £50,000 to invest in their business. The new Innovator visa category will be open to applicants as of 29th March 2019.
The Tier 1 Entrepreneur visa route is open to applicants only until 28th March 2019. These applicants have to act promptly to submit their applications before the very tight 28th March deadline. This deadline may be challenging for those applicants who planned to rely on their own funding and require more time to keep it in their accounts for the required 90 days. They may need to look into third party funding options to be able to apply by 28th March.
Extension applications for Tier 1 Entrepreneur permit holders will remain open until 5 April 2023 and Settlement applications until 5 April 2025.
Comparison with Tier 1 Entrepreneur visa
The minimum level of funding for the innovator visa is lower than for the standard Tier 1 Entrepreneur visa but there is a requirement for applicant’s business idea to be approved by an endorsing body. The English language level required is B2, which is higher than for the Tier 1 Entrepreneur visa. The other important point is that the applicants must stay in contact with their endorsing bodies. The contact must be at checkpoints of 6 months, 12 months and 24 months. Endorsements can be withdrawn if no contact is made by Innovators at the checkpoints or if the business venture has not made ‘reasonable’ progress and no new business venture that meets the endorsement criteria is pursued by the visa holder. The endorsement criteria at the Settlement stage focus on the growth and success of the business.
Innovator visa category may lead to settlement in the UK after 3 years continuous residence, which is less than the 5 years required for Tier 1 Entrepreneur visa.
Applicants who are already in the UK under certain visa categories can switch to the Innovator visa from inside the UK:
- Tier 1 (Graduate Entrepreneur)
- Tier 1 (Entrepreneur)
- Tier 2
- a visitor who has been undertaking permitted activities as a prospective entrepreneur, as set out in Appendix V
Requirements for Innovator visa
The requirements for the innovator visa are divided into General and Specific. Both General and Specific requirements must be met for the innovator visa to be granted. The initial visa is granted for 3 years. Settlement for the Innovator category requires 3 years continuous residence in the UK.
General requirements for Innovator visa
- The applicant must be at least 18 years old;
- B2 English language ability is required (approved English language test needs to be taken unless an applicant is from a majority English speaking country listed in the immigration rules OR have an university degree from the UK or a foreign university degree that was taught in English and is recognised as equivalent to UK degree by UK Naric);
- The applicant must pass the credibility assessment*;
- Maintenance funds required for the Main Applicant are £945. NOTE: Applicant does not need to provide evidence of maintenance funds if the letter from endorsing body confirms they have been awarded funding of at least £945 in addition to the £50,000 investment funds required.
- There are no general grounds of refusal (e.g. applicant’s criminal record, breach of immigration rules).
- The Home Office must be satisfied that all of the following requirements are met:
- The applicant genuinely intends to undertake, and is capable of undertaking, any work or business activity in the UK stated in their application.
- The applicant does not intend to work in the UK in breach of their conditions.
- Any money which the applicant claims to be available is genuinely available as described, and the applicant intends to use it for the purposes described in the application.
- The Home Office will take into account any endorsement of the applicant required under the rules, and may also take into account any or all of the following factors:
- the evidence the applicant has submitted and its credibility
- the applicant’s previous educational, work and immigration history
- declarations made to other government departments regarding the applicant’s previous employment and other activity in the UK
- any other relevant information
- The Home Office may ask the applicant to attend an interview.
Specific requirements for Innovator visa
All applicants for entry clearance, leave to remain or indefinite leave to remain must have been endorsed in this category by an endorsing body listed on the gov.uk website. The list of endorsing bodies has not yet been published.
The applicant does not need to be the sole founder of the business and may be a member of an entrepreneurial team. If the applicant’s last grant of leave was in the Tier 1 (Graduate Entrepreneur), Start-up or Innovator category, the endorsement does not need to be from the same endorsing body. The endorsing body must not have withdrawn the endorsement by the time the application is considered by the Home Office.
Endorsement can be obtained under ‘new business’ criteria OR ‘same business’ criteria.
An applicant may be endorsed under the “new business” endorsement criteria if either of the following apply:
- The application is an initial application.
- The application is an extension application, and the applicant is pursuing a different business venture from the one that was assessed in the endorsement which led to their previous grant of leave.
An applicant may be endorsed under the “same business” endorsement criteria if both of the following apply:
- The applicant’s last grant of leave was in the Tier 1 (Graduate Entrepreneur), Start-up or Innovator category.
- The applicant is pursuing the same business venture that was assessed in the endorsement which led to that grant of leave.
An applicant may be endorsed under either the “new business” or the “same business” criteria if both of the following apply:
- The applicant’s last grant of leave was in the Tier 1 (Graduate Entrepreneur) or Start-up category.
- The applicant is pursuing the same business venture that was assessed in the endorsement which led to that grant of leave.
Endorsement criteria – new business
The endorsing body must be ‘reasonably satisfied’ that the applicant will spend their entire working time in the UK on developing business ventures AND the applicant’s business idea meets the criteria of innovation, viability and scalability. The Home Office defines the Innovation, Viability and Scalability as follows:
Innovation: The applicant has a genuine, original business plan that meets new or existing market needs and/or creates a competitive advantage.
Viability: The applicant has the necessary skills, knowledge, experience and market awareness to successfully run the business.
Scalability: There is evidence of structured planning and of potential for job creation and growth into national and international markets.
Investment funds – new business
- If the applicant’s endorsement was given under the new business endorsement criteria, at least £50,000 funds must be available to the applicant to invest in their business. This may include funds which have already been invested in the business.
- If the endorsement letter confirms that at least £50,000 funds are available or have been invested in the applicant’s business, no further evidence of investment funds is required.
- If the endorsement letter does not confirm that a full £50,000 funds are available or have been invested, the applicant must provide the specified documentary evidence of funds.
- If the business has one or more other team members who are applying for, or have been granted, leave in the Innovator category, they cannot share the same investment funds. There must be at least £50,000 investment funds available for each Innovator team member. These additional funds are not needed for team members who are resident workers or who have leave under another category of the Immigration Rules, which allows them to engage in business.
- Any funds in a foreign currency will be converted to pounds sterling (£) using the spot exchange rate which appeared on www.oanda.com on the date of application.
- Funds will not be accepted if they are held in a financial institution which the Home Office is unable to make satisfactory verification checks with, as listed in Appendix P of the Immigration Rules.
Endorsement criteria – same business
If the applicant is relying on endorsement under the same business criteria, the endorsement letter must confirm all of the following:
- The applicant has shown significant achievements, judged against the business plan assessed in their previous endorsement.
- The applicant’s business is registered with Companies House and the applicant is listed as a director or member of that business.
- The business is active and trading.
- The business appears to be sustainable for at least the following 12 months, based on its assets and expected income, weighed against its current and planned expenses.
- The applicant has demonstrated an active key role in the day-to-day management and development of the business.
- The endorsing body is reasonably satisfied that the applicant will spend their entire working time in the UK on continuing to develop business ventures.
Endorsement criteria – settlement (Indefinite Leave to Remain)
If the applicant is making a settlement application, the endorsement letter must confirm both of the following:
- The applicant meets all of the same business endorsement criteria set out in paragraphs above;
- The applicant’s business venture meets at least two of the following requirements:
- At least £50,000 has been invested into the business and actively spent furthering the business plan assessed in the applicant’s previous endorsement.
- The number of the business’s customers has at least doubled within the most recent 3 years and is currently higher than the ‘mean number’ of customers for other UK businesses offering comparable main products or services.
- The business has engaged in significant research and development activity and has applied for intellectual property protection in the UK.
- The business has generated a minimum annual gross revenue of £1 million in the last full year covered by its accounts.
- The business is generating a minimum annual gross revenue of £500,000 in the last full year covered by its accounts, with at least £100,000 from exporting overseas.
- The business has created the equivalent of at least 10 full-time jobs for resident workers.
- The business has created the equivalent of at least 5 full-time jobs for resident workers, which have an average salary of at least £25,000 a year (gross pay, excluding any expenses).
- If the applicant is relying on the criteria for creating jobs:
- The jobs must have existed for at least 12 months and comply with all relevant UK legislation, including (but not limited to) the National Minimum Wage Regulations in effect at the time and the Working Time Regulations 1998.
- Each of the jobs must involve an average of at least 30 hours of paid work per week.
Endorsing bodies will have significant responsibilities to monitor the Innovator business activities and keep the Home Office updated.
To qualify as an endorsing body in the innovator visa category, an organisation must meet all of the following requirements:
- The organisation must demonstrate a proven track record of supporting UK entrepreneurs, including resident workers. (Exceptionally this requirement may be waived, for example where a new organisation is set up by another body which has its own track record.)
- The request to become an endorsing body must be supported by a UK or devolved government department as being clearly linked to that department’s policy objectives.
- The organisation must be able to competently assess applicants’ business ventures against the endorsement criteria set out in the immigration rules.
- The organisation must agree to all of the following responsibilities:
- To stay in contact with those they have endorsed at checkpoints 6, 12 and 24 months after their application is granted.
- To inform the Home Office if, at these checkpoints, both of the following apply:
- The individual has not made reasonable progress with their original business venture;
- The individual is not pursuing a new business venture that also meets the endorsement criteria.
- To inform the Home Office if an applicant misses any of these checkpoints without the endorsing body’s authorisation.
- To withdraw its endorsement if either bullet point 2 or bullet point 3 immediately above applies, unless it is aware of exceptional and compelling reasons not to withdraw its endorsement, and informs the Home Office of those reasons.
- To inform the Home Office if it has any reason to believe that an individual it has endorsed is working outside of their own business ventures, in breach of their conditions.
- The organisation must not be connected to past or present abuse of the immigration system.
Kasia Janucik (Senior Associate, Carter Lemon Camerons Solicitors), 12th March 2019
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