Tier 1 (entrepreneur) and sole representatives – understanding your immigration options

Posted: 21/05/2013

The UK holds great opportunities for migrant entrepreneurs and businesspeople. Leslie Sarma examines two possible avenues to bringing your business to the UK.

Tier 1 (entrepreneur)

This category is for those investing in the UK by setting up, or taking over, and being actively involved in the running of one or more businesses in the UK. Applicants can apply on their own, or as part of an entrepreneur team of two people. Applicants from outside the UK will need to show (amongst other things):

• they have access to funds of no less than £200,000 (or £50,000 if the money comes from an FSA regulated VC firm, a UKTI endorsed seed funding competition or a UK government department for the purpose of establishing or expanding a UK business);
• the funds are held in a regulated financial institution and disposable in the UK;
• English language ability; and
• ability to maintain themselves (and any dependants) once they’re in the UK.

 Once in the UK, a Tier 1 (entrepreneur) migrant is limited to work in the business(es) in which they’ve invested. If they wish to extend their leave to remain in the UK in this category, they’ll need to prove (amongst other things) that the investment was actually made, that they registered as required and, significantly, that their inward investment resulted in creation of at least two full time jobs within the business for resident workers. There’s no prohibition on multiple Tier 1 (entrepreneurs) investing in one business, but they’d each need to meet the requirements for extension, including job creation. If the business wished to sponsor non-investing migrant employees, a sponsor licence would be required.

Advantages

Perhaps the biggest benefit of this category is the possibility of what’s known as 'accelerated settlement'. Generally, migrant workers in the UK must wait a period of five years before they are eligible to 'settle' in the UK (also known as indefinite leave to remain).

Tier 1 (entrepreneur) migrants, however, may accelerate this time frame and apply for settlement in as little as three years if they are able to meet an increased job creation requirement or demonstrate that their business has had an income from business of at least £5M. For ambitious entrepreneurs, this category presents a fast track to long term residence, and business growth, in the UK.

Sole representatives of an overseas business

This is a non-investment category allowing an individual representative (or 'sole rep') of an existing overseas business to enter the UK to establish and operate a registered branch or wholly-owned subsidiary of that business in the UK. In order to gain entry in this category the sole rep and their overseas employer will need to demonstrate (amongst other things) that:

• the overseas business’ headquarters are outside of the UK and, prior to the arrival in the UK of the designated sole rep, the business has no other branch, subsidiary or representative in the UK;
• the UK branch or subsidiary will operate in the same type of business activity as the overseas business;
• the sole rep was recruited and employed outside of the UK and is a senior level employee of the overseas company with full authority to take operational decisions on behalf of the overseas business for the purpose of representing it in the UK;
• the sole rep’s English language ability; and
• the sole rep’s ability to maintain themselves (and any dependants) once they’re in the UK.

 Once in the UK, the sole rep will be limited to working within the UK branch of the overseas business. Sole reps are eligible for extension and, ultimately, settlement in the UK, but only after five years and only if the conditions of their initial entry remain the same – specifically, if a superior has been put in place in the UK entity, the sole rep will not be able to extend their leave. Finally, by definition, there can only be one 'sole' rep per company, so if the UK entity wishes to bring further migrants over to the UK for employment, they will likely be required to apply for a sponsor licence.

Advantages

The key advantage to the sole rep route is that no individual investment is required; in fact, the sole rep must not be a majority shareholder in the business. Further, there are no specific job creation requirements, so the business can grow at its own pace (or remain small). For an existing overseas business looking to move into the UK quickly, and with minimal risk, this can be a promising option.

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