Immigration and the tech talent gap Image

Immigration and the tech talent gap

Posted: 07/02/2014

It is clear that 2014 is going to be a big year for the tech sector in London and across the UK. The recent Tech City UK annual report said that the sector is booming, with the number of tech/digital companies in London increasing by over 75% between 2009 and 2012, the arrival of several global players into the east London area and the birth of many exciting startups.

What is also clear is that a substantial influx of new talent is required to meet the needs of the growing sector and that, for the foreseeable future, some of this talent must come from outside the UK.

Tech London Advocates is working to find solutions to the tech talent shortage and working groups have been set up to examine both the skills required for today’s tech workforce and immigration policy. While there is still work to be done, there are several options within existing immigration policy that can help.

The tier 1 entrepreneur category allows migrants wishing to either establish a new business or join an existing business to enter or remain in the UK to do so.

Among other things, applicants must demonstrate that they have £200,000 in funds available to them for investment in their businesses.

This funding requirement drops to £50,000 if the funds come from certain specified sources, such as registered venture capital firms or if the applicant is already in the UK as a tier 1 (post-study work) or tier 1 (graduate entrepreneur) migrant. Applicants must also pass a “genuineness” test in relation to the availability of funds and their intentions to set up the business.

Once here, tier 1 entrepreneurs must invest the funds into their businesses and meet job creation requirements if they wish to stay. This remains a popular route for founders and entrepreneurs looking to start and grow businesses in the UK.

Migrants who are in the UK studying at higher education institutions may also wish to consider the tier 1 (graduate entrepreneur) route. This allows recent graduates from certain institutions to remain in the UK to pursue business ventures. There is no funding requirement here, but applicants will need to obtain sponsorship from their educational institution in order to participate.

A further benefit of this category is that tier 1 (graduate entrepreneurs) who subsequently wish to move into the full tier 1 (entrepreneur) category need only meet a reduced funds requirement of £50,000.

Within this category is the UKTI’s Sirius programme, which allows certain graduates of overseas institutions to enter the UK to pursue business ventures. More information can be found about this programme on the UKTI website.

Tier 2 sponsorship allows skilled workers to enter or remain in the UK to undertake specific jobs with specific employers. All employers wishing to sponsor tier 2 migrants must first obtain a sponsor licence to do so and, prior to offering a role to a migrant for sponsorship, must determine that the role is sufficiently skilled and appropriately remunerated. In many cases, they will also need to canvas the UK/EU marketplace in advance to ensure that no suitable resident worker is available to fill the role.

We are advised that the Home Office is working to reduce review times on sponsor licence applications but this category can nonetheless be expensive and burdensome to work with, particularly for smaller companies and startups. In an effort to combat this, the Home Office (in conjunction with the Greater London Authority) is piloting a help desk, specifically to address questions and concerns raised by SMEs. We encourage SMEs and startups to take advantage of this service. More information about the helpdesk.

In December 2013, the government announced plans to extend the existing tier 1 (exceptional talent) route to the tech sector. Right now this category of tier 1 visas are granted to individuals demonstrating exceptional talent (or exceptional promise) in the fields of the arts or sciences. A portion of these visas has now been earmarked for the tech sector to use to bring the best and the brightest into the UK.

This new visa will be a great opportunity for founders and entrepreneurs looking to come to the UK, although we are aware that a limited number of visas will be available. We anticipate that more information about this new sub-category, including policy guidance, will be released this spring and that the sub-category will come into effect from April.

This article was published in TechCityInsider in February 2014.

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