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A new ‘start-up’ visa – third party sponsorship for entrepreneurs

Posted: 13/06/2018

London Tech Week 2018 (#LTW) is under way and the capital’s tech community has been out in full force to showcase the UK as a leading global tech hub. Many in the tech community were both surprised and excited by today’s announcement from the home secretary setting out proposals for a ‘start-up visa’. The Home Office says the new route will cater for those who want to set up their own business in the UK. It will replace the Tier 1 Graduate Entrepreneur route which was exclusively for graduates, and will make the visa process faster and smoother for entrepreneurs coming to the UK.

Pat Saini, Penningtons Manches’ head of immigration and chair of the Tech London Advocates (TLA) immigration working group, has been a leading figure amongst those making the case for this type of visa. Here, she outlines some key background points leading up to today’s announcement and explains what approach the Home Office needs to take to make sure the start-up visa remains ‘fit for purpose’.

“During London Tech Week, I am often asked to comment on the immigration options for tech companies and tech entrepreneurs and review which immigration routes work and which ones don’t. I have often been quoted as lobbying for ‘fit for purpose’ visas for the tech sector.

“Back in 2014 my colleague Leslie Sarma and I, on behalf of TLA, put forward a proposal to the Home Office, which centred around endorsements by third parties. Our research at the time showed that tech entrepreneurs were faced with many obstacles when applying under the existing visa routes. We proposed that the Government should allow accelerators to endorse visas. This proposal was later welcomed and acknowledged by the Migration Advisory Committee (MAC).

“In 2015 the Government instructed the MAC to review the Tier 1 entrepreneur visa route and propose changes. In a joint response from Penningtons Manches and TLA, we submitted the following evidence:

  • tech entrepreneurs can be deterred from using this category for initial visa applications due to the high refusal rate, mainly caused by inconsistent decision making processes and rules which are complicated and can be seen as out of touch with tech business needs;
  • 90% of experts surveyed believed that an endorsement from a VC or accelerator could act as a key predictor for business success;
  • such endorsements should form part of a start-up visa allowing entrepreneurs to set up businesses in the UK.

“At the end of London Tech Week last year, Penningtons Manches and TLA called for the Government to review the MAC’s recommendations and take forward changes without further delay including our recommendation for experts to endorse business ideas and the introduction of a start-up visa. TLA provided many examples of accelerators in particular which invested a great deal of time and money in early stage businesses and should be trusted to endorse entrepreneurs for visa purposes.

“Therefore, the announcement today that start-up visas will be available from Spring 2019 and that they will allow universities, and approved business sponsors, including accelerators, to endorse talented entrepreneurs, is welcome and encouraging.

“The existing Tier 1 entrepreneur route due to its high refusal rate and strict requirements meant that the UK effectively had no viable visa option for entrepreneurs. This new route will allow the UK to compete with other countries which have, particularly since the referendum result, been wooing entrepreneurs and start-ups.

“The details of the new visa route are yet to be published and whilst this remains very positive news to entrepreneurs, the Home Office needs to make sure that due consideration is given to the requirements and that the visa process is properly managed. In particular, it must not repeat the mistakes made with the Tier 1 General and Tier 1 PSW work routes. These routes were not adequately managed, which resulted in their closure.

“When looking at partners to provide third party endorsement, there should be an emphasis on reliability and robustness, with adequate scrutiny and monitoring agreed with them in advance to guard against abuse. This will ensure that the route remains available and the visa does the job it was designed to do.

“Finally, entrepreneurs who come to the UK need to grow those businesses in order to compete on a global platform. As a business grows, it may need to hire international staff and will need to look at obtaining a sponsor license and using the Tier 2 route. It is therefore now time for the Government to look at the Tier 2 cap and make that ‘fit for purpose’ too.”

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Penningtons Manches Cooper LLP

Penningtons Manches Cooper LLP is a limited liability partnership registered in England and Wales with registered number OC311575 and is authorised and regulated by the Solicitors Regulation Authority under number 419867.

Penningtons Manches Cooper LLP