The start up visa category was introduced on 29 March 2019 and is a visa route for entrepreneurs looking to set up a business in the UK for the first time. It replaces the Tier 1 Graduate Entrepreneur visa and can also be used in place of the now-closed Tier 1 Entrepreneur route (as can the Innovator visa which we will take a look at separately).
To be eligible for a start up visa, an individual needs a letter of endorsement from an endorsing body, proof of English skills, and proof of maintenance funds. There is no requirement for any investment funds to be available to the business.
The good news
There are more endorsing bodies than just Universities and the route is open to anyone, not just graduates. The list of endorsing bodies is available here and hopefully more bodies will be added over time.
This is a useful route for those individuals with business ideas who haven’t yet received funding for their business. This avoids the complicated evidence requirements that were in place for Tier 1 Entrepreneur visas and opens the route to more people at an earlier stage of their business development.
The route allows for individuals to switch into the Investor visa once they have sufficient funding and provided they can obtain further endorsement. This can then eventually lead to settlement, though the Start Up visa itself does not allow this.
The test of whether the business idea is “genuine and credible” (as for Tier 1 Entrepreneur applications) is removed and instead the decision of whether a business is credible lies with the endorsing body using the guidance that a business idea must be innovative, scalable, and viable. This means the people assessing the credibility of the business idea will be those with experience in the start up world and not immigration caseworkers. A credibility check by a caseworker will only be where there are other reasons to suspect an individual’s credibility.
Finally, the maintenance requirements for those seeking leave to enter with this visa is reduced to £945, compared to £1,890 on the Graduate Entrepreneur visa and £3,310 on the Entrepreneur visa.
Things to consider
Endorsing bodies are able to set their own criteria and process for endorsement which means individuals will have to do a lot of research to find the most appropriate endorsing body for their business plan. This could make the process quite confusing and potentially less accessible for those applicants outside the UK. It will be interesting to see what promotion of the endorsements will be done by the endorsing bodies for applicants outside the UK.
One of the criteria by which endorsing bodies have to assess applicants is that the business idea must be “innovative” which is described as “a genuine, original business plan that meets new or existing market needs and/or creates a competitive advantage”. Endorsing bodies are free to have their own measures of what comprises an “innovative” business plan but guidance suggests that this could be something which meets a need not already fulfilled in the UK market or bringing something new to the UK market. This seems to sway the balance towards individuals already in the UK.
The level of English language ability is increased under this visa to B2. This again could adversely affect those prospective applicants who have spent less time in the UK.
Whilst this route appears to be a welcome change to the tricky and limited Tier 1 routes of Graduate Entrepreneur and Entrepreneur, it will remain to be seen whether it leads to more applications or if it shuts the door on prospective entrepreneurs who have not yet built strong connections with the UK.
For legal advice on the new start up visa or other immigration law matters, please get in touch with Farleys’ immigration law team on 0845 287 0939 or submit your enquiry online.