Global Alerts

United Kingdom – Home Office Introduces New Start-up and Innovator Categories, Reforms Tier 1 (Investor) Category, Amends EU Settlement Scheme

On March 7, 2019, the Home Office published a Statement of Changes in Immigration Rules, introducing new Start-up and Innovator categories and making reforms to the Tier 1 (Investor) category.

The Statement also makes changes to the scope and application process of the EU Settlement Scheme.

New Categories

  • The Start-up category is an expanded version of the Tier 1 (Graduate Entrepreneur) category. It is for those starting a new business for the first time in the UK. Applicants will not need to be graduates and will not need to have secured any initial funding. Successful applicants will be granted 2 years’ leave (doubled from 1 year) and will be able to progress into the Innovator category to continue developing their businesses in the UK after that time.
  • The Innovator category is intended for more experienced businesspeople. As well as an endorsement, applicants will need £50,000 to invest in their business from any legitimate source (reduced from £200,000 for most applicants in the current Tier 1 (Entrepreneur) category). The funding requirement will be waived for those switching from the Start-up category who have made significant achievements against their business plans. The category may lead to settlement in the UK.

The new categories, effective March 29, 2019, do not form part of the Points-Based System and do not include points-scoring tables. However, as with most Points-Based System categories, the partners and children (under age 18) will be able to apply as dependents of Start-up and Innovator applicants. They will have the same requirement to show they have maintenance funds and will have the same ability to work without needing to have a sponsoring employer.

Both new categories will require endorsement of applicants by UK trusted bodies – such as business accelerators, seed competitions and government agencies, as well as higher education providers. These bodies will assess applicants’ business ideas for their innovation, viability and scalability.

An English language requirement is being set at upper intermediate (B2) level (up from intermediate (B1) under the previous categories) for both categories, to ensure that successful applicants have the good command of English they will need to interact with a variety of business organizations and potential customers.

Transitional Arrangements

  • Endorsement letters for Tier 1 (Graduate Entrepreneur) applicants are valid for three months and may continue to be issued until April 5, 2019. These applications can therefore continue to be made until July 5, 2019.
  • Tier 1 (Graduate Entrepreneur) migrants will be able to switch into the new Start-up route if they have not yet had their maximum two grants of leave under the Tier 1 (Graduate Entrepreneur) route. If their Start-up endorsement is from the same endorsing body as in their previous Tier 1 (Graduate Entrepreneur) application, their business ideas will not need to meet the new Start-up criteria in relation to innovation and scalability.
  • Tier 1 (Graduate Entrepreneur) migrants (including those who switch into the Start- up category as above) will continue to be able to switch into the Tier 1 (Entrepreneur) category until July 5, 2021. Tier 1 (Entrepreneur) extension applications will remain open for these individuals until July 5, 2025, and settlement applications until July 5, 2027.
  • Extension applications for Tier 1 (Entrepreneur) migrants will remain open until April 5, 2023, and settlement applications until April 5, 2025.

Tier 1 (Investor) Reforms

The main reforms to the Tier 1 (Investor) category, which take effect March 29, 2019, are described below:

  • Applicants will have to provide evidence that they have held the funds that they will invest in the UK for two years, rather than 90 days as previously.
  • Banks must confirm they have completed all due diligence checks on applicants opening accounts for the purpose of the investment.
  • Investment in UK government bonds is being excluded, among other changes to the investment rules.

EU Settlement Scheme

This Statement of Changes provides for the full opening of the EU Settlement Scheme from March 30, 2019 for EEA and Swiss nationals and their family members to obtain the UK immigration status which they will require in order to remain in the UK permanently after the UK’s withdrawal from the European Union.

  • Provision is made for the ‘specified date’, by which EEA and Swiss citizens will need to be continuously resident in the UK and certain relevant family relationships will need to be formed, to be March 29, 2019 in the no-deal scenario, rather than December 31, 2020.
  • In line with the citizens’ rights agreements reached with Switzerland and the non-EFTA EEA countries (Iceland, Liechtenstein and Norway), nationals of those countries and their family members will also be able to apply under the scheme.
  • EEA and Swiss nationals and their family members will also be able to apply under the scheme from outside the UK.
  • The scheme will be open to the family members of British citizens who were exercising their free movement rights under EU law before returning to the UK (‘Surinder Singh’ cases), and to the family members of certain dual British/EU citizens (‘Lounes’ cases);
  • The scheme will also be open to others lawfully resident in the UK by virtue of a ‘derivative right’ to reside, based on wider EU law, including ‘Chen carers’, ‘Zambrano carers’ and others.
  • There will be no application fee under the scheme (as announced in January 2019).
  • In certain circumstances, an application under the scheme may be made on a paper application form rather than through the online application process.
  • Applicants in the UK will be able to rely on a wider range of documents as proof of their identity and nationality: their valid national identity card as well as their valid passport for an EEA or Swiss citizen; and their valid passport or biometric residence permit as well as their valid biometric residence card, for a non-EEA/Swiss family member.
  • There will be scope for applicants to submit their identity document by post to be checked and returned to them quickly, as an alternative to using the identity verification app or visiting one of the support locations.
  • A non-EEA/Swiss citizen who is the family member of an EEA/Swiss citizen with status granted under the EU Settlement Scheme may apply for an entry clearance to join that EEA/Swiss citizen in the UK, or to accompany them here, whether for a short stay or to make an application under the scheme in the UK.

Other Changes

  • The Statement of Changes also extends beyond July 2019 the Tier 2 (General) salary exemption for nurses, medical radiographers, paramedics and secondary school teachers in mathematics, physics, chemistry, computer science and Mandarin.
  • The list of countries in Appendix H, which benefit from streamlined documentary requirements for Tier 4 applications, is being updated. Brazil, Kazakhstan, Mauritius, Oman, Peru and Tunisia have met the criteria for inclusion. Argentina, the Maldives, and Trinidad and Tobago are being removed from the list.

Employers who may be affected are encouraged to contact their immigration specialist for case-specific advice.

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