By Henan Zhang
The UK Home Office launched the Tier 1 Entrepreneur Scheme in 2008 to attract those overseas talents wishing to set up or invest in new or established companies in the United Kingdom. After nearly a decade, more than 6,000 global entrepreneurs have successfully obtained their visas under this program. The number of applications for this visa category has remained around 400 people per quarter in the recent years. However, it is noticeable that the approval rate has dropped from around 75 percent to 50 percent.
Based on practical experience, there are many common mistakes that might occur during the preparation of the application as a prospective applicant might often struggle to find the relevant information in the UK Immigration Rules or the Policy Guidance.
What steps can be taken to avoid those mistakes in order to prepare a successful Entrepreneur visa application? There are three areas to focus on: the business plan, pre-investment and the genuine entrepreneur test.
The business plan is a mandatory document to be provided when making an initial application. It should set out an applicant’s proposed business activities in the United Kingdom and how they intend to make the business a successful one. There are many samples or templates of business plans online. However, what content does the Home Office really wish to see? For instance, why is the Tier 1 Entrepreneur interested in running this business? Does he or she have sufficient knowledge and working experience in the relevant industry? Do they have the ability to operate the business?
Beside the standard sections detailing market strategies, competitive analysis and financial forecasts, the immigration officer would also like to see a close link between the applicant’s previous academic or professional experience and the new business. It is essential for the applicant to enclose evidence of his or hers previous educational and business experience to strengthen the case, such as supporting documents showing the awards achieved, projects handled, business operated and of course, a detailed and sound curriculum vitae.
In some case scenarios, applicants might intend to start or invest in a business trading in a different field other than their own professional background. Would that undermine the possibility of granting the visa? The answer is twofold. An entrepreneur is someone who by his/her very own nature is always looking for business opportunities and is also comfortable when taking risks in unchartered territories. Entrepreneurs are meant to adapt and add value to any business in which they wish to invest. With their previous experience, they should be able to replicate the success. However, the applicants need to show in the business plan that their skills are tangible but also convertible and can be used in different industries.
Some entrepreneurs may have already established or invested in a business in the United Kingdom before obtaining a Tier 1 Entrepreneur visa. Applicants who wish to rely on pre-investment are required to provide additional documents as evidence of this. It is also important to note that only investments made within the 12-month period immediately prior to the initial application will be taken into account.
However, would it make a different to the result of the application if the applicant were to invest in advance rather than later after the visa is granted? Many clients have asked us whether they should invest the funds prior to submitting the application. Making an investment in advance will definitely increase the credibility of an application. If someone does not wish to genuinely run or invest in a business in the United Kingdom, they would be hesitant to make the investment before securing a visa. The applicant may also benefit from being familiar with the business they have already been running or invested, which will give them the confidence to pass the Genuine Entrepreneur Test. However, early investment does not necessary lead to a successful result of the visa application as the immigration officer will also focus on the viability and credibility of the business plan as well as the applicant’s ability and experience to run a business.
GENUINE ENTREPRENEUR TEST
An applicant can be asked to attend an interview after the submission of the visa application. Poor performance during the interview is a major reason as to why the application might be refused. As a genuine entrepreneur, the Home Office expects to see someone who is a visionary as well as motivated and driven to success. They should be willing to take risks and have the ability to solve problems and of course, be knowledgeable. They also need to show their creativity, passion, intelligence and business acumen. The immigration officer would first assess the applicant’s academic background and previous working experience. The more evidence is provided, the easier it is to demonstrate the applicant’s abilities with the caveat that the documents provided must be pertinent and specific to the application. The applicant will also need to be fully proficient and have a good understanding of the business plan.
Further, the immigration officer will judge the authenticity and feasibility of the project based on the contents of the business plan. It is the most important material available to the Home Office to understand and review the proposed business. If the business plan completely fails to highlight the features of the project or its competitiveness, the immigration officer might doubt the profitability of the business and the applicant’s genuine intention to start or invest in a new or established UK company.
The applicant must be also very familiar with the operation of the business and be familiar with the commercial environment in the UK. For example, UK tax policies, national minimum wage and VAT, if applicable as well as any pertinent regulations. Of course, as a foreign investor, the immigration officer won’t expect the applicant to know all the relevant law or regulations, but the applicant must have an understanding of the basic rules.
It is fine for the applicant to conduct the interview in his or her native language, and in this case an interpreter will be present during the interview. However, on few occasions, the failure of an accurate translation has affected the immigration officer’s judgment in terms of the outcome of application. Applicants should be careful in listening to the translation and point out the mistakes or misunderstandings in the course of the interview. If the reasons stated in the refusal letter are the result of an incorrect translation, it is unlikely that the applicant will succeed in his or her Administrative Review.
The Tier 1 Entrepreneur Scheme is one of the most popular visa categories for people to migrate to the UK due to the low threshold of required funds compared to, for instance, the Tier 1 Investor Visa. However, the lower threshold means a greater scrutiny on the part of the Home Office. An applicant should use extra care when preparing for the application. An immigration officer will always take into account an applicant’s immigration history and a previous refusal might undermine any future application. Therefore, it is crucial to seek professional legal advice before making an application to be safe rather than sorry.