The UK’s Tier 1 Investor visa route has closed. What are your options now?

What is the Tier 1 UK Investor visa?

The UK’s residency-by-investment programme, first introduced in 2008, allowed you to enter and stay in the UK if you invested £2,000,000 in capital. Your investment was restricted to UK government bonds or share capital of active and trading UK companies.

Why is the UK shutting down the investor visa?

The Tier 1 Investor visa route had been under constant review and, in some cases, gave rise to security concerns. While the Home Office has done work on this visa route to reform it in order to prevent questionable funds entering the UK, it has decided to close the route to prevent further abuse.

Home Secretary Priti Patel commented on the decision: “Closing this route is just the start of our renewed crackdown on fraud and illicit finance. We will be publishing a fraud action plan, while the forthcoming Economic Crime Bill will crackdown on people abusing our financial institutions and better protect the taxpayer.”

With the Investor visa route now closed, we take a look at the other routes open to individuals with investment funds. 

See also: Top 10 countries where people can buy citizenship and residency.

Alternate routes for investors to the UK

The UK’s points-based immigration system has been designed to attract foreign workers based on the skills and contributions they can make to the economy. The Skilled Worker visa is by far the most popular way to do this. But the Skilled Worker visa requires a confirmed job offer from a licensed sponsor as well as being able to meet the skill level and salary threshold. 

If you have investment funds, there are two ways to go to the UK without a job offer: the Innovator visa and the Start-up visa. Both these routes are designed to attract entrepreneurial talent from abroad and are aimed at individuals looking to set up an innovative business in the UK.

At first glance, these two routes look quite similar and individuals who are looking to start a business in the UK often wonder which one they should apply for.

See also: Why the UK is still one of the best countries for business expansion.

The UK’s Innovator visa

The Innovator visa targets individuals who are looking to establish an innovative business in the UK. Innovator visa applicants must have their business or business idea endorsed by a Home Office approved endorsing body.

The business does not have to be a new one. However, if you are starting a new business, you will be required to have £50,000 in investment funds and be able to prove how the funding was acquired. 

You must be able to show that your business idea is:

• New – you cannot join a business that is already trading.
• Innovative – you must have an original business idea which is different from anything else on the market.
• Viable – it has potential for growth.

You are exempt from the investment funds requirement if your business is already established and has been endorsed for an earlier visa. Or if you’ve changed your business and already approved with your endorsing body.

Innovator visa requirements

You must be:

• At least 18 years old
• Able to meet the English language requirement
• Be able to prove that you have at least £1,270 in your personal savings to support yourself while you’re in the UK

You can stay in the UK for three years on this visa and you can apply for it to be extended. There is no limit on the times you can extend this visa. 

What you can and cannot do on an Innovator visa

With an Innovator visa you can:

• Set up a business or several businesses
• Work for your business – this includes being employed as a director, or self-employed as a member of a business partnership
• Bring your partner and children with you as your ‘dependants’, if they’re eligible
• Travel abroad and return to the UK
• Apply to settle permanently in the UK (also known as indefinite leave to remain) if you’ve lived in the UK for three years and meet the other eligibility requirements.

You cannot:

• Do any work outside your business, for example work where you’re employed by another business
• Work as a professional sportsperson, for example a sports coach
• Apply for most benefits (public funds), or the State Pension

The UK’s Start-up visa

If you do not have the investment capital to start a new business or are not an experienced business owner, then the Start-up visa is a viable pathway. It’s similar to the Innovator visa in that you can apply for it if you want to set up a new, innovative business in the UK – it must be something that’s different from anything else on the market. Your business must be endorsed by an authorised body that is either a UK higher education institution or a business organisation with a history of supporting UK entrepreneurs. 

Start-up visa requirements:

You must be:

• At least 18 years old
• Able to meet the English language requirement
• Able to prove that you have at least £1,270 in your personal savings to support yourself while you’re in the UK

As with the Innovator visa, you must be able to show that your business idea is:

• New – you cannot join in a business that is already trading
• Innovative – you must have an original business idea which is different from anything else on the market
• Viable – it has potential for growth

The Start-up visa allows you to stay in the UK for two years, but you cannot extend this visa. You may be able to switch to a Skilled Worker visa if you meet the requirements or an Innovator visa if you set up a business while on a Start-up visa and:

• Your endorsing body has assessed and agreed to it
• Your business is active, trading and sustainable
• You have day-to-day involvement in it

What you can and cannot do on a Start-up visa

With a Start-up visa you can:

• Bring your partner and children with you as your ‘dependants’, if they’re eligible
• Work in another job, as well as working for your business
• Travel abroad and return to the UK
• Switch to this visa from some other visa categories

You cannot:

• Apply for most benefits (public funds), or the State Pension
• Work as a professional sportsperson, for example a sports coach
• Settle in the UK on this visa

Which route is right for you?

The main differences between the Innovator and Start-up visas are the required investment funds and level of experience. More experienced business people with sufficient investment capital available are ideal candidates for the Innovator visa. Less experienced entrepreneurs who have not set up a business in the UK before are better suited to the Start-up route.

New business owner – The Start-up route is aimed at people who have never established a business in the UK before, while this is not a condition of the Innovator route. 

Funding – While both these visas require you to have £1,270 in your personal savings to support yourself while you’re in the UK, only the Innovator visa requires an amount of £50,000 as an investment when you’re starting a new business.

Work – On the Start-up visa, you are allowed to be employed at another job outside of your business. This is not allowed on the Innovator visa, meaning you can only work in your own business.

Settling in the UK – If your intention is to settle in the UK permanently, then you won’t be able to do that on the Start-up visa, which is only valid for two years and cannot be renewed or extended. You can, however, switch to an Innovator visa which is valid for three years and there is no limit to the amount of times it can be renewed. Interestingly, on the Innovator visa, you will be able to apply for indefinite leave to remain after three years, if the specific requirements are met, which is two years sooner than other routes, such as the Skilled Worker visa.  

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Need help with applying to work or start a business in the UK? We help individuals and businesses navigate all aspects of UK immigration and can assist with ongoing employee immigration management. Contact us at +44 (0) 20 7759 5307 or email workpermits@sableinternational.com.