How to apply for a UK Start-Up visa
On 29 March 2019 the UK launched its Start-Up visa for early-stage but ‘high potential’ entrepreneurs who are starting a business in the UK for the first time. Key points are as follows:
- 2 year visa for successful applicants
- Intended for those setting up business in the UK for first time
- Business idea needs endorsement by an endorsing body
- But no need to show investment funding available
- And no restriction on working outside own business
- Dependant family members can join main applicant
Unlike its predecessor (the Tier 1 (Graduate Entrepreneur) visa), applicants do not need to show they have funds available to invest in their business when they make the application.
The endorsing bodies
At the time of writing (29 March 2019), the endorsing bodies for the Start-Up visa are split between 24 ‘business’ endorsers, and 120 ‘Higher Educational Institution (HEI)’ endorsers, almost all universities. The full list is here.
There is a documented process for organisations applying to become endorsing bodies, so this list is likely to change over time.
The UK visa authorities do not advise applicants which endorsing body to choose to make their application.
Indeed, the Home Office explains that it is up to endorsing bodies how they wish to market their involvement in the Start-Up visa process and what types of business ideas they wish to endorse.
Further guidance on the types of business ideas an endorsing body is likely to endorse will no doubt be contained on the websites of the respective endorsers, although none is available as yet (on 29 March 2019).
The endorsement criteria
The main effort in this application will be the preparation of the business proposal. This will be measured against the following 3 key criteria by the endorsing bodies:
The Home Office has given individual endorsing bodies significant leeway in making the decision as to whether the criteria are met, but has provided some ‘suggestions’ as to how applications might be assessed:
- Does the applicant have a genuine, original business plan that meets new or existing market needs and/or creates a competitive advantage?
- Is the business offering something more than merely competing with similar local traders?
- Is there a need for the business in the UK market that is not already being fulfilled?
- Is the idea bringing something new to the pre-existing UK/global business market?
- Does the applicant have, or are they actively developing, the necessary skills, knowledge, experience and market awareness to successfully run the business?
- Is there evidence of market research?
- Does the applicant have realistic, sustainable, product goals?
- Is there a long-term plan for the business?
- Is there evidence of structured planning and of potential for job creation and growth into national markets?
- Is the business likely to gain sufficient traction?
- Is it a business with a potential for growth?
- Would this business successfully scale to be a part of the national market?
It is not clear at this stage whether a formal business plan will be required (as was previously the case with the Tier 1 (Entrepreneur) application).
One imagines that, in order to avoid applicants applying to all 144 endorsing bodies at the same time, each endorser will at least require the completion of a tailor made application form (perhaps in addition to a formal business plan), rather than simply ask applicants to provide a document which can be sent to multiple locations.
Getting the endorsement
If the endorsing body agrees to endorse an applicant a letter will be issued which can be hard-copy or electronic.
A copy of this letter should be sent to the Home Office by the endorsing body (if it is not sent the immigration application may be refused, so it will be important to get confirmation from the endorsing body that it has been before submitting the visa application).
The endorsement remains valid for 3 months and the individual must use it to make an application for a Start-Up visa during this time.
Making the application
If in the UK, it is possible to switch into the Start-Up visa route from the following categories:
- Tier 1 (Graduate Entrepreneur) (minus time already spent in that route)
- Tier 2
- Tier 4 (General) (with restrictions)
- Visitor who has been undertaking activities as a prospective entrepreneur
At the time of writing, the fee for out of country applications is £363 or £493 from within the UK. The same fee applies for each dependant family member. The immigration health surcharge will also be payable.
Wherever you are, applications are made via the GOV.UK portal. Applicants must show that they have held at least £945 in their account for 90 days to meet the maintenance requirement, plus £630 (for same period) for each dependant.
Applicants must also show they are proficient in English language (B2 CEFR level) in one of the ways prescribed in the rules. This is a higher level than was previously required for Tier 1 (Entrepreneur) applicants.
Consideration by the Home Office
The average grant rate for Tier 1 (Graduate Entrepreneur) visas over the last 4 years was 95% (in almost 900 applications). This was for applicants who had already been endorsed by their university so is perhaps unsurprising. It is hoped that rates of refusal in this route will be similarly low.
Despite the fact that the immigration rules provide for a ‘credibility assessment’ after the endorsement has been given (see paragraph 3.7 of Appendix W, Immigration Rules), guidance suggests that this will not normally be necessary.
If the application is unsuccessful for any reason, applicants can re-apply using the same endorsement, providing the 3 month period from the date of the endorsement has not yet passed.
After the endorsement
Having been granted the endorsement, Start-Up visa holder will be expected to spend the majority of their time developing their businesses. However, importantly, the rules permit visa holders to take on other work outside of their businesses to support themselves.
There is an ongoing reporting requirement for visa holders, and they will be required to report progress at the 6 and 12 month stages of their visas. At these points, they will need to demonstrate that they have made reasonable progress with their original ideas.
If they are no longer pursuing their original business ideas, applicants must be pursuing new business ideas that are also innovative, viable and scalable.
Options at the end of the visa
At the end of the 2 year period, applicants can switch into the innovator category to extend their stay and develop their businesses in the UK. At the current time it does not appear that they will be able to switch into other visa routes.
There is likely to be a bottleneck at this stage unless the number of endorsing bodies is significantly expanded within the innovator category (currently just 24, and with nominal capacity to endorse 600 applicants per year), compared with 144 in the Start-Up category (almost 3,500).