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

What has changed

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 introduced changes to the scope and application process of the EU Settlement Scheme.

To view the Statement of Changes in Immigration Rules please click here.

Who is affected

Clients who have hired or intend to employ foreign nationals with or without dependants in the UK.

What to expect

New Categories:
  • The Start-up Category is an expanded version of the Tier 1 (Graduate Entrepreneur) category. The Start-up Category is for applicants who are starting a new business for the first time in the UK. It is not necessary for applicants to be graduates or secure any initial funding. Successful applicants will be granted two (2) years’ leave (previously one (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 business people. 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 applicants switching from the Start-up category who have made significant achievements against their business plans. The Innovator Category may lead to settlement in the UK.

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

Both new categories will require an 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 an applicant’s 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 a good command of English in order 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 (3) months and may continue to be issued until April 5, 2019. These applications can therefore 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 exceeded 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 will take effect on March 29, 2019, are described below:
  • Applicants will be required to provide evidence that they have held the funds which they will invest in the UK for two (2) years, rather than ninety (90) days previously.
  • Banks must provide confirmation that they have completed all due diligence checks on applicants opening accounts for the purpose of the investment.
  • Among other changes to the investment rules, investment in UK government bonds is being excluded.
EU Settlement Scheme:
The 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 EU.
  • 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.
  • 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 for 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 the streamlined documentary requirements for Tier 4 applications, is currently being updated. Brazil, Kazakhstan, Mauritius, Oman, Peru, and Tunisia have met inclusion criteria. Argentina, the Maldives, Trinidad and Tobago will be removed from the list.

What you need to do

Contact your Emigra Worldwide representative for assistance in developing the appropriate immigration strategy based on case background.

This alert was prepared with information provided by Peregrine Immigration.