The number of ‘entrepreneur visas’ issued to allow foreign nationals to create new UK businesses and jobs has more than doubled in one year,leaping to 462 last year from 199 the year before*, says Pinsent Masons, the international law firm.
Pinsent Masons explains that entrepreneur visasallow foreign nationals to start a business in the UK and earn a fast-track to UK citizenship if they can fulfil strict criteria on access to funding, job creation, or business success**,
Simon Horsfield, Partner and part of Pinsent Masons’ Private Wealth team, says: “Entrepreneur visas are not about people ‘buying’ a fast track to UK citizenship. To satisfy the visa criteria, applicants have to create jobs and prove that they will make a long-term contribution to the UK economy.”
“These entrepreneurs can be hugely beneficial to the UK economy. They’ll bring fresh ideas, create new jobs, and provide a boost just when the economy needs it.”
Simon Horsfield: “Many of these entrepreneurs will be attracted to some of the UK’s fastest growing business sectors, such as the UK’s rapidly expanding IT start-up sector, which is centred around ‘Silicon Roundabout’ in London.”
“The combination of London’s growing importance as global a tech hub and the increasing difficulty in obtaining the right to work in the UK by other means, has hugely increased the interest in entrepreneur visas over just the last year.”
According to the figures obtained by Pinsent Masons’ Private Wealth team, a total of just eleven entrepreneur visas were issued in the whole of 2008, rising to 52 in 2009, and 54 in 2010. 75 entrepreneur visas were issued in April 2012 alone.
Pinsent Masons says that entrepreneur visas were most commonly issued to American entrepreneurs last year, with 102 successful American applications (up from 59 the year before).
Successful applications from China increased by 500% to 54 last year, from just nine the year before (see graph below for the Top-5 countries by visas issued).
Simon Horsfield comments: “The tough requirements – including English language proficiency – mean the people applying for entrepreneur visas are quite different than those using alternative routes to citizenship, such as investor visas.”
Pinsent Masons says that if, after three years, holders of entrepreneur visas can demonstrate that they have created 10 permanent jobs in the UK or generated income over that period of at least £5m, they will be able to apply for indefinite leave to remain in the UK at that time (with no restriction on their right to work) rather than waiting for the usual five years.
Successful applicants must also start their business within six months of being granted the visa.
Simon Horsfield adds: “Investor visas are often used by High Net Worths looking for a quick route to stay in the UK, which can be a ‘safe haven’ from judicial or political uncertainty at home. Russians and Iranians, for example, are among the fastest growing users of investor visas. For wealthy individuals, the investor visa criteria are very easy to fulfil.”
“Entrepreneur visas are far more frequently used by those from the English speaking world or by those from countries with long-established, large expat communities in the UK.”
Recent Pinsent Masons research found that applications from Russia for investor visas nearly doubled to 121 last year from 65 the year before.
The number of UK investor visas issued increased by 78% to 419 last year from 235 the year before.
Pinsent Masons adds that increasingly tight rules on immigration have boosted the popularity of specialist visas, such as entrepreneur or investor visas.
Simon Horsfield explains: “The Government has made it much harder for foreign nationals to work in the UK. The traditional route for High Net Worths or skilled migrants, the ‘Tier one (General)’ visa, is now closed to new applicants from overseas and is only available in very limited circumstances for individuals who are already in the UK under another immigration category.”
“This is funnelling immigrants into visas like entrepreneur or investor visas. However, the Government has even tightened the already strict entrepreneur visa criteria recently.
Entrepreneur visas issued, by country of origin of applicant
*2011-12, 2010-11 (year end June 30), latest available data
**Entrepreneur visas were introduced in 2008. Applicants must show they have access to at least £200,000 to invest in a business (or access to £50,000 from an FSA-registered venture capital firm) and at least £3,100 in savings. English language skills are also required.