The UK innovator visa: innovative and scalable
At the end of March 2019, the UK government launched its new innovator visa for overseas entrepreneurs and closed the Tier 1 (Entrepreneur) category to new applicants. The innovator visa is aimed at “more experienced business people” who have £50,000 to invest in an innovative business which could be scaled up fairly rapidly, with less experienced entrepreneurs seeking investment pointed towards a start-up visa instead.
This post will lay out the requirements for the UK innovator visa before looking at whether it is really an attractive and fit-for-purpose category to attract the intended business heavyweights.
Innovator visa applicants need to fulfil two sets of criteria, which are at Part W3 and Part W6of the Immigration Rules.
The basics are:
- Endorsement — by an approved body
- £50,000 investment
- Maintenance requirement — £945 in savings for 90 days, dependents £630 each
- English language ability — test passed at level B2
- Credibility assessment — more on this below
- Must be 18 years or above
- None of the general grounds for refusal applies
- The innovator must devote their entire time to the business (unlike start-up visa holders who can work elsewhere)
- Successful applicants must pay the Immigration Health Surcharge
- A criminal records certificate is needed for overseas applicants
- The application costs — entry clearance is £1,021 and extensions £1,277
Switching from start-up visas and certain other work visa categories are allowed. The visa may be curtailed if the endorsement is withdrawn or if the endorser loses its status as an endorsing body. A refusal of the visa can only be challenged by administrative review.
Teams of innovators (not limited to two people) can apply using the same business venture but cannot share the funds nor the endorsement. Each innovator must qualify for endorsement in their own right and each must have £50,000. At the point of applying for settlement, they cannot share the same means of meeting the settlement criteria. For example, if three applicants are relying on the requirement to have created 10 jobs, 30 jobs must have been created in total.
The £50,000 could be from any source, e.g. from the applicant, a third-party individual, the endorsing body, a UK organisation employing 10+ people, or the UK or overseas organisation with fewer than 10 employees plus a legal representative and bank letter.
The lower level of funding than the £200,000 needed for the Tier 1 (Entrepreneur) category, and the wider sources of funding, are probably about all the good news there is.
An updated list of approved endorsing bodies was published on 1 May 2019. The innovator must seek endorsement from one of these industry or business experts for their business proposal.
There are different endorsement standards depending on whether or not the business is considered “new”.
The “new business” endorsement criteria require:
- a business plan that meets “new or existing market needs and/or creates a competitive advantage”
- skills, knowledge, experience and market awareness
- scalability with potential for job creation and growth into national and international markets
The “same business” endorsement criteria include confirmation that: “the business appears to be sustainable for at least the following 12 months, based on its assets and expected income, weighed against its current and planned expenses”. The application is judged against the business plan assessed in the previous endorsement: the applicant must show “significant” achievements against that plan. The endorser must also confirm that the business is active and trading, is registered at Companies House, the applicant who is now a registered director has demonstrated an active key role in the day-to-day management and development of the business, and the applicant will devote their entire time to developing the business.
An applicant endorsed for the same business may apply for entry clearance or leave to remain. It is possible to make the same business application from overseas if the applicant has previously held leave as an innovator or as a start-up migrant.
A non-starter category
Previous articles on the innovator category have rightly asked the question of who would even wish to apply for an innovator visa — even if they qualify?
Take Seedcamp, for instance, from the list of approved endorsing bodies. Like many others, the organisation will only endorse innovators it has funded and nurtured. The seed fund offers a cheque for £100,000 (which might well be attractive to someone in the start-up visa category) but in return for a 7.5% equity in the business.
Would an experienced innovator who is capable of the kind of “significant achievements” required (within three years) part with a stake in his business? Aye, there’s the rub.
Experienced business people of the calibre required for the innovator route are unlikely to need or want accelerators or incubators. Nor will they want early stage investment in exchange for an equity share. Moreover, given the volume of admin it involves (no fewer than at three endorsements on the innovator’s journey to settlement, and the fact that the endorser is not supposed to charge for the endorsement itself, there will be little incentive for an endorsing body to participate unless it can gain an equity interest.
MedCity, which will endorse entrepreneurs in the life sciences sector, is a rare endorsing body which will not seek a stake (nor provide funding to the innovator). But it also won’t deal with immigration lawyers.
The potential for conflict of interests between the endorser and the innovator would be troubling if the endorser has an interest in the business and disagrees with the innovator on how the business should be managed.
Whoever designed this visa was clearly not a business person. The category looks like a non-starter.
The material provided by freemovement.org.uk