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I am applying for an immigration visa to the UK, called the Entrepreneur visa, for non-European individuals who want to set up a new business or invest in an existing business in the UK.
The basic requirements for the initial visa are that the individual needs to show evidence of having £200,000 available to invest in the UK and needs to be able to speak English.
Then, after three years, in order to secure the two-year extension the individual must show:
●That they were appointed as a director of a UK company within six months;
●They have invested £200,000 in a UK business via equity or unsecured loan;
●Evidence that their investment has resulted in the creation of the equivalent of two full-time jobs for 12 months;
●They spent 185 days per year in the UK.
What types of investment can I make in order to get a visa? What kind of businesses are there that would allow me to start with a small investment and build it up over the three-year period, to ensure I don’t spend all my money too soon?
Linda Penny, partner at Wilkins Kennedy, an accountancy firm, explains that, as you rightly say, the Tier 1 Entrepreneur visa is for non-European migrants who want to invest in the UK by setting up or taking over and being actively involved in the running of a business or businesses here.
The exceptions are based on UK government policy. You are not allowed to set up business as a landlord and let out properties in the UK – so investment in any business that owns residential property or is involved in property development or property management will not be accepted for visa purposes. A property construction company is fine.
Apart from these, you can invest in any type of business; the UK is one of the most open economies in the world. Your choice will be heavily influenced by the skills, qualifications and experience that you have.
Very few migrant entrepreneurs make a success of starting up a new business in the UK with no previous experience. It is a sad fact that one in every three UK business startups fails within the first three years, and the failure rate is even higher for those new to the UK. This is not surprising, as foreign investors have to cope with a long list of extra challenges, including a different culture, new business and legal environment, and possibly a completely different market place for their goods or services to that which prevails in their home country.
Experienced foreign businessmen and women will often choose to buy or partner with an established UK business rather than set up a business from scratch, as this reduces their financial risk and the length of time it takes to gain a foothold in the UK. It is also a great way to learn about the practicalities of doing business in the UK.
There are a lot of small business owners in the UK who are looking for investment to finance growth. There are also a large number of individuals who are selling their well-established, profitable businesses in order to retire. A quick search on the internet will give you an idea of the sort of business opportunities available and the price that you will need to pay. Many are sold via business brokers.
As a foreigner with limited knowledge of the UK, you would be very unwise to commit to buying or investing in a UK business without seeking professional help.
In the first instance, a reputable firm of accountants will be able to help you to carry out due diligence to ensure that you don’t pay too much for your business opportunity. They will also be able to help you to understand the tax implications of your investment and your ongoing tax status, and assist you in preparing a business plan and cash flow forecast to ensure that you will not run out of money too soon.
Three years is a long time and planning is especially difficult at the moment due to the uncertain economic outlook. This means that you will need a contingency plan just in case your new business venture doesn’t go quite as well as you’d hoped. An accountancy firm experienced in working with investors new to the UK will better understand your needs and make fewer assumptions about your knowledge of the UK business world.
Once you have invested in your business, you will probably need quite a lot of help initially and, as you may be on a tight budget, sources of free advice should not be ignored. Good quality help is available for free from local and national government agencies and from chambers of commerce or the Federation of Small Business, for a small annual subscription.
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