Daily Archives: 20th August 2019

Start-up and Innovator categories- Immigration Rules for Workers (Appendix W)

Tommaso Poli, Immigration and Asylum Paralegal Executive at HS Legal Solicitors, Illustrates the new immigration rules for workers provided in Appendix W.

 

On 29 March 2019, the Immigration Rules for Workers (Appendix W) were introduced. Appendix W currently contains the Start-up and Innovator categories, but it is anticipated that other categories for workers will be added.

Start-up and Innovator categories succeed to Tier 1(Graduate Entrepreneur) and Tier 1(Entrepreneur) which are now closed to new applicants.

With regard to Tier 1(Entrepreneur) category, it is important to highlight that:

  1. Entry clearance applications can still be accepted from applicants who have held Tier 1 (Entrepreneur) or Tier 1 (Graduate Entrepreneur) leave in the past 12 months.

  1. Leave to remain applications can still be accepted from applicants who were last granted Tier 1 (Entrepreneur) or Tier 1 (Graduate Entrepreneur) leave.

  1. Dependants can still apply to join applicants who have obtained leave for Tier 1 (Entrepreneur).

  1. Extension applications for Tier 1 (Entrepreneur) migrants will remain open until 5 April 2023, and settlement applications until 5 April 2025.

  1. Switching applications for Tier 1 (Graduate Entrepreneur) applicants will remain open until 5 July 2021. Tier 1 (Entrepreneur) extension applications will remain open for these individuals until 5 July 2025, and settlement applications until 5 July 2027.

  1. Applications will no longer be accepted from the dates listed above. Applicants who wish to apply for indefinite leave to remain in the future should ensure that they do not have excessive absences from the UK and can meet the specific Tier 1 (Entrepreneur) ILR requirements.

  1. Start-up and Innovator Categories definitions

Section W1 defines them as it follows:

Start-up category is for people seeking to establish a business in the UK for the first time. Applicants will have an innovative, viable and scalable business idea which is supported by an endorsing body. This category offers leave for 2 years and does not lead directly to settlement in the UK, but applicants may progress into the Innovator category below.

Innovator category is for more experienced businesspeople seeking to establish a business in the UK. Applicants will have an innovative, viable and scalable business idea which is supported by an endorsing body. With some exceptions, applicants will have funding to invest in their business. This category [offers leave for 3 years and] may lead to settlement in the UK.

  1. Endorsement Criteria

At paragraphs W5.2 and W6.3 (the endorsement criteria), innovative, viable and scalable are defined as it follows:

Innovation, the applicant has a genuine, original business plan that meets new or existing market needs and/or creates competitive advantage.

Viability, the applicant has (or, for Start-up category only, is actively developing) the necessary skills, knowledge, experience and market awareness to successfully run he business.

Scalability, there is evidence of structured planning and of potential for job creation and growth into national markets.

In addition to the above, for Start-up category, the endorsing body has to be reasonably satisfied that the applicant will spend the majority of their working time in the UK on developing business ventures. For Innovator category, the endorsing body has to be reasonably satisfied that the applicant will spend their entire working time in the UK on developing business ventures.

It is also important to note that, for Start-up category only, the business idea does not need to be endorsed as innovative, viable and scalable, if the applicant’s last grant of leave was in the Tier 1 (Graduate Entrepreneur) category, and the endorsement is from the same endorsing body as the endorsement which led to that grant of leave. Instead, the endorsement letter must confirm that the applicant’s business venture is genuine and credible.

  1. Switching Categories

If the applicant is applying for leave to remain (so the applicant is legally in the UK), the applicant is eligible to switch to Start-up category from the following categories (see paragraph W3.3(b)):

  1. Tier 1 (Graduate Entrepreneur)

  2. Tier 2

  3. Tier 4 (General) – the restrictions in paragraph W3.4 apply

  4. A visitor who has been undertaking permitted activities as a prospective entrepreneur, as set out in Appendix V

The applicant legally in the country is eligible to switch to Innovator category from the following categories:

  1. Start-up

  2. Tier 1 (Graduate Entrepreneur)

  3. Tier 1 (Entrepreneur)

  4. Tier 2

  5. A visitor who has been undertaking permitted activities as a prospective entrepreneur, as set out in Appendix V

  1. Endorsing Bodies Requirements

At paragraphs W5.3 and W6.8, the requirements to qualify as an endorsing body are provided as it follows:

  1. The organisation has a proven track record of supporting UK entrepreneurs, including resident workers or it is a new organisation set up for this purpose by another body which has its own track record of this nature.)

  1. The request to become an endorsing body is supported by a UK or devolved government department as being clearly linked to the department’s policy objectives.

2A) In alternative to the above (1) and (2), for Start-up category only, the organisation can be a UK higher education institution which meets both of the following requirements:

  1. The institution is a UK recognised body or a body in receipt of public funding as a higher education institution from one of the following:

· the Higher Education Funding Council for England

· the Scottish Funding Council

· the Higher Education Funding Council for Wales

· the Department of Employment and Learning in

Northern Ireland

  1. The institution has established processes for identifying, nurturing and developing entrepreneurs among its undergraduate and postgraduate population.

  1. The organisation must be able to competently assess applicants’ business ventures against the endorsement criteria set out in these Worker rules.

  1. The organisation must agree to all of the following responsibilities:

(i) To stay in contact with those they have endorsed at checkpoints 6, 12 and 24 months after their application is granted;

(ii) To inform the Home Office if, at these checkpoints, both of the following apply:

(1) The individual has not made reasonable progress with their original business venture;

(2) The individual is not pursuing a new business venture that also meets the endorsement criteria set out in these Worker rules.

(iii) To inform the Home Office if an applicant misses any of these checkpoints without the endorsing body’s authorisation;

(iv) To withdraw its endorsement if either (ii) or (iii) applies, unless it is aware of exceptional and compelling reasons not to withdraw its endorsement, and informs the Home Office of those reasons;

(v) To inform the Home Office if it has any reason to believe that an individual it has endorsed breaches any of their conditions.

  1. The organisation must not be connected to past or present abuse of the immigration system.

  1. Endorsement

All applicants for entry clearance or leave to remain in the Start-up or Innovator category must have been endorsed by a listed endorsing body. The applicant must provide an endorsement letter issued by the endorsing body, which includes all of the following information (see paragraph W5.1 and 6.1):

(i) the name of the endorsing body;

(ii) the endorsement reference number;

 

(iii) the date of issue, which must be no earlier than 3 months before the date of application;

 

(iv) the applicant’s name, date of birth, nationality and passport number;

 

(iv(a)) [ For Start-up category only ] confirmation that the applicant has not previously established a business in the UK (unless the applicant’s last grant of leave was under the Start-up or Tier 1 (Graduate Entrepreneur) category)

 

(v) a short description of the applicant’s business venture and the main products or services it provides or will provide to its customers

 

(vi) confirmation that the applicant’s business venture meets the endorsement criteria

 

(vii) the name and contact details (telephone number, email and workplace address) of an individual at the endorsing body who will verify the contents of the letter to the Home Office if requested

As for the Innovator category, the applicant may be endorsed under the new business or same business endorsement criteria (see paragraph W6.2).

To be endorsed under the new business criteria, either of the following has to apply:

(i) the application is an initial application;

(ii) the application is an extension application, and the applicant is pursuing a different business venture from the one that was assessed in the endorsement which led to their previous grant of leave.

To be endorsed under the same business criteria, both of the following has to apply:

(i) the applicant’s last grant of leave was in the Tier 1 (Graduate Entrepreneur), Start-up or Innovator category;

(ii) the applicant is pursuing the same business venture that was assessed in the endorsement which led to that grant of leave.

An applicant may be endorsed under either the new business or the same business criteria if both of the following apply:

(i) the applicant’s last grant of leave was in the Tier 1 (Graduate Entrepreneur) or Start-up category;

(ii) the applicant is pursuing the same business venture that was assessed in the endorsement which led to that grant of leave.

New business and same business categories have different endorsement criteria. Applicants, whose last grant of leave was in the Tier 1 (Graduate Entrepreneur) or Start-up, can be endorsed according to the endorsement criteria which better fit with their current business venture.

  1. Innovator New Business Endorsement Criteria

As already mentioned, the endorsement criteria in the Innovator new business category are innovation, viability and scalability along with the applicant’s legal obligation to spend their entire working time in the UK on developing business ventures.

If the latter are satisfied, paragraph W6.4 establishes the investment funds requirement as it follows:

(a) at least £50,000 funds must be available to the applicant to invest in their business. This may include funds which have already been invested in the business.

(b) If the endorsement letter confirms that at least £50,000 funds are available or have been invested in the applicant’s business, no further evidence of investment funds is required.

(c) If the endorsement letter does not confirm that a full £50,000 funds are available or have been invested, the applicant must provide the documents listed in paragraph W6.5 as evidence of the remaining balance of their £50,000 investment funds.

(d) If the business venture has one or more other team members who are applying for, or have been granted, leave in the Innovator category, they cannot share the same investment funds. There must be at least £50,000 investment funds available for each Innovator team member. These additional funds are not needed for team members who are resident workers or who have leave under another category of the Immigration Rules, which allows them to engage in business.

Paragraph W6.5 establishes the necessary evidence for investment funds in the Innovator new business category, if the endorsement letter does not confirm that a full £50,000 funds are available or have been invested, as it follows:

(a) If any of the funds are available from a UK organisation which employs at least 10 people, the applicant must provide a letter from that organisation confirming this. The letter must include:

(i) a signed declaration from the funding provider, dated no earlier than 3 months before the date of application, setting out all of the following:

(1) how they know the applicant

(2) the amount of funding they are making available in pounds sterling (£)

(3) confirmation that this funding has not been promised to any other person or business for another purpose

(ii) the name and contact details (telephone number, email and workplace address) of an individual at the organisation who will verify the contents of the letter to the Home Office if requested

(b) If any of the funds are available from an overseas organisation, a UK organisation which employs less than 10 people, or an individual person, the applicant must provide all of the following:

(i) a signed declaration from the funding provider, dated no earlier than 3 months before the date of application, setting out all of the following:

(1) how they know the applicant

(2) the amount of funding they are making available in pounds sterling (£)

(3) confirmation that this funding has not been promised to any other person or business for another purpose

(ii) a letter from a legal representative (who is registered to practise legally in the country where the third party or the money is), confirming that the declaration and signature in (1) above is genuine;

(iii) a bank letter, confirming that the funds are held in a regulated financial institution(s). The letter must be dated no earlier than 1 month before the date of application. If the institution is outside the UK, the letter must also confirm that the funds are transferrable to the UK.

(c) If any of the funds are held by the applicant, they must provide either of the following:

(i) bank statements, showing the funds are held in the UK in an institution regulated by the Financial Conduct Authority. The statements must cover a consecutive 3 months, ending no earlier than 1 month before the date of application.

(ii) a bank letter, confirming that the funds are held in a regulated financial institution(s). The letter must be dated no earlier than 1 month before the date of application. If the institution is outside the UK, the letter must also confirm that the funds are transferrable to the UK.

If these documents do not show that the applicant has held the funds for at least 3 months, the applicant must also provide the signed declaration and letter from a legal representative set out in paragraph (b)(i) and (ii) above, in relation to the organisation or person who provided the funds to the applicant.

(d) If any of the funds have already been invested in the applicant’s business, the applicant must provide either of the following evidence, showing the amount that has been invested:

(i) business accounts, showing the name of the accountant and the date they were produced

(ii) business bank statements

(e) If any of the evidence above shows that funds are available to the applicant’s business rather than to the applicant themselves, or have been invested in the business, the applicant must provide a Companies House document showing their connection to the business. This document is not needed if the endorsement letter confirms the applicant’s connection to the business.

(f) Any funds in a foreign currency will be converted to pounds sterling (£) using the spot exchange rate which appeared on www.oanda.com on the date of application.

(g) Funds will not be accepted if they are held in a financial institution which the Home Office is unable to make satisfactory verification checks with, as listed in Appendix P of the Immigration Rules.

However, the applicant will not need to provide the evidence requested in paragraph W6.5 for any investment funds where the endorsement letter confirms (see paragraph W6.1(c)):

  1. The endorsing body is providing the funds;

  2. The endorsing body has verified the funds are available from other sources (including the applicant themselves);

  3. The endorsing body has verified that the funds have already been invested in the applicant’s business.

  1. Innovator Same Business Endorsement Criteria

Turning to the endorsement criteria in the Innovator same business category, paragraph W6.6 provides as it follows:

(a) The applicant has shown significant achievements, judged against the business plan assessed in their previous endorsement;

(b) The applicant’s business is registered with Companies House and the applicant is listed as a director or member of that business;

(c) The business is active and trading;

(d) 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;

(e) The applicant has demonstrated an active key role in the day-to-day management and development of the business;

(f) The endorsing body is reasonably satisfied that the applicant will spend their entire working time in the UK on continuing to develop business ventures.

  1. General Requirements and Conditions

Paragraph W3.9 provides a general requirement related to the maintenance funds as it follows:

(a) The applicant must have at least £945;

 

(b) If a main applicant and their partner or children are applying at the same time, there must be enough maintenance funds in total, as required for all the applications, otherwise all the applications will be refused;

(c) The funds in (a) above must be held in a personal bank or building society account, where the applicant is the account holder (or one of the account holders in the case of a joint account);

 

(d) Where the funds are in one or more foreign currencies, the funds will be converted to pound sterling (£) using the spot exchange rate which appears on oanda.com for the date of application;

(e) The funds will not meet the maintenance requirement if any of the following apply:

(i) The funds are in a financial institution listed in Appendix P of the Immigration Rules;

 

(ii) The funds are not in cash. The decision maker will not accept evidence of shares, bonds, credit cards, overdraft facilities or pension funds;

(iii) The applicant was in the UK illegally, or in breach of their leave conditions, when they obtained any of the funds.

 

(f) The funds must have been held in the account for a consecutive 90 days, ending no earlier than 31 days before the date of application;

 

(g) The applicant must provide evidence of the above, which may be in any of the following forms:

(i) personal bank or building society statements

(ii) a building society pass book

(iii) a letter from their bank or building society

(iv) a letter from another financial institution regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) for the purpose of personal savings accounts

(v) a letter from an overseas financial institution regulated by the official regulatory body for the country in which the institution operates and the funds are located

 

(h) The evidence in (g) must show all of the following:

(i) the name of the account holder

(ii) the account number

(iii) the financial institution’s name and logo

(iv) that the funds in the account have been at the required level throughout the 90-day period

(v) the date of each document

(vi) in the case of personal bank or building society statements, any transactions during the 90-day period

 

(i) Bank or building society statements must not be mini-statements from automatic teller machines (ATMs) and must be one of the following:

(i) statements printed on the bank’s or building society’s letterhead

(ii) electronic statements, accompanied by a supporting letter from the bank or building society, on company headed paper, confirming the statements are authentic

(iii) electronic statements, bearing the official stamp of the bank or building society on every page

 

(j) The end date of the 90-day period will be taken as the date of the closing balance on the most recent document provided. Where documents from two or more accounts are submitted, this will be the end date for the account that most favours the applicant;

 

(k) If the applicant is applying in the Start-up or Innovator categories, they do not need to provide evidence of maintenance funds if the letter from their endorsing body confirms they have been awarded funding of at least £945. In the case of Innovator applicants, this must be in addition to the £50,000 investment funds required in that category.

Furthermore, paragraph W2.2/3 provide few general conditions:

if an application for entry clearance or leave to remain is successful, it will be granted subject to all of the following employment conditions:

(a) no employment as a doctor or dentist in training;

(b) no employment as a professional sportsperson (including as a sports coach);

(c) if the application is in the Innovator category, no employment other than working for the business(es) the applicant has established.

In (c), working for such business(es) does not include any work pursuant to a contract of service or apprenticeship, whether express or implied and whether oral or written, with another business. This means successful applicants cannot effectively fill a position or hire their labour to another business, even if the work is undertaken through contracting with the applicant’s own business or through a recruitment or employment agency. (paragraph W2.2)

Moreover, if an application for entry clearance or leave to remain is successful, it will be granted subject to all of the following other conditions:

(a) no recourse to public funds;

(b) registration with the police, if this is required by Part 10 of the Immigration Rules;

(c) study is permitted, subject to the condition set out in Part 15 of the Immigration Rules. (paragraph W2.3)

Ultimately, the applicant must be at least 18 years old, must not be in the UK in breach of immigration laws, must not fall for refusal under the general grounds for refusal set out in Part 9 of the Immigration Rules, satisfy the credibility assessment provided at paragraph W3.7 and have a B2 level of English language ability.