Changes to Tier 1 (Entrepreneur) Rules

On 26 February the Home Office announced a Statement of Changes in the Immigration Rules, including to the Tier 1 (Entrepreneur) rules. The majority of the rules come into effect on 6 April 2015.

The “genuine entrepreneur” test will now apply not only to the initial applications but also to extensions and indefinite leave to remain applications. This change make sense to us and gives the Home Office greater discretion when considering the renewal and indefinite leave to remain applications.

Clarification is being made to the rules regarding how investment funds may be spent, and the restriction on engaging in businesses principally concerned with property development or property management. The principle is that the business should be generated from provision of goods or services and not from the increase in property value and/or property rents. A similar change is being made to restrict applicants in the Tier 1 (Graduate Entrepreneur) category from engaging in businesses principally concerned with property development or property management.

A new requirement has been added for all initial applicants to submit a business plan as one of the mandatory documents. This change confirms what the Home Office already requires in practice under the current rules.

Further, if applicants have held their investment funds for less than 90 days before making an initial application; they will have to provide evidence of the third party source of those funds. This is very similar to the requirement already applicable to Investors.

A change is being made to restrict the ability of Tier 1 (General) Migrants from being able to switch into Tier 1 (Entrepreneur), unless they have already established a UK business before 6 April 2015, or they have funding from a government department or endorsed seed funding competition. This change is being made due to the closure of Tier 1 (General) extension applications.

A clarification is being made that applicants who receive their business funding from a UK or Devolved Government Department may receive it from an intermediary public body provided that body confirms that the funds were made available by a UK or Devolved Government Department for the specific purpose of establishing or expanding a UK business.

Kasia Janucik