UK visa options for entrepreneurs

The Innovator Founder visa category is the only bespoke route for entrepreneurs setting up their business in the UK. We look at the requirements of this visa and, for those who may not qualify, other potential visa options.

Innovator Founder visa

Innovator Founder visa applicants must, as a first step, apply for their business, or business idea, to be endorsed by one of the Home Office’s four certified endorsing bodies:

Endorsed businesses can then apply to the Home Office for an Innovator Founder visa.

An endorsement will only be granted if the business is innovative, viable, and scalable. It is therefore not possible to secure an endorsement to invest in or run any business – the business must be in some way innovative and new to the UK market.

This makes it difficult for entrepreneurs who, for example, want to open a restaurant in the UK. If the market is already catered for in some way, the business is unlikely to be considered innovative and meet endorsement requirements.

Endorsements will also only be granted if there are good prospects that the applicant will be able to meet settlement requirements (a permanent visa) at the end of the initial three-year visa period. Applicants for settlement must meet at least two of the following requirements:

At least £50,000 has been invested into the business and actively spent furthering the business;
The number of the business’ customers has at least doubled within the most recent three years and is currently higher than the mean number of customers for other UK businesses offering comparable main products or services;
The business has engaged in significant research and development activity and has applied for intellectual property protection in the UK;
The business has generated a minimum annual gross revenue of £1m in the last full year covered by its accounts;
The business is generating a minimum annual gross revenue of £500,000 in the last full year covered by its accounts, with at least £100,000 from exporting overseas;
The business has created the equivalent of at least ten full-time jobs for “settled workers”; and/or
The business has created the equivalent of at least five full-time jobs for settled workers, which have a mean salary of at least £25,000 a year (gross pay, excluding expenses).

Most entrepreneurs will be able to meet the first requirement after three years, but the rest are difficult. Business founders who plan to stay in the UK long-term should have this in mind when deciding which route to apply under. If the prospects of meeting the settlement criteria are low, you may wish to consider other options.

Skilled Worker “self-sponsorship”

It is possible to start your business in the UK under the Skilled Worker visa sponsorship route. Any business that is incorporated in the UK can apply for a licence to sponsor foreign workers. A sponsor licence application for your own company can be made which in turn will enable you to come to the UK as a Skilled Worker. This is often referred to as self-sponsorship.

Despite the phrasing, it is not possible to sponsor yourself under the Skilled Worker route unless you have at least one paid member of staff or a business partner permanently based in the UK. Your business must nominate a UK-based director or member of staff who can act as the initial point of contact with the Home Office and assign you a Certificate of Sponsorship for a Skilled Worker visa. You cannot assign a Certificate of Sponsorship to yourself.

Skilled Workers can only be sponsored to work in certain roles outlined on the Government website in Appendix Skilled Occupations. They must also be paid a minimum salary that is dictated by the role they are sponsored for. Under the current rules in place prior to 4 April 2024, most Skilled Workers must be paid the higher of either £26,200 or the “going rate” for that job. Going rates are specified alongside the long list of occupations in Appendix Skilled Occupations.

Not all roles are eligible for sponsorship, and Skilled Workers are restricted to working solely in the role that they are sponsored for. Although self-sponsors can apply to be a Skilled Worker for any eligible role in the business, entrepreneurs need to be careful when selecting the role they will be sponsored for. In most cases they should be sponsored in some form of director or managerial position.

If, for example, an entrepreneur is founding a mechanical engineering business in the UK as a qualified engineer, they cannot be sponsored as an engineer if they will be performing additional director duties. They should instead be sponsored as a Chief executive, which carries a going rate of £59,300. For contrast, the going rate for a mechanical engineer is £33,000.

Skilled Workers can apply for settlement after living in the UK for five years continuously.

Changes to Skilled Worker salary thresholds

On 4 December 2023, Home Secretary James Cleverly announced a jump of nearly 50% to the minimum salary threshold for sponsorship of a foreign worker, from the current £26,200 to £38,700. This increase will prevent numerous roles in various sectors from Skilled Worker sponsorship, and start-ups in particular may struggle to meet the new salary thresholds.

The change will take effect from 4 April 2024, underlining the urgency with which businesses must now act in making applications under the current rules.

How to apply for a Skilled Worker sponsor licence

Unless a prospective worker already has an independent right to work, UK organisations must obtain a sponsor licence before they can sponsor and employ foreign workers. Any business that is incorporated in the UK can apply for a sponsor licence, but the business must have at least one paid member of staff that is based permanently in the UK.

Sponsor licence applications involve submitting an online application form and emailing supporting evidence to the Home Office. Newly established businesses that have been operating for less than 18 months are subject to additional criteria and must provide at least four of the following documents to support a sponsor licence application:

Evidence that the company has a current corporate bank account with a bank registered by the Financial Conduct Authority and the Prudential Regulation Authority in the UK.
Evidence you have employer’s liability insurance cover for at least £5m from an insurer authorised by the Financial Conduct Authority.
Your latest acknowledgement of a Company Tax Return (CT620, or the completed CT600 tax return and the CT603 notice).
Proof of registration with His Majesty’s Revenue and Customs (HMRC) as an employer for Pay As You Earn (PAYE) and National Insurance. This must be a document issued by HMRC and include your PAYE reference number and your Accounts Office reference number.
If applicable, your HMRC Value Added Tax (VAT) registration certificate confirming your VAT registration number and “effective date of registration”.
Proof of ownership or lease of your business premises.
Evidence that you have the appropriate planning permission to operate your type or class of business at your trading address where this is a local authority requirement.
Licence for your premises to serve alcohol issued by the local authority or court.

The first point in bold is mandatory, so setting up a corporate bank account is key to any new business.

Other options

Entrepreneurs who have already established their business overseas and are looking to expand into the UK may consider applying under the UK Expansion Worker visa route. This category enables businesses that have been active and trading overseas for at least three years to send a senior employee or owner to the UK to establish the business’ UK entity.

Like the Skilled Worker category, the business must first apply for an Expansion Worker sponsor licence, which can in turn assign the overseas owner a Certificate of Sponsorship to come to the UK. Expansion workers can assign themselves Certificates of Sponsorship and administrate the sponsor licence themselves. The licence is only valid for four years and must be switched to a Skilled Worker sponsor licence before the end of the initial four-year period.

Entrepreneurs in certain disciplines who are considered leaders, or potential leaders, in their field may also be eligible to apply for a Global Talent visa. These fields are:

maths;
engineering and sciences;
digital technology;
arts and culture (including architecture and fashion design); and
humanities and social sciences.

Applicants will require endorsement from an endorsing body in their relevant field.

This visa route provides a high degree of flexibility as these visa holders do not have any work restrictions. They can work in any role and, importantly, start a business in the UK.

While visa holders will be expected to prove that they have earned money in their endorsed field to qualify for a permanent visa after five years, they can still setup a side business in a completely different sector. This route is very much worth considering in applicable cases.

If you need advice on the best visa options for you and your business, please don’t hesitate to contact our immigration team.

Author(s):