Brief outline of recommendations to Home Office from the Migration Advisory Committee on Tier 1 Entrepreneur visa.

The Migration Advisory Committee (MAC) has provided some recommendations on how to improve the Tier 1 Entrepreneur visa. In the past we have seen that the Home Office almost always go ahead and implement those recommendations in the Immigration Rules.

According to the Migration Advisory Committee there is a strong argument that the current Tier 1 (Entrepreneur) visa route should be substantially reformed. A more selective route would maximise the economic benefit to the UK by reducing volumes whilst raising the average quality of the entrepreneurs admitted.

The main recommendations are as follows:

The MAC recommends that the Government consider explicitly emphasising that the route aims to attract innovative entrepreneurs;

The MAC recommends that the Government introduces a broader emphasis on individual skills, qualifications and/or previous business history of the applicant in addition to the business plan. For example, applicants could be asked to provide evidence of an entrepreneurial track record, work experience, and skills or qualifications that are directly relevant to the business venture that they wish to pursue;

The MAC recommends that the Government seeks to make greater use of third party endorsement where feasible, including efforts to: Broaden the Tier 1 (Graduate Entrepreneur) visa to a “Start-up visa”, with UKTI-approved accelerators allowed to endorse individuals (graduates and non-graduates) for a limited number of visas, alongside the current authorised endorsing bodies. The provision for accelerators to endorse could either be incorporated within the current 2,000 cap applied to the Tier 1 (Graduate Entrepreneur) visa, or the cap could be modestly increased. Accelerators should be required to provide a minimum investment, perhaps somewhere in the region of £20,000 to £30,000, usually in exchange for equity in the business to ensure that they are suitably incentivised to select only high potential entrepreneurs. Given the growth in the number of accelerator programmes, UKTI may wish to examine whether there are more programmes that should be approved. Where appropriate, accept endorsement from other UK Government bodies e.g. Scottish Government or UKTI. Together with UKTI, and perhaps also in partnership with the UK Business Angels Association, examine the feasibility of approving a small number of angel investor networks or syndicates as third party endorsers, alongside FCA regulated venture capital funds;

Recommends that the Government examines alternative delivery options for the genuine entrepreneur test for applicants who do not have endorsement from a third party. Options could include, but are not limited to: Appointing a panel of experts with expertise in early-stage entrepreneurship (e.g. accelerators, angel investors, venture capitalists) to review business plans; Recruiting specialist immigration officers qualified to review business plans; Working with other government departments to scrutinise business plans – e.g. UKTI or BIS; Outsourcing business plan assessment to a professional business services firm;

The MAC recommends that the Government considers setting the lower investment threshold in the range £40,000 to £50,000.

The current £200,000 investment threshold has been in place since before the introduction of the PBS in 2008. The choice of this particular threshold appears somewhat arbitrary. Many new businesses will not require £200,000 as an initial seed investment. However, the MAC is satisfied that with a lower investment threshold in place for graduate entrepreneurs, migrant entrepreneurs accepted on to accelerator programmes, and others who have suitable third party endorsement, there are a range of pathways open to talented entrepreneurs with limited investment with which to launch their business. As the £200,000 threshold would continue to apply to those entrepreneurs without any third party endorsement, the MAC believes that this threshold should remain at this level to deter speculative or low quality applications. The threshold could in fact be raised slightly given that it has been unchanged for a long period of time and has therefore been falling in real terms.

Source: UK Border Agency: