Business Plans for Tier 1 (Entrepreneur) Visa Applications
A key part of the Government’s plans to revitalise the UK economy is to stimulate entrepreneurship. In addition to attempts to support UK entrepreneurs, since 2008 successive Governments have also sought to make it easier for immigrant entrepreneurs to base and build their businesses here in the UK. To facilitate this process of attracting high net worth individuals to the UK to start businesses, the Government introduced special “entrepreneur visas”. To qualify, applicants must be able to prove that they have access to at least £200,000 to invest in a business and at least £3,100 in personal savings. The investment requirement is lowered to £50,000 if the cash comes from an FSA-registered venture capital firm or UKTI approved seed funding competition. Applicants must also have strong English language skills.
Entrepreneur visas are not, as some critics have argued, about people ‘buying’ a fast track to UK citizenship. In order to satisfy the visa criteria, applicants have to create jobs and prove that they will make a much needed long-term contribution to the UK economy. These special “entrepreneur visas” seem to have had the desired effect and more and more immigrant entrepreneurs are now starting significant businesses here in the UK each year. Only 11 entrepreneur visas where granted in 2008, rising to 54 in 2009. This number has since increased increased to 462 in the 12 months to June 2012 and looks likely to continue to rise. This of course is great news for UK PLC in terms of job creation and providing a stimulus to the economy.
Unfortunately, the rules governing an application for a Tier 1 (Entrepreneur) visa have recently been tightened in response to what the UK Border Agency (UKBA) called “organised criminality and abuse by individual applicants in the Tier 1 (Entrepreneur) category”. These new tighter rules, effective from the 31st January 2013, bring the introduction of a “genuine” entrepreneur test as a form of assessment of an applicant’s credibility. The UKBA will use further specified criteria when assessing initial applications and may request additional documents as well as seek an interview with the applicant should they have concerns. The latest update from the UKBA expanding upon what that means in practice can be read here. As you can see, the UKBA may now ask for a business plan and market research in support of an application in order to prove that the business opportunity that attracts the applicant to the UK is genuine.
This creates a real challenge for genuine applicants. They will have only 28 days from the date it is requested to put together a detailed business plan for submission in support of their application. This would be difficult for an applicant to do if they were based in the UK already, but it is almost an impossible task for someone outside of the UK to pull together a credible business plan from scratch in this time. Add to that the challenge of writing a detailed document and producing financial projections for the business in what may well be a second language and it’s plain to see that such applicants will need professional assistance in producing an “investor ready” business plan that can show to the UKBA why the applicant has chosen to invest their money in setting up this particular business in the UK.
You will need to consider whether you are going to buy a business that is already successful, or you are going to set up and run a new business. You will need to convince the UK Border agency that you are a “Genuine Entrepreneur”.
You should research your proposed business in depth and know who will be your customers, suppliers, and competitors.
You should have relevant education and/or experience in your chosen business. and this should be illustrated in your resume.
Your business plan should incorporate your skills. If your business needs particular skills and you don’t have them, then your plan needs to include the cost of staff with those skills.
You should include market research relevant to your chosen business in your business plan. Things like, what is the footfall past your shop? Who are your potential customers? What is their average spend, based on other similar businesses? Etc.
Your business plan should add up. The supporting figures should be reasonable. The plan should show expected returns over the first three years of trading. The assumptions behind the business plan should make sense.