Migration Advisory Committee (MAC) released a report of its review carried on the Tier 1 Entrepreneur visa category in October 2015, in its findings the MAC stated that it had “found substantial evidence of low-quality businesses” established by entrants under the UK’s Tier 1 (entrepreneur) visa programme.
A review of the statistics of the visas granted under this route since 2008 reveals that about 13,746 visas were granted under Tier 1 (Entrepreneur) or Tier 1 (Graduate Entrepreneur) route, but according to the MAC report, only 1,580 active companies have been set up by those granted visas.
Whilst MAC found that there was sufficient evidence that the “graduate entrepreneurs” route was adding value to the British economy, in contrast the Tier 1 (Entrepreneur) route has a long tail of low-quality projects which contribute little or nothing to the economy.
The report says there is evidence of Entrepreneur visa migrants who set up shell companies in which they place a minimum qualifying investment, without any underlying economic activity. However, although on the face of it the business has created two jobs, the employees are not involved in any purposeful business activity but are simply paid a salary for the purposes of meeting the extension and settlement criteria. In such cases, there is little or no underlying economic activity being carried out by the business.
The genuine entrepreneur test was introduced in 2013 to reduce the perceived abuse of the route. However, the Tier 1 (Entrepreneur) route remains highly susceptible to being abused.
Home Office Immigration Statistics show that in the year ending June 2015, the total number of successful entry clearance visa applications across all routes, excluding visitors and transit, was 538,663. Of these, the number of successful Tier 1 (Entrepreneur) applications (for main applicants only) was 1,039, compared to 53,630 under the Tier 2 route. Evidently, successful out of-country Tier 1 (Entrepreneur) applicants represent only a tiny proportion of long term entry clearance visas issued, both overall and for economic migration routes.
The report called for the government to exercise greater discretion on which entrepreneurs to admit under the scheme. As the entrepreneur visa should stimulate the flow of new, entrepreneurial ideas into the country, and should not merely create an incentive for a single injection of money into the economy.
If you would like to apply to set up a business in the UK under the Tier 1 Entrepreneur route or invest as a Tier 1 Investor or if you are working for a company that is looking at setting up a branch in the UK, book an appointment with our Immigration experts for an objective assessment of the same. Call on +91 98191 27002 or Contact us to book your consultation in person, over the telephone or Skype.
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