Changes to the evidential requirements for Tier 1 (Entrepreneur) visa

Changes to the evidential requirements for Tier 1 (Entrepreneur) visa

What new evidential requirements were introduced for Tier 1 (Entrepreneur) migrants from 6 July 2018?

Two minor amendments were made to the requirements for Tier 1 (Entrepreneur) migrants which were to:

  1. make clear where letters from legal representatives confirming signatures are required
  2. restore a provision for accountants to confirm that the investment has been made on an applicant’s behalf

To explain this further, where applicants are relying on third party funding—including venture capital funds or where money from a third party has been held by the applicant for less than 90 days—one of the requirements now is to have a letter (or letters) from one or more legal representatives. The legal representatives should be neither the applicant or your third party, which confirms that the letter(s) and declaration(s) from the third party or parties contains the genuine signatures of the required signatories. The letter(s) must also clearly show the registration or authority of the legal representative or representatives to practice legally in the country where the third party or the money is.

In relation to the second amendment, this relates to the accounts showing the investment into the business. If the investment is made directly into the business by a third party, the accountant is able to confirm within the accounts that the investment was made as a result of the applicant’s activity.

What are the issues with using third party funding in Tier 1 Entrepreneur applications?

For those applying for the Tier 1 (Entrepreneur) route, most applicants choose the route which requires them to demonstrate access to at least £200,000 for investment in a new or established UK business. Applicants can either rely on their own funds or demonstrate that the funds are being made available to them by a third party which may be an individual or another business.

There are challenges with the reliance on third party funding though due to the burdensome documentary evidence applicants are required to meet in order to satisfy the Home Office’s strict requirements which are as follows:

  1. a declaration from the third party holding the funds
  2. a letter from the bank where the funds are being held
  3. legal declarations for both the third-party declaration and the bank letter confirming the validity of the signatures

While the third-party declaration and legal letter are not particularly difficult to obtain as described above, there are challenges in obtaining the required bank letter and legal declaration. Banks are often unwilling—due to internal policies or even country specific banking regulations—to confirm that funds are available to someone who is not the account holder.

While the Immigration Rules were amended to state that the bank only has to confirm that they are aware of the third party having promised to make that money available to another individual, trying to obtain such a declaration in a bank letter can be challenging and, in many cases, simply not possible.

As a result, many applicants wanting to rely on third party funds find it difficult to obtain the required evidence for the Home Office. As the documentary evidence is mandatory in these circumstances, an inability to provide such evidence would likely lead to the refusal of an application.

What options are available to overcome these challenges?

Applicants do have some options available to them to combat these challenges.

The third party can transfer the funds into the applicant’s account. This eliminates the need for the bank letter and accompanying legal declaration. Instead, the applicant can hold the funds for a period of at least 90 days and then rely on their bank statements to evidence the funds. This will delay their application slightly but provided the applicant is not in a rush to submit an application, this would be the most straightforward option. Alternatively, if the funds are transferred but the applicant is unable to delay their application submission and hold the funds for a period of 90 days, the applicant will need to evidence the transfer of funds and obtain the necessary third-party declaration and legal letter. However, this is still a good option as there would be no need for the bank letter.

Another option is to nvest the funds into the business prior to submitting the application. Obviously, this is an option which requires careful consideration and there are still a number of other documents which the applicant would be required to produce to evidence funds already invested, but again it would eliminate the need for a bank letter and legal declaration which, as explained above, is probably one of the most problematic issues when dealing with third party funding.

With a 50% refusal rate for applications submitted under the Tier 1 (Entrepreneur) route, it is imperative that care is taken when preparing an application for submission and all issues—particularly regarding the available funds—are considered at the outset so as to plan a strategy for addressing the documentary requirements of the route.

Source: LexisNexis

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