South East: Entrepreneurs and investors affected by immigration rule changes, says Moore Blatch

Recent changes to immigration rules affecting both entrepreneurs and investors will see a wave of changes impacting all applications made in the tier 1 category from April 6.

For investors there is a new obligation to open a UK-regulated investment account before applying for leave to enter in this category.

This change may require investors to make a trip to the UK to open a suitable account and carefully consider the form of investment at an earlier stage in their application process.

Moore Blatch head of immigration Simon Kenny commented: “This new obligation may actually help ease pressure on investors, who previously were obliged to invest within three months of arrival into the UK, with many deferring decisions on this aspect of the process.

“Many investors will also be relieved for clarification of the 'topping up' provision which has been long overdue.”

The amendment to the 'topping up' provision clarifies that investors will not need to top up their portfolios if these drop to a value below £2 million on the sale of an investment at a loss, but will need to re-invest the gross proceeds of all sales into qualifying investments in the portfolio.

In contrast the tier 1 entrepreneur category is subject to a more controversial change, a 'genuineness' test has been introduced for extension and indefinite leave to remain applications, as well as initial applications for entry into this category.

Kenny commented: “This has proved a difficult obstacle in visa applications and in many cases has been a strong deterrent to making such applications.”

As well as the new ‘genuineness’ test, all new applicants under the tier 1 entrepreneur category will also need to provide a business plan.

Kenny concluded: “Overall some of the changes to impact applications in April are welcome clarifications, with many understood to be requirements anyway that appeared mainly in guidance/policy for the benefit of practitioners.

“The provisions concerning entrepreneurs particularly the 'genuineness' test is a cause for concern; the prospect of needing to meet such a test in the future for entrepreneurs’ leave to remain applications may deter people from seeking to start businesses in the UK using these provisions.”