The start-up and Innovator visa requirements stipulate that a business idea must be innovative, viable and scalable. These three facets must be met at the endorsement phase of an application. A letter of endorsement from an approved endorsing body will confirm that this requirement has been met. The letter of endorsement is a mandatory document to be submitted with the visa application.
The Home Office must also be satisfied that all three facets have been met when considering the visa application. If the Home Office are not satisfied that the business plan does not demonstrate that the business is innovative, viable and scalable an application may not award the necessary points. If the Home Office think that they require more information to determine the case, they may request further information from you: you should demonstrate and provide evidence as to detailed market research which illustrates the foundation of your business plan.
What makes a start-up or innovator visa business idea innovative?
Prospective applicants often query what the relevant threshold for innovation is in order to meet the requirements. There are varying definitions according to the Immigration Rules:
“(a) the applicant must have a genuine, original business plan that meets new or existing market needs and/or creates a competitive advantage
In our opinion, a useful definition of innovation would also be where an applicant:
Intends to disrupt the market in which it operates in based upon an advancement which creates a competitive advantage.
The business must intend to launch a new idea in the UK. This could be by way of a new product or service that does not exist in the UK market.
The idea can also be innovative because it intends to provide a service or develop a good with a new approach e.g., to use data collection, AI or new technology to give the business a competitive advantage. You should be able to coherently explain why your business idea is different from similar businesses that already exist and why that difference will create a competitive advantage.
Can my idea still be endorsed if the business is already registered with Companies House?
In many cases, when an applicant applies under these categories for the first time, they should be incepting a new business. If the business is already registered with companies house it should not have commenced trading. The only exception to this rule is where an individual has been granted permission a Start-Up visa and is transitioning to the Innovator route.
The business idea must be original but not necessarily inventive. It is important that you have either generated the idea yourself or made a significant contribution to it as an instrumental member of the founding team.
How do I make my Start-Up or Innovator visa business idea viable?
According to the Immigration Rules:
‘(b) the applicant’s business plan must be realistic and achievable based on the applicants’ available resources’
The Start-Up endorsement does not have a requirement for an applicant to have funds to invest at all, while Innovators are each required to show access to £50,000 to make an application.
Endorsing bodies will also assess to what extent the aims and objectives of the business set out in the business plan can be achieved with the investment funds available to the business. The amount needed will be set out in the financial forecast of the business plan. The intended investment funds can be held outside of the UK but will be converted to GBP on the date of the application, and you may need to provide a letter confirming that the funds are held in a regulated financial institution, and that they are transferable to the UK.
Importantly the Immigration Rules state:
‘(C) the applicant must have, or be actively developing, the necessary skills, knowledge, experience and market awareness to successfully run the business.
The assessment as to the viability of the business focuses on whether the intended applicant is the correct person to run the business. Whilst you do not need prior experience of running a business in the same field or at all, you must be able to demonstrate that you possess the necessary skills to run the intended business.
How do I demonstrate that my Start-Up or Innovator visa business idea is scalable?
When assessing business idea scalability, it should be noted that this requirement differs between both routes. This is because the Start-Up category is only a two-year route and does not lead to settlement in the UK whereas the innovator is a three-year category which does lead to settlement provided certain requirements are met.
For the Start-up route, the Immigration Rules state:
‘(D) there is evidence of structured planning and of potential for job creation and growth into national markets’
Comparatively, for the Innovator visa, the rules require evidence for growth in national and international markets
The business plan should include information outlining your possible growth and scaling of the business based upon, location, customer bases and marketing channels. It is important for the business idea to comment upon your marketing strategies and financial forecasting. In our experience the forecasting should go beyond the length of the intended visa, particularly for start-ups, this becomes useful when applicants seek to transition t into the Innovator route.
The scalability of the business is an important factor when applicants approach settlement on the Innovator visa route. It is therefore imperative for the business plan to forecast how the business intends to meet two of the following five requirements:
- At least £50,000 has been invested into the business; or
- The number of customers has at least doubled in the most recent three years and is higher than the mean number of customers for other UK businesses offering comparable main products or services; or
- The business has applied for intellectual property protection in the UK; or
- The business has generated a minimum annual gross revenue of £1 million in the last full accounting year; or
- The business had a minimum annual gross revenue of £500,000 in the last full accounting year, with at least £100,000 from exporting overseas; or
- The business created the equivalent of at least 10 full-time jobs for settled workers; or
- The business has created the equivalent of at least 5 full-time jobs for settled workers, each of which has a mean salary of at least £25,000 a year gross pay.
Contact our Immigration Solicitors
Our immigration team provide expert advice and assistance regarding applications at the initial endorsement stage and visa phase for the Start-Up and Innovator Visas. Please contact Charlotte Catto on chc@branchaustinmccormick.com
Branch Austin McCormick LLP
32 St James’s Street
London
SW1A 1HD
