Britain is Open for Business - September 2014


Immigration System & Policy: MW 299

Summary

1. Despite the government’s substantial range of measures to reduce net migration to the tens of thousands by the end of the Parliament, the UK remains very much open for business. There are numerous categories under which people can come to the UK to work, do business and study, allowing people to invest in and start up companies as well as allowing existing companies to recruit workers from outside the EU to fill skills gaps in the labour force. Moreover, there are no numerical limits on business visas except work permits, capped at 20,700 of which only around two thirds have been taken up this year. There has been nothing to prevent employers from bringing in skilled workers if they are really needed.

Introduction

2. This paper will explain each of the routes through which people can come to the UK to work, do business and study and will outline the latest statistics for each route. The paper will also discuss some of the complaints that persist.

Immigration Routes for Economic Migrants

3. The government has opened a series of categories under Tier 1 to allow high value and exceptionally talented people to come to Britain. They are designed to ensure that Britain remains a hub for business start-ups and wealth creation in line with the overarching purpose of this government – to get Britain’s economy moving again.

a) Tier 1 – Exceptional Talent[1]

This category is designed for exceptionally talented people who are recognised in the fields of the arts, sciences and technology as world leaders or promising leaders in their individual fields. The government has made available 1,000 places which have been allocated to five competent bodies, The Royal Society (250 places), The Arts Council (250 places), The British Academy (150 places) The Royal Academy of Engineering (150 places) and Tech City UK (200). Each body is able to endorse applicants to enter the country for a period of three years and four months. To ensure that places are available across the year the endorsements occur in two phases.

There is no minimum income. The visa can be extended for an additional two years and the applicant is entitled to settle after five years if they continue to work in their expert field and satisfy language requirements.[2] Applicants can also bring their dependants with them for the duration of their visa.

In the last 12 months (to the year ending June 2014) there were 79 Exceptional Talent visas issued together with 19 dependant visas.[3] There were 13 extensions of this visa and an additional 17 dependent extensions.[4]

b) Tier 1 – Entrepreneur[5]

This category is designed to allow people to come to Britain to take over or set up a business. The route is open to entrepreneurs with at least £50,000 in capital from a registered venture capital firm, seed funding competition or government department or £200,000 of personal wealth which can include third party backing to invest in a business that they will be actively involved in running.

Applicants are granted three years and four months leave and can switch into this category while already here in the UK. The visa can be extended for an additional two years and applicants are entitled to settle in the UK if they continue to run the business. Applicants can gain settlement after three or five years depending on the success of their business.[6]. Crucially there is no limit on the numbers. Family members can also come as dependants.

In the year ending June 2014 there were 1,156 Entrepreneur visas granted and a further 1,969 dependants.[7] There were 4,478 in country extensions of this type of visa and a further 2,515 dependant extensions.[8]

John Vine, the Chief Inspector, had highlighted a 1,520% increase in applications for Tier 1 Entrepreneur between February and December 2012 which the Home Office claimed was a result of the closure of the Post Study Work route. [9] Visa data shows that in the year ending June 2014 49% of applications were rejected, suggesting that applicants who are bogus are being identified.[10]

c) Tier 1 – Investor[11]

This category is designed to allow the entry of high net worth individuals wishing to make a substantial financial investment in the UK. The route is open to people with £1 million of funding. The applicant does not have to meet English language requirements nor show evidence of maintenance funds. The visa can be granted for three years and four months and individuals can switch into this category while already legally present in the UK. The visa can be extended and the applicant is entitled to settle after two, three or five years depending on the amount of their investment and on the condition that they continue to have no recourse to public funds.[12] Again, there is no limit on numbers and applicants can also being their dependants.

In the last 12 months (YE June 2014) there were 770 Investor visas granted and a further 1,280 dependants.[13] There were also 422 in country extensions and 404 dependant extensions.[14]

d) Tier 1 – Graduate Entrepreneur[15]

This route is designed for graduates in the UK to stay on in order to develop their business ideas. An individual must have been identified and endorsed by an approved Higher Education (HE) institution or UK Trade and Investment (UKTI) as having a genuine and credible business idea. There is a limit of 2,000 places for the year 2014/15, 1,900 for UK HE institutions to endorse graduates and 100 for UKTI to endorse overseas graduates[16]. Visas are granted for an initial period of one year and can be extended for a further year. Visa holders are allowed to participate in outside work. Applicants must prove that they have at least £945 available in funds for maintenance. Dependants can also apply to remain with family members. The graduate entrepreneur visa does not lead to settlement and time spent in the route does not count towards settlement through another route. Visa holders can switch into the main Tier 1 Investor route if they have £50,000 funding or they can switch into Tier 2.

In the year ending June 2014 there were 131 Graduate Entrepreneur visas granted and a further 38 dependants.[17] There were an additional 285 extensions and 66 dependant extensions.[18]

e) Tier 2 – General[19]

Tier 2 General is designed for skilled migrants who have a job offer to come to the UK to work in a role that cannot be filled by a local worker. The job must be at graduate level and have a minimum salary of £20,500. This route is capped at 20,700 per year but there is no limit for those paid above £153,500 per year. Applicants can extend their visa up to a maximum of six years. Dependants can join family members and they also have the right to work. If the worker earns £35,000 after five years they may be entitled to permanent settlement (£35,500 for settlement applications made after April 2018). All approved employers can recruit from outside the EU if they cannot find a local worker, ensuring that employers can fill skills gaps.

Despite there being 20,700 places available annually to businesses, in the last 12 months only 13,004 visas were granted, less than two thirds of the cap, and 13,311 visas granted to their dependants.[20] There were a further 27,281 in country extensions of Tier 2 General visas and 14,997 dependant extensions.[21] The cap is clearly not biting but there have been claims of excessive bureaucracy in the applications process.

f) Tier 2 – Intra Company Transfer[22] (ICT)

This route is designed for skilled employees of multinational companies to transfer to a UK based branch of the company. Again, the worker must not be filling a role that a UK based worker can fill as the route is not intended to replace settled workers. An ICT can be granted on a short term basis for those required for less than 12 months, or on a longer term basis for up to a maximum of five years (nine years maximum for staff earning £152,100 or more). A short term ICT must have a salary of £24,500 and a long term ICT must be paid at least £41,000. ICTs can bring their dependants with them but they are not eligible for settlement. There is no cap on the number of ICT visa grants. Short term ICT workers cannot return to the UK within twelve months.

In the last 12 months there were 34,889 ICT visa grants, 20,594 of which were short term ICTs and 11,978 were long term (2,317 ICTs were granted under the previous system). A further 22,781 dependants were also granted visas.[23] There were also 8,130 in country extensions of ICT visas and 8,872 dependant extensions.[24]

g) Tier 4 – Students[25]

Students can enter the UK under Tier 4 to study full time at one of the 1,591 recognised education establishments.[26] In order to qualify for a visa, students must have been accepted on a course, have an acceptable level of English language skills and be able to demonstrate sufficient funds to cover maintenance. Visas are granted for a maximum of five years at bachelor’s level and 8 years at PhD level. Visas can be extended provided that the applicant can demonstrate academic progression. In addition, students are granted an additional four months at the end of their course in order to search for work. Students of PhD courses can stay on for a year to work without switching routes. Students studying at Master’s level and above for more than 12 months can bring their dependants with them. Students at degree level and above can work for up to 20 hours a week. There is no cap on the number of genuine students coming to Britain. Students can also switch into work categories and there is no limit on the number of students who can switch into Tier 2 General if they are offered a graduate level job.

In the last 12 months 198,339 Tier 4 student visas were granted to non-EU applicants with a further 19,956 dependants. There were also 78,109 student visitor visas granted to people wishing to study short courses of less than 12 months.[27] In the same year 82,121 students extended their visas and there were 12,235 dependant extensions.[28] An additional 5,922 students switched into a work category in 2013, down from 36,371 in 2012, 33,436 of whom switched into the Post Study Work category, which has now been closed. Over 4,000 students who had been offered a graduate level job switched into Tier 2 in 2013.[29] This suggests that the closure of the post study work route will act to protect UK graduates by ensuring only skilled graduates that the labour market requires are able to stay on to work.

h) Business Visitors

The business visitor visa is designed for people wishing to come to the UK to do business for a short period. This includes visitors such as actors and other film crew, overseas media employees, academic visitors, and general business people wishing to attend meetings etc. Business visitor visas are generally granted for a maximum of six months and frequent business visitors can apply for a multiple entry visit visa.

The latest data relates to 2013 in which 1.68 million business visitors were given leave to enter the country, the highest number since 2007. Chinese business visitors have increased from 67,600 2012 to 71,700 in 2013. Indian business visitors increased from 97,800 in 2012 to 109,000 in 2013, an increase of 11%.[30]

i) Tourist visas

Tourists from countries whose nationals require a visa can apply for a general visitor visa which can be granted for up to six months.[31] Tourists must show that they intend to leave at the end of their visit and have enough money to cover the costs of their stay and their return home.

In 2013 7.01 million people visited the UK, the highest number since at least 2004. Chinese visitors to the UK have soared from 157,000 in 2012 to 252,000 in 2013, an increase of 48%. The government has improved the visa service to Chinese nationals, speeding up processing times which has no doubt contributed to this rise.[32]

Indian visitors have increased by 6% on 2012 to 313,000 in 2013[33], no doubt the result of an improved visa service for Indian nationals who are now able to make use of a ‘super-priority’ visa processing service in India allowing visitors the option to have their visa application processed in one day, reducing bureaucracy and uncertainty for business travellers wishing to invest in the UK.[34]

4. As with any reforms there are often improvements to be made and issues to be ironed out. The government has responded to the concerns of business and has improved the visa system to ensure that business is not hampered by immigration rules and reforms.

  • Chinese visa application centres have been improved to increase capacity.
  • A ‘Passport Back’ service has been introduced so that customers are able to retain their passport while their UK application is being processed, ensuring that business people can continue their work while awaiting decisions.
  • A VIP Mobile Visa service for business travellers has been introduced in which visa staff come to the applicant to collect application and biometric data.
  • The 3-5 day priority service has been extended and a 24 hour super priority service introduced in some countries.[35]

5. There may be some outstanding complaints and the government must address these. Some problems will require greater resources, such as addressing longer waiting times for applications that are not in the priority service, and there may be a requirement for greater discretion for Entry Clearance Officers to ensure that decisions are correct and to avoid any absurdities.

Conclusion

6. The initial introduction of the cap on work permits in 2010 was clumsy and caused consternation among employers but the new system has now settled down. The earlier protestations from the business community clearly contributed to the negative impression generated overseas. That has largely dissipated, particularly as the government has addressed the concerns of business and stressed the importance that they attach to economic recovery. It remains essential that business plays its part in sending a positive message that the UK is very much open for business.

Updated 1 October, 2014




Notes

  1. Gov.uk, Tier 1 (Exceptional Talent) Visa, URL: https://www.gov.uk/tier-1-exceptional-talent
  2. UKBA, Immigration Directorate Instructions, Chapter 6A, Settlement Tier 1, December 2012, URL: http://www.ukba.homeoffice.gov.uk/sitecontent/documents/policyandlaw/IDIs/idichapter6a/section1.pdf?view=Binary
  3. Home Office, Immigration Statistics April – June 2014, Table vi_06_q_w: Entry Clearance visas granted by category and country of nationality: Work, URL: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/345770/entry-visas2-q2-2014-tabs.ods
  4. Home Office Statistics, Immigration Statistics, Extensions of Stay Data Tables, April – June 2014, Table ex_01_q: Decisions on applications for an extension of stay by category, URL: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/345777/extensions-q2-2014-tabs.ods
  5. Gov.uk, Tier 1 (Entrepreneur) Visa, URL: https://www.gov.uk/tier-1-entrepreneur/overview
  6. UKBA, Immigration Directorate Instructions, Chapter 6A, Settlement Tier 1.
  7. Show -6 more...
  1. Gov.uk, Tier 1 (Exceptional Talent) Visa, URL: https://www.gov.uk/tier-1-exceptional-talent
  2. UKBA, Immigration Directorate Instructions, Chapter 6A, Settlement Tier 1, December 2012, URL: http://www.ukba.homeoffice.gov.uk/sitecontent/documents/policyandlaw/IDIs/idichapter6a/section1.pdf?view=Binary
  3. Home Office, Immigration Statistics April – June 2014, Table vi_06_q_w: Entry Clearance visas granted by category and country of nationality: Work, URL: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/345770/entry-visas2-q2-2014-tabs.ods
  4. Home Office Statistics, Immigration Statistics, Extensions of Stay Data Tables, April – June 2014, Table ex_01_q: Decisions on applications for an extension of stay by category, URL: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/345777/extensions-q2-2014-tabs.ods
  5. Gov.uk, Tier 1 (Entrepreneur) Visa, URL: https://www.gov.uk/tier-1-entrepreneur/overview
  6. UKBA, Immigration Directorate Instructions, Chapter 6A, Settlement Tier 1.
  7. Home Office Statistics, Table vi_06_q_w.
  8. Home Office Statistics, Table ex_01_q.
  9. Independent Chief Inspector of Borders and Immigration, ‘An Inspection of applications to enter and remain in the UK under the Tier 1 Investor and Entrepreneur categories of the Points Based System’, September 2013, URL: http://icinspector.independent.gov.uk/wp-content/uploads/2013/09/An-Inspection-of-Tier-1-PBS-Investor-and-Entrepreneur-Applications.pdf, p. 5.
  10. Home Office Statistics, Table ex_01_q.
  11. Gov.uk, Tier 1 (Investor) Visa, URL: https://www.gov.uk/tier-1-investor
  12. UKBA, Immigration Directorate Instructions, Chapter 6A, Settlement Tier 1 and Home Office, Indefinite leave to remain – Calculating continuous period in the UK, August 2013, URL: http://www.ukba.homeoffice.gov.uk/sitecontent/documents/policyandlaw/modernised/cross-cut/ilr-calculating-continuous/ilr-calculating-continuous.pdf?view=Binary
  13. Home Office Statistics, Table vi_06_q_w.
  14. Home Office Statistics, Table ex_01_q.
  15. Gov.uk, Tier 1 (Graduate Entrepreneur) Visa, URL: https://www.gov.uk/tier-1-graduate-entrepreneur-visa
  16. Home Office, Tier 1 (Graduate Entrepreneur) Guidance, July 2014, URL: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/342863/Tier_1__Graduate_entrepreneur__v8.0_EXT.pdf
  17. Home Office, Table vi_06_q_w.
  18. Home Office, Table ex_01_q.
  19. Gov.uk, Tier 2 (General) Visa, URL: https://www.gov.uk/tier-2-general
  20. Home Office, Table be_06_q_w.
  21. Home Office, Table ex_01_q.
  22. Gov.uk, Tier 2 (ICT) Visa, URL: https://www.gov.uk/tier-2-intracompany-transfer-worker-visa
  23. Home Office, Table be_06_q_w.
  24. Home Office, Table ex_01_q.
  25. Gov.uk, Tier 4 (General) Student Visa, URL: https://www.gov.uk/tier-4-general-visa
  26. UK Border Agency, Register of Sponsors (Tier 4), September 2014, URL: https://www.gov.uk/government/publications/register-of-licensed-sponsors-students
  27. Home Office, Immigration Statistics April – June 2014, Table vi_06_q_s: Entry clearance visas issued by category and country of nationality: Study, URL: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/345771/entry-visas3-q2-2014-tabs.ods
  28. Home Office, Table ex_01_q.
  29. Home Office, Immigration Statistics, April – June 2014, Table Expc_01_w: Grants of an extension of stay by current category and previous category, excluding dependants: Work. URL: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/345777/extensions-q2-2014-tabs.ods
  30. Home Office Statistics, Immigration Statistics, April – June 2014, Table ad_03_o: Passengers given leave to enter the UK in other categories by country of nationality, URL: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/346384/admissions-q2-2014-tabs.ods
  31. Visa Nationals can be found here: http://www.ukba.homeoffice.gov.uk/visas-immigration/visiting/general/visa/ Non-visa nationals can be granted leave to enter as a tourist upon arrival in the UK.
  32. Theresa May, Speech to Inaugural East West Forum, 12 September 2014, URL: https://www.gov.uk/government/speeches/home-secretarys-speech-at-the-inaugural-east-west-forum
  33. Home Office Statistics, Table ad_03_o.
  34. Home Office, ‘Same day visa service launches in India’, 12th May 2013, URL: http://www.ukba.homeoffice.gov.uk/sitecontent/newsarticles/2013/may/41-spv-india
  35. Theresa May, Speech to Inaugural East West Forum, 12 September 2014, URL: https://www.gov.uk/government/speeches/home-secretarys-speech-at-the-inaugural-east-west-forum

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