The Tier 1 'Genuine Entrepreneur Test'

The Tier 1 Entrepreneur Visa category provides a route for those with investment funds of £50,00 or £200,000 to enter the UK in order to establish or take over a UK business, and achieve settlement after five years. In order to successfully obtain entry to the UK via this route, the applicant must:

  • Meet the eligibility requirements under the Immigration Rules; and
  • Pass the ‘genuine entrepreneur test’.

Focusing here on the latter, the ‘genuine entrepreneur test’ is just one of the many changes that the government has made to the Tier 1 Entrepreneur visa route in recent years in an attempt to curb abuses under this route.

The extent to which the changes have affected the number of successful applicants under this route are well evidenced by the Immigration Quarterly Reports from the Home Office. Examination of the statistics reveals in the years after the introduction of the test in 2013, the refusal rate has consistently reached the 50% mark. Comparatively, prior to the introduction of this test, the average refusal rate for entry clearance applications was 28%. Nick Nason, of the freemovement blog, has compiled these statistics into a useful graph:

Grants-and-refusals-for-Tier-1-Entrepreneur-visas.001 (1).jpeg

As such, there are a large number of applicants facing refusal, mostly due to the applicant’s lack of understanding of the ‘genuine entrepreneur test’ and the relevant documentary evidence required. The purpose of this article is to provide some assistance to applicants who may experience difficulty negotiating the complex nature of the test.

What is the ‘Genuine Entrepreneur Test?’

Introduced in January 2013, ‘the genuine entrepreneur test’ is a subjective test which applies to all initial, extension and Indefinite Leave to Remain (ILR) applications under this route. In assessing your credibility as a genuine entrepreneur, the Home Office takes the following into account:

  1. The viability and credibility of the source of your funds;
  2. The viability and credibility of your business plan and market research into your chosen sector;
  3. Your previous educational and business experience;
  4. Your immigration history and previous activity in the UK.

You will need to submit extensive documentary evidence with your application which allows the Home Office to assess your eligibility against these criteria, and in some circumstances, you may be required to attend an interview to answer questions in respect of the aforementioned points. Below is a short guide that will assist in preparing documentary evidence and a short list of non-exhaustive questions which may be asked in relation to your application under the ‘genuine entrepreneur test’.

Passing the Test

Source of Funds

You may be asked to demonstrate that the funds that have been used to apply under this category are still available to you beyond the date of your application. The funds must continue to be available until the funds are invested or spent as required by the Immigration Rules.

  • Do you still have access to funds?
  • Have you maintained funds?
  • Where have the funds come from?
  • Where are the funds now kept?
  • Do you have funds in other accounts?
  • Do you have sufficient funds to support yourself/your family?

Business Plan & Market Research

If you are making an initial application, you must provide a business plan, setting out your proposed business activities in the UK and how you expect your business to succeed. You will also need to prove that you have studied the market, competitors and financial projections, which have given you the confidence that your business venture will be a success.

  • Who wrote the business plan?
  • What is your business?
  • Is anyone else involved in the business? What are their roles? How much will you be paying them?
  • Will you require a business premises? Where will you be located?
  • Why have you chosen the UK for your business? Why have you chosen this business in particular?
  • Do you have a marketing strategy?
  • How have you arrived at the strategy outlined in your business plan?
  • What competition is there in the market for your type of business?

Previous Experience

You will need to be able to prove that with your experience, education and skills you will be able to execute your business plan. This will involve going through your CV thoroughly.

  • What have you been involved in previous to this business venture?
  • How are your experience and previous roles relevant to your business?
  • How do your educational qualifications complement your business idea?
  • What experience does the rest of your team bring?

Immigration History

The Home Office will also want to discuss your previous movements and activities.

  • Have you been to the UK previously? Why?
  • Where have you been since you last entered the UK?
  • What are your long term aims of remaining in the UK? Do you intend to apply for settlement?

Whilst it is demonstrably difficult to satisfy the ‘genuine entrepreneur test,’ the above questions and guidance will provide some assistance in navigating the complexities of the Immigration Rules. With refusals of Tier 1 Entrepreneurship applications at over 50%, there is still always the prospect of refusal. Our immigration solicitors often consult with entrepreneur visa applicants who find it challenging to demonstrate they meet the ‘Genuine Entrepreneur Test’ despite having a credible business plan. If you would like further assistance with your Tier 1 Entrepreneur application, please contact us for comprehensive, fully up-to-date advice.