Get your great idea off the ground by applying for the UK’s Innovator Founder Visa
14 May, 2023
If you have a bright idea for a business, the UK is one of the best places to make it real. With a $1.1 trillion startup ecosystem and deep wells of venture capital funding, founders from around the globe have brought their dreams to fruition in tech hubs like London, Cambridge, Glasgow and beyond.
The Innovator Founder Visa is the document that makes this possible. Colloquially known as the ‘startup visa’, it allows foreign entrepreneurs to launch and scale new businesses in the UK. It also provides a pathway to permanent residency and eventual citizenship.
Here’s everything you need to know about how the Innovator Founder Visa can help you launch your concept in the UK.
How long does the Innovator Founder Visa last for?
The visa allows the holder to live and run their business in the UK for up to three years. After the initial period, you may seek Indefinite Leave to Remain (ILR)
This is shorter than most other business immigration routes, which typically require a five-year stay before eligibility for ILR. After the initial period, you may seek ILR.
Can I bring my family?
The Innovator Founder Visa allows you to bring your spouse and dependent children under 18 to the UK.
Am I eligible for the Innovator Founder Visa?
Applicants from within the EU/EEA who wish to launch a business in the UK will need to secure an Innovator Founder Visa, just like applicants from outside the EU.
This visa is suitable for individuals who may be the sole founder or part of a founding team. The business may already be operational at the time of application, but the applicant must be integral to its founding team.
To qualify for the Innovator Founder Visa, applicants are measured against a points system. The threshold is 70 points, 50 of which come from either the new business or existing business criteria, but not both.
For founders looking to hire for new roles, the jobs created must comply with UK employment laws, require at least 30 hours of work per week, and exist for a minimum of 12 months. Combining two part-time positions can also fulfil this requirement.
Settlement eligibility
Securing an endorsement depends on the applicant’s likelihood of meeting the permanent residency requirements at the end of the initial three-year period.
Applicants aiming for settlement must satisfy at least two of the following conditions:
- Invest at least £50,000 into the business, which must be actively used to develop the enterprise.
- Achieve a customer base growth that doubles within the last three years and exceeds the average customer base size compared to similar UK businesses.
- Conduct significant research and development activities and seek intellectual property protection in the UK.
- Generate a minimum annual gross revenue of £1 million in the latest fiscal year.
- Produce a minimum annual gross revenue of £500,000 in the last fiscal year, with at least £100,000 stemming from exports.
- Create at least ten full-time jobs for settled workers.
- Create at least five full-time jobs for settled workers, with an average annual salary of at least £25,000 (gross pay, excluding expenses).
While the first investment criterion is generally achievable within three years, the other requirements can be challenging. Entrepreneurs should carefully consider these when planning their long-term strategy in the UK. If you think you might struggle to meet these criteria, you may wish to explore some alternative business visa pathways.
Does my business plan need an endorsement?
For you to receive an Innovator Founder Visa, your business idea must be approved by a Home Office-approved endorsing body.
How to apply for the UK Innovator Founder Visa
Before you plan your UK Innovator Founder Visa application, you need to know the Home Office’s expectations.
Then, follow this structured approach:
Step One: Consult with Our Experts
Getting some professional assistance can significantly boost your application’s chances of success. Our team specialises in assessing the potential of business ideas and aligning them with the right endorsing body. Our experts will help you validate and prime your business idea for success.
Step Two: Developing your business idea and crafting a business plan
Before you can get an Innovator Founder Visa, you need to turn your business idea into a proper plan.
This document will detail to the endorsing bodies and the Home Office how your idea will work. Your application hinges on getting this right, so here are some tips.
1. Conduct thorough market research
To validate the demand for your product or service, engage directly with potential customers through interviews, surveys, and market testing. Endorsing bodies are particularly interested in evidence that shows genuine customer interest, such as early orders or letters of intent. A hands-on approach to market research will demonstrate that your business idea has potential customers and meets an existing market need within the UK.
2. Showcase financial projections and scalability
Your plan should include detailed financial projections illustrating your business’s growth potential. Demonstrating scalability is crucial, so the plan should reflect how your business can expand to meet increasing demand and capture a larger market share over time.
3. Highlight your personal contribution
This visa is the Home Office’s investment in you as a founder, so take care to delineate your role in developing the business. The endorsing bodies need to see that you have made a significant and active contribution to the business plan, not merely been included as an investor. You should show that you are integral to business strategy and execution.
Step Three: Securing an endorsement for the Innovator Founder Visa
Obtaining an official endorsement from a recognised body is a prerequisite for your Innovator Founder Visa application. As of 13 May 2024, there are four designated endorsing bodies you can approach:
- Envestors Limited
- UK Endorsing Services
- Innovator International
- Global Entrepreneurs Programme (GEP)
The GEP, a government initiative run by the Department for Business and Trade, targets internationally mobile, tech-based entrepreneurs. This programme supports entrepreneurs in scaling and internationalising their companies from a UK base.
It is important to note that GEP only provides visa endorsements to founders invited to participate in their program.
1. Criteria for Endorsement
Each endorsing body has its own criteria, but they are generally looking for business plans that demonstrate the following:
- Innovation: Your business should offer a product or service unavailable in the UK market.
- Scalability: There should be a clear potential for significant growth, showing how the business can expand its market reach.
- Viability: Your business plan, including financial forecasts, must be realistic and achievable, supported by your investments, and demonstrate that you possess the necessary skills and experience in the sector.
2. Types of Endorsement
- New Business: This endorsement applies to initial applications and extensions where the applicant proposes a different business venture than te one previously assessed.
- Same Business: Applicable if you continue with the same business venture initially endorsed under a new business criterion or a previous Startup or Tier 1 (Graduate Entrepreneur) visa.
3. Application Process and Costs
You must secure your endorsement before you submit your visa application. Each endorsing body might have a slightly different approach to assessing applications, especially distinguishing between ‘new business’ and ‘same business’ criteria.
Applying for an endorsement costs £1,000 per person, payable directly to the endorsing body.
Step Three: Due diligence and KYC for the Innovator Founder Visa
At this pivotal stage, your chosen endorsing body will evaluate the legitimacy and viability of your business proposal.
This involves detailed background checks—known as Know Your Client (KYC) checks—and a review of your venture’s funding sources. Transparency during this phase is paramount; ambiguity or lack of clarity could potentially jeopardize your application.
1. Background Checks and KYC Procedures
The endorsing body will scrutinise your personal and professional history to validate your credentials and assess your capability to lead and grow your business in the UK. This comprehensive background check aims to confirm that no legal or ethical barriers might affect their decision to support your visa application.
2. Funding Verification
Understanding the origin and legality of your investment funds is critical. Endorsing bodies require clear, documented evidence of your funding sources to ensure they comply with UK and international financial regulations. This scrutiny is intended to prevent fraud, money laundering, and other illegal activities.
3. Reporting Concerns to the Home Office
Suppose the endorsing body identifies significant issues during their checks, such as misrepresenting your business’s progress, non-compliance with checkpoint requirements, or breaking immigration conditions. In that case, they are obliged to report them to the Home Office. Such reports can have serious implications for your visa status.
4. Consequences of Non-Compliance
Suppose an endorsing body withdraws its endorsement due to non-compliance or other significant issues or loses its authorisation to endorse applicants for the Innovator Founder route. In that case, your immigration permission may be revoked. This underscores the importance of maintaining ongoing compliance and transparency throughout the duration of your visa.
5. Ensuring a Smooth Process
To navigate this stage successfully:
- Maintain thorough records and documentation of your business operations and funding.
- Be prepared to provide comprehensive details about your professional background and business dealings.
- Engage openly and honestly with the endorsing body to address any issues or concerns they might have.
By approaching the due diligence phase with thorough preparation and integrity, you can enhance your chances of securing an endorsement and, ultimately, your Innovator Founder visa.
Step Four: Submitting your Innovator Founder Visa application
After obtaining an endorsement, you are ready to proceed with your Innovator Founder Visa application. It’s highly advisable to engage an immigration and legal expert at this stage to ensure accuracy and completeness in your application, thus minimising potential risks associated with errors or omissions.
1. Key Documents Required for the Application:
- Endorsement Letter: This proves that an endorsing body has evaluated and approved your business or business idea.
- Identity and Nationality Proof: A valid passport or another acceptable document that verifies your identity and nationality.
- Financial Evidence: Bank statements demonstrating that you have maintained at least £1,270 in savings for 28 consecutive days before your application. This requirement is to show that you can support yourself initially upon arriving in the UK.
- English Language Proficiency: Evidence that you can speak English to a sufficient standard, which can be demonstrated through:
- Passing a Secure English Language Test (SELT) from an approved provider.
- Having academic qualifications in English, such as a GCSE, A level, or a degree taught in English. For degrees obtained outside the UK, verification through Ecctis is necessary to confirm equivalence to UK academic standards.
- Health Checks: Tuberculosis test results if you are from a country where this is a requirement.
- Certified Translations: Any non-English or non-Welsh documents must be accompanied by certified translations.
2. Additional Passport Requirements
- Ensure there is a blank page in your passport for visa endorsement.
- Applicants from outside the EU, Switzerland, Norway, Iceland, Liechtenstein or those without a biometric passport need a physical visa sticker on their passport.
3. Identity Verification Process
- Biometric Information: Non-EU applicants or those without a biometric passport must visit a visa application centre to have their fingerprints and photograph taken for a biometric residence permit.
- ID Check App: Applicants from eligible countries with biometric passports can use the ‘UK Immigration: ID Check’ app to scan their identity documents and create or access their UK Visas and Immigration (UKVI) account.
4. Application Processing
After applying online, proving your identity, and submitting the required documents, your visa application is typically decided within three weeks. If you need a quicker decision, you can pay for expedited processing.
Step Five: approval, arrival, and establishing your business in the UK
Upon approval of your Innovator Founder Visa, you can enter the UK and begin your entrepreneurial journey. We recommend that you maintain ongoing communication with your endorsing body, as they can offer continued mentorship and support to establish your business.
1. Support for dependents
Innovator Founder Visa holders can bring their family members to the UK, including spouses, civil partners, or unmarried partners (with at least two years of cohabitation) and dependent children under 18. Financial requirements for dependents include:
- £285 for a partner,
- £315 for the first child,
- £200 for each additional child.
All dependents must meet suitability criteria, and those not residing in the UK for at least 12 months may require TB certificates. Dependents are also eligible for settlement, potentially concurrently with or after the Innovator Founder, under specific conditions regarding continuous residency and absence from the UK.
2. Employing staff in the UK
If your business involves hiring staff, you must register as an employer with HM Revenue and Customs (HMRC) and secure employer’s liability insurance. You must also adhere to UK employment laws, including minimum wage requirements, social security, and pension contributions. Hiring foreign workers is permissible, provided they have legal working status in the UK.
3. Tax responsibilities
All UK businesses need to register with HMRC and are responsible for filing annual tax returns. The UK tax year begins on April 6th, with tax returns and payments due by January 31st of the following year. Business taxes vary based on the structure:
- Sole traders and partnerships pay taxes on business profits.
- Corporations must register for Corporation Tax, which is currently 20% on profits, factoring in allowances and reliefs.
- Businesses with an annual turnover exceeding £83,000 must register for VAT. Capital gains tax also applies if business assets are sold for a profit.
4. Compliance and monitoring
Your endorsing body, acting on behalf of the Home Office, will conduct regular compliance checks, typically at 12 and 24 months post-visa issuance. These checks, costing £500 each, assess your adherence to the initial business plan and evaluate sales growth, job creation, and investment progress. Failure to demonstrate sufficient progress can result in the withdrawal of your endorsement.
Benefits of the UK Innovator Founder Visa
The Innovator Founder Visa is designed to position the UK as a natural home for the most creative and enterprising minds. A 2019 report by Entrepreneurs Network found that foreign nationals founded 39% of the UK’s fastest-growing businesses. This visa pathway is a strategic necessity for the British economy. Accordingly, it offers some key advantages over other business immigration routes.
- Flexible investment requirements: Unlike many other business visas, the Innovator Founder Visa does not stipulate a minimum investment amount. Applicants are free to finance their ventures independently or through external funding. This flexibility allows a broader range of entrepreneurs to pursue business ideas in the UK.
- Operational freedom: Visa holders can establish one or multiple businesses and are permitted to work both within their company and in external employment. The only requirement for external jobs is that they are skilled positions at or above level 3 on the Regulated Qualifications Framework, which corresponds to an A-level qualification.
- Collaborative entrepreneurship: This visa allows individuals to join an entrepreneurial team where each member shares and contributes to a common business vision. While each team member must file a separate application, this fosters a collaborative approach to business development.
- Study permissions: In addition to business and employment opportunities, Innovator Visa holders are entitled to study in the UK, which allows them to enhance their qualifications and expertise while running their businesses.
- Streamlined monitoring: Compared to other visas, the visa includes fewer mandatory check-ins with endorsing bodies. This simplifies compliance and allows entrepreneurs to focus more on running their businesses
- Pathway to permanent residency: The Innovator Founder Visa provides a shortcut to apply for indefinite leave to remain after residing in the UK for just three years, provided all other eligibility criteria are met. This offers a clear path to permanent residency for entrepreneurs who wish to settle in the country long term.
The Innovator Founder Visa: strengths and weaknesses
Tech founder visas like the Innovator Founder Visa are springing up in many countries who wish to attract the talents of brilliant minds without the constraints of sponsored employment. However, they’re not perfect, and the IFV is no different.
1. UK Innovator Founder Visa: a progressive model
The UK’s Innovator Founder Visa is a good demonstration of a progressive approach to immigration. Notably, it includes an accelerated pathway to permanent settlement after three years of continuous residence, provided the visa holders remain actively involved in their businesses and meet growth-related eligibility requirements. This should help keep tech talent in the country.
2. Current performance and future outlook
Despite these incentives, the popularity and success of the Innovator Founder Visa remain under scrutiny. Recent figures from the Home Office, which combine the data from the now-defunct Innovator and the current Innovator Founder visas, show that only 500 visas were issued in the last business year.
We can only speculate as to why uptake has been so modest. But it may be down to the challenges of proving that an early-stage business is ‘scalable’. This is both a daunting and slightly nebulous stipulation that may deter potential applicants.
3. Ironing out the creases
Scalability is inherently difficult to quantify and verify. If the UK intends to continue attracting imaginative entrepreneurs, it needs to establish clearer requirements and more robust support mechanisms. These would help demystify the process and make the UK a more competitive destination compared to other jurisdictions with less stringent requirements.
4. Potential for growth
Despite these stumbling blocks, this visa category has significant growth potential. Each endorsing body provides indispensable support and guidance. If the visa strand’s conditions were fine-tuned, it is very possible that it might attract significantly more applicants.
Get professional assistance for your UK Innovator Founder Visa Application
Setting up a new business in the UK, relocating an existing business, or establishing a branch or subsidiary is no mean feat. We can ensure your transition into the UK market is as smooth and efficient as possible.
All you have to do is get in touch and let our team know how they can help you.
