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5 min read
UK for eXtrepreneurs
United Kingdom ranks remarkably well on the ease of doing business for its conducive corporate governance standards, pro-innovation regulations, robust business infrastructure, liberal labor laws and promising government support.
While the country is home to nearly 44 unicorn companies, one in every five are being led by foreign founders and approximately 48% of UK incorporated companies have foreign CEOs. With the indulged diversity amongst the business leaders and entrepreneurs along with the holistically robust ecosystem, and idyllic geographical placement, UK is considered as one of the most preferred destinations for eXtrepreneurs aiming to have a global presence.
UK Startup Ecosystem
With a strong ecosystem of over 191 VC firms, and 274 global accelerators & incubators, UK is one of the top performers in terms of the availability of fundraising opportunities and required stimulants for launching and scaling businesses of different sizes.
The average fundinground for early-stage startups is $ 0.24 million and for Series A, B & C is$7.23 million, $12.05 million and $31 million, respectively. Remarkably, in thelast three years UK has welcomed more than 2 million company incorporations.
To know more, download our quick read on “UK Startup Ecosystem”
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UK Company Formation
The crucial choice for a small or large corporation aiming to expand to the UK, is choosing the right type of entity structure as it potentially impacts the taxes, and further expansion plans of the organisation.
UK has two popular types of entity classifications for eXtrepreneurs viz.LLP & Ltd. While the eXtrepreneurs looking to raise capital and list their ventures in the future, find it feasible to incorporate a Ltd., those who are looking for growth financed through private sources, generally go with LLP.
To know more about Company Incorporation in the UK, Download our “Company Formation in the UK ”
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Overview
The UK Innovator Founder Visa was launched on April 13th, 2023. It replaces the two popular categories of Visas for founders viz. the Innovator Visa and the Start-Up Visa by providing additional flexibilities to the applicants. It offers an opportunity for entrepreneurs who have a original business idea and are looking to establish their business in the UK. The Innovator Visa had witnessed applications from across the globe, with India and China leading the charts, and were accountable for 18% and 17% of the applications, respectively. Till March 2022, 654 Innovator Visas had been approved by the UK Home Office. However, with the surge of applicants, there was a decline in the approval rate, with Pakistan facing the highest refusal rate of 39.8%, followed by Iran at 38.1%, and India at 24.5%. Despite of the surge, founders of China were able to meet the eligibility criteria with comparatively a low refusal rate of 14.5%.
Highlights
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Additional employment may be pursued by the applicant outside the business they run which can be:
A job which is in a role requiring a skill level of RQF Level 3 or above (this does not mean you need to have this qualification, but the job must be pitched at this level)
2
No minimum investment requirement (although sufficient funds to set up the business and deliver the business plan must be available for investment)
3
Dependant family members can join the main applicant including spouses/unmarried partners and children under the age of 18
4
One of the most streamlined and shortest pathways to Indefinite Leave to Remain (ILR) in the United Kingdom
Eligibility
1
No minimum investment requirement by the founder- level of funds available must be sufficient to deliver the business plan
2
Business idea must be innovative, viable and scalable
3
Endorsed by an approved endorsing body in the UK
4
The language requirements i.e., CEFR Level B2 must be met
5
The applicant must have at least £2070 maintenance funds for a family of 4
Renewal
After 3 years of Innovator Founder Visa, depending upon the criteria mentioned below, the applicant can either apply for a three-year renewal or an Indefinite Leave to Remain (ILR) in UK
The conditions for a three-year renewal are mentioned below:
- The applicant meets the eligibility requirements.
- Successfully pass two checkpoints after 12 and 24 months where the endorsing body must be satisfied that the business is scaling credibly, and significant progress is made towards delivering the business plan.
- The applicant is still running a business in UK or wants to set up a new one.
- The business or business idea needs to be reassessed by an endorsing body.
- The applicant must also have sufficient funds (as mentioned earlier) to support himself and his dependents.
Note: There is no limit to the number of renewals. However, every single time, all conditions must be fulfilled.
Permanent Status
Criteria to be met for ILR [at least 2]:
- Investment of £50,000 in the business and its furtherance
- Doubling of customer base in the most recent 3 years and is currently higher than the mean no. of customers for other UK businesses offering comparable main products or services.
- Significant Research and Development resulting in application for protection of intellectual property in the UK
- A minimum annual gross revenue of £1 million in the last full year.
- Generating minimum annual gross revenue of £500,000 in the last full year with at least £100,000 from exporting overseas.
- Creation of jobs
✓ created the equivalent of at least 10 full time jobs for settled workers or
✓ The equivalent of at least 5 full time jobs for settled workers each of which has a mean salary of at least £25,000/year.
Process and Timelines
Overview
Highlights
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Eligibility
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Renewal
Permanent Status
Process and Timelines
Overview
The UK Start-up Visa Program came into force in 2019, offering an opportunity for entrepreneurs with limited experience but scalable business propositions. Though the program is fairly new among the existing programs, it is successfully catching momentum and gaining traction as the application count of 234 in 2019 has exceeded to 581 in the first three quarters of 2022. With 1453 approved applications from the total of 1740 applications, the program has an approval rate of over 80%. Comparatively, the program is distinguished from the UK’s Innovator Visa on certain factors including no minimum investment criteria and simpler endorsement process. While the former is only issued for two years, the applicants can convert the Start-up Visa to the Innovator Visa category, on obtaining endorsement from the relevant endorsing bodies. Notably, the endorsement bodies for UK Start-up Visa are different from the Innovator Visa category.
Highlights
1
No Minimum Investment required
2
Flexibility to be employed in another business
3
Family coverage includes spouse/common-law partner and dependent children
4
No age-based restrictions or point-based qualifications
Eligibility
1
Businesses must have the scope for innovation, viability, and scalability
2
Endorsed by an approved endorsing body in the UK
3
The language requirements i.e., CEFR Level B2 (IELTS 5.5 in reading, writing, listening, and speaking) must be met; and
4
The applicant must have at least£2070 settlement funds for a family of 4
Renewal
Permanent Status
Process and Timelines
Our exclusive webinar with UKES, one of the three Endorsing Bodies
DG Country Comparison ToolTM
CompareQuick peek at the top countries for eXtrepreneurs.
This tool compares the top nations inviting eXtrepreneurs on over 40 vital parameters to provide a holistic view and a comprehensive perspective of the Entrepreneur mobility options, the start up ecosystem and the policy benefits, to be availed.