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Launch of the Innovator Founder visa route

Posted on 14 April 2023

On 13 April 2023, the UK launched a new Innovator Founder visa route aimed at individuals seeking to establish a new business in the UK.

In line with the UK Government's wider 'UK Innovation Strategy', this new route replaces the "Innovator" and "Start Up" routes, with the aim of providing greater flexibility and more streamlined eligibility criteria in an effort to attract entrepreneurial talent to the UK.  

Under the Innovator Founder route, there is no longer a £50,000 minimum funds requirement, which was previously applied under the Innovator route. In addition, Innovator Founders are not restricted to working solely for the business they have set up in the UK, and are permitted to take up secondary employment, provided the role meets the relevant skill threshold (namely, not less than RQF level 3 (meaning A-level or above)).

Below we provide an overview and analysis of the new route, covering who the route is aimed at, the eligibility requirements and key changes from previous related routes.

Who is the new route for?

The Innovator Founder visa is designed for individuals seeking to establish a business in the UK based on an innovative, viable, and scalable business idea they have generated, or to which they have significantly contributed. The applicant must have a key role in the day-to-day management and development of the business they set up in the UK.

Applicants can either be the sole founder of the business or apply as a member of an entrepreneurial team. In all cases, however, the applicant must have made a significant contribution to creating the original business plan and be part of the founding team. Applicants cannot apply to join a business that is already trading.

The applicant's spouse/civil partner or unmarried partner along with any children under the age of 18 may apply to come to the UK as their dependants.

What are the requirements?

A key requirement of this route is that the applicant must be endorsed by a Home Office approved Endorsing Body.

The Endorsing Body will assess the business according to the categories of innovation, viability, and scalability. As part of its assessment, the Endorsing Body will consider various factors, such as if the applicant has a genuine, original business plan that meets market needs, whether they already have, or are developing, the required skills to run the business, and if there is evidence of the potential for job creation and growth into both national and international markets. If the business meets the relevant requirements, the Endorsing Body will issue the applicant with an endorsement letter which the applicant will then submit with their visa application.

Unless an exemption applies, applicants must also demonstrate English language ability at level B2 of the Common European Framework Reference (upper-intermediate). Applicants must also show that they have sufficient funds to maintain and accommodate themselves, and any dependents, in the UK without needing to access public funds.

What are the key changes from the Innovator Route?

The key changes include:

  • Removal of the £50,000 investment – Under the Innovator visa, applicants were required to show that they had at least £50,000 available to invest in their business. This is no longer required, but if the business plan requires significant funds to start the business, then Endorsing Bodies may still require applicants to evidence that they have the necessary funds available.
  • Minimum two contact points – Applicants were previously required to stay in contact with their Endorsing Body at six-, 12-, and 24-month checkpoints. The Innovator Founder visa now only requires a minimum of two contact points throughout the three-year visa. This should reduce administrative concerns and allow applicants to develop their business under a less pressured timescale.
  • Secondary employment allowed – Applicants were previously only allowed to work for businesses that they established in the UK. The Innovator Founder visa allows applicants to undertake employment outside of their business, as long as this employment is sufficiently skilled (i.e. at RQF level 3 or above) and the applicant maintains an active key role in the day-to-day management and development of the business.

Can the Innovator Founder Route lead to Indefinite Leave to Remain ("ILR")?

Yes, the applicant may be eligible to apply for ILR after three years in the UK as an Innovator Founder, depending on the success of the business. The success will be assessed using factors such as job creation, annual revenue, engagement in significant research and development activity and applications for intellectual property protection in the UK. It will also be necessary to meet other criteria for ILR, including residency requirements in the UK, and knowledge of life and language requirements.

Do the changes go far enough?

The Innovator Founder visa appears to address some of the issues connected with the Innovator visa. For example, the reduction in the number of mandatory check-ins and the relaxation of the restriction on secondary employment could make the visa more appealing to entrepreneurs who seek less administrative load and who wish to earn additional income while setting up their business in the UK.

In addition, going forward, it appears that Endorsing Bodies will be restricted to charging a flat fee of £1,000 for considering an applicant for endorsement and will not be able to request equity as part of the consideration process. This is a welcome move. These changes, along with the scrapping of the £50,000 investment requirement, could help to make the visa more widely attractive.

However, one of the major barriers to obtaining an Innovator visa was the endorsement process. Further simplifying the endorsement criteria and making them more transparent could help to attract more applicants and investment into the UK. Moreover, other factors, such as the high threshold for innovation, and the equally high threshold for business success which must be met to qualify for ILR will likely continue to play a substantial role in determining the success of the Innovator Founder route. It remains to be seen if the recent changes will be enough to encourage a significant increase in the utilisation of the category.

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