When applying for leave to enter or remain in the UK under the Tier 1 Entrepreneur category, most applicants must demonstrate that they have access to at least £200,000 and that these funds are available to them to invest in a new or established UK business.
It is possible for the funds to be provided by a third-party business or individual who must promise to make them available to the applicant. However, when relying on third party funding, the Home Office’s evidential requirements are extremely complex and burdensome and many applicants experience difficulties in obtaining the mandatory evidence in the format specified by the Home Office.
We frequently advise applicants on these requirements and maintain a 100% success rate for Tier 1 Entrepreneur applications. Below we have provided an overview of this complex issue.
Third party funding Tier 1 Entrepreneur: Required documents
When relying on third party funding, the main documents required as evidence of the investment funds are:
- a declaration from the third party holding the funds;
- a legal declaration confirming the validity of the signatures in the third party declaration;
- a letter from the bank in which the funds are held; and
- a legal declaration confirming the validity of the signatures in the letter from the bank.
We generally find that the declaration from the third party along with the legal declaration confirming the validity of signatures is fairly simple to arrange. This requires the third party to sign their declaration in front of a lawyer.
The requirement for a legal declaration confirming the validity of signatures in the letter from the bank was introduced in January 2018 and can be found within Appendix A of the Immigration Rules (HC 395, as amended). This sets out the requirement for:
“A letter (or letters) from one or more legal representatives, who are not the applicant or the third party, which confirm(s) that all letters and declarations in (ii)-(vi) and (viii) (where required) contain the genuine signatures of the required signatories. The letter(s) must clearly show the registration or authority of the legal representative to practise legally in the country where the third party or the money is.”
Practically, this means that the letter from the bank will need to be signed in front of a lawyer in order for a lawyer to then produce the required declaration. Understandably, this can prove difficult.
When acting for an individual who will be relying on third party funding for their Tier 1 Entrepreneur application, we will often make contact with the third party’s bank at an early stage in order to determine whether the required documents can be produced in the specified format. If the documents cannot be produced, then the entrepreneur will need to consider alternative options.
Third party funding Tier 1 Entrepreneur: Alternative options
The simplest alternative is usually for the third party to transfer the funds to the applicant directly. If these funds are then held by the applicant in a UK bank account for a period of at least 90 days, the applicant can then produce only their bank statements as evidence of the funds.
This will obviously cause some delay to the application as the funds must be held for 90 days. However, where an applicant does not plan to make an application immediately and the third party is willing and able to transfer the funds, this is a much simpler option.
Alternatively, if the applicant is joining an existing business, it is often possible for the third party to invest on their behalf by way of a director’s loan or equity. We provide detailed advice on these options.
Third party funding Tier 1 Entrepreneur: Conclusion
An application that does not meet the Home Office’s requirements precisely will be refused and care must be taken therefore when preparing the application. The global refusal rate is around 50% for Tier 1 Entrepreneur applications but we maintain a 100% success record.
If you would like to discuss the financial requirement for this category or need assistance with any other aspect of an application, please contact us.