Entrepreneur Visa – Key legal changes and decisions from the summer of 2014

BY Author IN immigration law

 

On the 10^th July 2014 the Secretary of State introduced restrictions on in country applications from migrants on the Post Study Work visa and Tier 4 Student visa wishing to switch onto the Tier 1 Entrepreneur visa. These ‘Transitional arrangements’ became effective from the 11^th July and represent a significant restriction against speculative or fraudulent Entrepreneur applications. It is evident from these arrangements that the Secretary of State is beginning to phase out this route due to a perceived abuse.

In summary, the new rules maintain that applicants will only be eligible if they can demonstrate to the Secretary of State that they have been continuously engaged in business activity for a period of at least 3 months starting from before the 11^th July 2014. It is now mandatory for applicants to be registered as self employed or a director of a UK company, have a business bank account and also have at least 1 business contract. In practice these new rules target those applicants who establish their businesses for the sole purpose of being granted the Entrepreneur visa. This rule change will not affect those applicants who have genuinely been setting up their business during their time in the UK on a post study work visa.

When coupled with the expected restriction in appeals rights brought in by the Immigration Act 2014 which are speculated to commence in autumn 2014, it is essential for entrepreneurs to ensure that their initial application meets all the requirements outlined by the Home Office.

There has been several revealing decision from the Upper Tribunal on different aspects of the Entrepreneur Visa application

Ahmed and Another [2014] UKUT 365 (IAC)

This decision relates to whether a Judge can consider new evidence submitted to the Tribunal that was not initially submitted with the original application.

It was held that s.85A of the Nationality, Immigration and Asylum Act 2002 prevents a Judge from considering an additional documents at the appeal stage because the ‘genuine entrepreneur test’ relates directly to the points based system. This is an opinion not shared by the Secretary of State who generally considers genuineness to be a subjective element in the decision making process. For example, in practice some applicants are called for interviews or requested to submit further documents that are not prerequisites for a successful application. This decision could therefore be construed as being procedurally unfair upon applicants.

Shebl [2014 UKUT 216 (IAC)

In Shebl it was stated that when proving you have business contracts with third parties under paragraph 41-SD of Appendix A, the contract does not need to be set out in one single document. The Tribunal recognised that legally binding contracts can exist in many different forms and that applicants are permitted submit other documents pertaining to the existence of their contracts. It was emphasised that some sort of written documentation should still be provided.

Durrani [2014] UKUT 295 (IAC)

This decision focused upon bank letters which confirm that the an applicant has access to third party funding and the requirement that it must be stated that the bank is not aware of the funds being promised to any other third party apart from the applicant. It was maintained that there is no substantive argument that the requirement under paragraph 41 SD of the Immigration Rules produces an absurd result. Thus, all third party bank letters must contain this provision or the application could be refused.

 

Political Changes to Article 45

BY Author IN immigration law

The free movement of economically employed workers and their families is established in Article 45 of the Treaty of the Functioning of the European Union. Articles 46 and 48 allow the institutions of the EU, i.e. the Commission or Council, to enforce initiatives towards the member state which cooperate with the purpose of establishing an open market in labour. These initiatives, which are shown through Regulations or Directives, are further implementation; they micro-management specific areas of employment. Although, since 2006 and 2011 there have been two initiatives which have compiled all the rules of free movement of workers and expressed them in two main official papers. These are the Citizen Rights Directive and Regulation 492/11.

There is no single definition of the term ‘worker’ as it is considered an EU concept and therefore holds a large characterisation that is immune to constant language boundaries which a definition would provide. In Lawrie-Blum, the core of employment involves a person performing services, for a certain period of time, for and under the direction of another in return for which he receives remuneration. In Levin, any part time work whose income does not provide sufficient means of support will still be considered a worker providing the employment is genuine, not marginal or incidental and of an economical nature. In Trojani, the decision of whether someone was a worker was given back to the national courts but they were advised to consider whether the work was ‘capable of forming part of the labour market’.

However, since March 2014, the Department of Work and Pensions in the UK has implemented new rules which require a person to earn £150 per week, which works out to 24 hours per week at national minimum wage, for them to be concerned a worker. If they do not achieve this standard, the UK courts will have to consider whether the work is genuine and not marginal through the wider criteria of EU case law. However, the European Commission has stated this to be a breach of European law because it begins to define the definition of a worker from the amount they earn, there-by restricting who is considered as a worker. The Commission has asked for a detailed response of reasoning behind the application of the rule. As long as the this new rule does not replace the previous EU law but simply steers their attention to cases which need further examination, then the rule could be justified.

The EU courts further extended the definition to include job seekers or those searching for work. In the UK, migrants have up to 6 months to look for work before they will be asked to leave. This is confirmed in January 2014 by the Department of Work and Pensions. However, this is subject to the limitation that they can stay in the member state if they can show evidence of actively seeking employment with the ‘genuine’ chance of gaining work, as confirmed by article 14(4)(b) of Citizen Rights Directive. In the UK, the applicant will be asked to take a ‘Genuine Prospect of Work’ Assessment to prove this ‘real link’ to the economic labour market. However, there is no time limit specified for how long a person can retain the status of a worker whist job seeking. It could be believed that it is open ended but it is suspected that no job seeker allowance claims will continue beyond the point of 9 months.

Since citizenship was established, the rights for workers have increased. In the UK, the government is not obliged to give social assistance to job seeking migrants in the first 6 months. However, benefits of a financial nature which, are intended to facilitate access to the labour market cannot be regarded as constituting social assistance if a ‘real link’ between the jobseeker and the labour market of that Member State exists. Therefore, Job-seeker allowance can be given to migrants if they are genuinely looking for work.

This real link test has been used to further justify forms of residence requirements in Member States.Examples of this is the ‘habitual residence’ test in the UK which since January 2014, the EEA National or returning UK National will have to prove they have been living in the UK, the Channel Islands, the Isle of Man or the Republic of Ireland for the three months immediately before they are eligible to claim for Jobseekers Allowance. Also, since July 2014, EEA job seekers will not be able to claim either child benefit or tax credits until they have lived in the UK for three months. The UK government is trying to distinguish between the freedoms of workers to enter and boost the labour market and ‘benefit tourist’ who become a strain on the host member states economy.

Conversely, due to political pressure the coalition government have, since April 2014, implemented measures which halt all housing benefits for job seeking EEA nationals, even if they are receiving income-based jobseeker’s allowance. All these requirements establish a boundary for EEA nationals and could become a non-discriminatory set of rules which could prevent migrants from coming over to reside in the UK. The European Commission has branded these changes as illegal and contrary to Article 45. They have taken the first steps to judicial review and are waiting for a detailed response from the UK to explain their reasoning.

What would be the impact of the United Kingdom’s new rules regarding the UK’s Investor Visa?

BY Author IN immigration law

Nowadays, if an individual wishes to come to the United Kingdom for a business matter, he can apply for a Tier 1 visa. For the tier 1 visa, apart from an investment of non-less than £1,000,000, the applicant does not have to fulfil any other major requirement. As per example, he does not have to provide any proof of an appropriate/correct level in English or to show evidence of his commitment to create/invest in a business in the United Kingdom for the sake of it.

Nevertheless, the United Kingdom is not the only state to ‘sell’ entries (visas) for wealthy people to bail out its accounts. Indeed, many others share this principle. To start with, the USA’s EB-5 visa presents a way of obtaining a green card for foreign nationals who invest money in the United States (either 1,000,000$ in any field or half of this amount in a Targeted Employment Area) along with the creation of at least 10 jobs. Not far from it either, Australia’s Investor Visa requires an investment of approximatively £825,000 and can be renewed for an indefinite leave after a few years if the money has been invested as due, and Maltese Citizenship can be obtained by Non-Refundable Contribution of approximatively £580,000. Dubai as well is starting to be interested by this mostly financial type of visa, as declared recently by the government.

United Kingdom’s new rules regarding the UK’s Investor Visa aim to converge the financial resources to fields in real need of it. Indeed, the money invested in the United kingdom so far by the Tier 1 Investor visas didn’t profit the United Kingdom itself as much as the applicants. Therefore, the new rules tend to resemble at some point the USA’s EB-5 visa, favouring the investments to be in certain fields that were given priority by the government in the matter of bailing out the main sectors in the constant need of grants, such as schools, charities, construction industry as to be able to fully profit of this income. Following this idea, these new rules should benefit the United Kingdom’s economy and migration.

Based on an objective point of view, the new rules brought by the reform sound fair and legitimate as well as necessary for this visa to fulfil its meaning. Yet, on a more subjective look, these new rules favour more the United Kingdom Government as it has more control over the investments, giving therefore less choices/freedom to the applicants. Thus this reform gets the United Kingdom’s Tier 1 investor visa closer to the USA’s EB-5 visa requirements though without its major benefit that would have been an equivalent of the Green Card.

Overall, the new reform’s rules will readjust the balance between the UK and the applicant’s profit, though mainly making up on the lack of benefit for the United Kingdom.