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UNITED KINGDOM: Open and Ready for Business?

A Statement of Changes in Immigration Rules, detailing changes that came into force on April 6, 2011, was laid before Parliament on March 16, 2011. Among other immigration categories, the statement announced changes to the Tier 1 category of the Points-Based System as expected, and in particular to the Tier 1 (Investor) and Tier 1 (Entrepreneur) categories, but with more changes than anticipated. A definite Tier 1 (Exceptional Talent) category was established and so the Tier 1 category seems to have been redesigned in accordance with recommendations published by the Migration Advisory Committee (MAC) in their report of November 2010: the Tier 1 (Investor) and (Entrepreneur) categories were changed with the aim of attracting direct foreign investment as well as creating jobs, and the Tier 1 (Exceptional Talent) category seeks to attract the brightest and the best, a recurring theme throughout Parliament's amendments.

On March 22, 2011, changes to the Tier 4 category of the Points-Based System were announced by Home Secretary Theresa May. The Tier 4 category, which deals with non-European Economic Area student migrants, will be redesigned by April 2012 with the stated goal of serving the brightest and the best students. The Home Secretary has also promised a new entrepreneur route aimed at students that would allow those with business ideas and a potential to create wealth an opportunity to remain in the UK after graduation.

These changes seem to be consistent with the Coalition Government's objective of supporting a private-sector-led economic recovery while reducing net migration from hundreds of thousands to tens of thousands. However, while they do send the message that the UK is open and ready for business, Britain must be careful not to favor only those willing to invest large sums in the country or those who are ready to develop businesses, and should provide ways for those who will contribute to UK economic recovery in other ways to enter the country also.

Tier 1 (Investor)

Beginning April 6, 2011, migrants who apply under the Tier 1 (Investor) category of the Points-Based System enjoy increased flexibility in their status and require less time to be able to settle in the UK. Initial leave is granted for three years and four months. After investing £5 million in the UK, an investor may settle in the country after three years, and after an investment of £10 million, after two years, both significantly shorter periods of time than the current minimum of five years required for settlement. In addition, investors are permitted to be absent from the UK for up to 180 days in any 12 months without jeopardizing their right to settle, which is double the current limit of 90 days.

Tier 1 (Entrepreneur)

Tier 1 (Entrepreneur) migrants are also granted an initial leave of three years and four months, with a potential extension of two years and settlement after five years. Entrepreneurs are now able to accelerate settlement after three years in the UK, however, if they generate a turnover of £5 million or create ten jobs in a three-year period. As with investors, entrepreneurs are permitted absences from the UK for up to 180 days in any 12-month period. Most important, while the standard investment threshold will remain at £200,000, businesses that the UK Border Agency considers as "high-potential businesses" may enter the country with £50,000, as long as the sum is provided by registered venture capitalists regulated by the Financial Services Authority, registered UK entrepreneurial seed funding competitions, UK Government Departments, or a combination of the three. Entrepreneurs may enter the UK with business partners if they have access to joint funds.

Prospective Entrepreneurs

Prospective entrepreneurs may enter the UK with a new type of visitor visa designed especially for those looking to set up businesses in the UK. Unlike those who enter the country with a business visitor visa, prospective entrepreneur visa holders are permitted to apply for a Tier 1 (Entrepreneur) entry clearance or visa while they are in the UK.

Tier 1 (Exceptional Talent)

As of August 9, 2011, the UK Border Agency (UKBA) started accepting applications for the new Tier 1 (Exceptional Talent) Category. Tier 1 (Exceptional Talent) is for those foreign nationals who are "internationally recognized as world leaders or potential world-leading talents in the fields of science and the arts." During the first year of this category, there is a limit of 1,000 grants of entry clearance (700 in science and 300 in the arts), and the limits will be reviewed by April 2012. These foreign nationals will not require employer sponsorship but will need a Unique Reference Number (URN) from the UK Border Agency and a nomination from a Designated Competent Body (DCB) before applying for the entry clearance visa at the UK consular post in their country of residence. The Designated Competent Bodies and their allocations are:

  1. The Royal Society: 300 nominations;
  2. The Arts Council England: 300 nominations;
  3. The Royal Academy of Engineering: 200 nominations; and
  4. The British Academy: 200 nominations.

There will be a cap on the number of visas available in the Tier 1 (Exceptional Talent) category, with the UK Border Agency allotting a total of 1,000 spots between August 9, 2011, and April 5, 2012. The first 500 are available for use between August 9 and November 30, 2011, and the second 500 between December 1, 2011 and April 5, 2012. The UK government will reassess the need for additional visas in March 2012.

Tier 1 (Exceptional Talent) visa holders will initially be permitted to stay in the UK for up to three years and four months. They will be able apply for an extension, allowing them to stay for two additional years. If these individuals complete five years of residence in the UK under this status, they will qualify for Indefinite Leave to Remain (permanent residence).

Tier 4

Changes to the Tier 4 category, designed for student migrants, will be implemented starting April 2012. The category will be changed to cater to and "protect" only the best and brightest students, in the words of the Home Secretary. In her statement on March 22, 2011, Theresa May expressed her goal of making the student category a route through which migrants would come to the UK "for a limited period," "to study, not work," and to "make a positive contribution" to the UK.

To realize this goal, more responsibilities will be placed on both academic institutions and students. Beginning in April 2012, institutions must be classified as "Highly Trusted" sponsors and be accredited by statutory education inspection bodies by the end of 2012 before they can sponsor students. Students will lose their right to work unless they are at universities and publicly funded further education colleges and will no longer be able to bring dependents unless they are postgraduate students at universities or government-sponsored students (currently all students on longer courses are permitted to bring dependents). The overall time that a migrant can spend in the UK on a student visa will also be reduced for some. While the limit will remain at three years for lower-level courses, it will be reduced to five years at higher levels (at present, a limit for study at or above degree level does not exist). Students will also have to demonstrate a proficiency in English at a higher level: at the B2 (upper intermediate) level instead of at the B1 (lower intermediate) level.

The Tier 1 (Post-Study Work) category, which will close in April 2012, allows students to seek employment in the UK for two years after the end of their courses. Students may find alternative routes to stay in the UK after graduation if they receive an offer of employment (and apply under the Tier 2 category) or if they qualify as "innovative student entrepreneurs"; the Home Secretary has expressed plans to create a new entrepreneur route for students with business ideas and plans to create wealth in the UK.

Conclusion

Through changes in the Tier 1 (Investor) and (Entrepreneur) and Tier 4 categories as well as plans to establish Tier 1 (Exceptional Talent), a prospective entrepreneur visitor visa, and a new entrepreneur route for students, the UK seems to be sending quite an eager message that the country is open and ready for business, at least to those who qualify under the changed Immigration Rules. However, if Britain is to live up to the Coalition Government's aim of a private sector-led economic recovery while also reducing net migration, it must be cautious that the Immigration Rules do not merely favor those with large sums to invest, those who have been internationally recognized for their endeavours, or even those who show promise to do so. It must be especially cautious not to penalize legitimate migrants who wish to enter the UK to contribute to the country for the reason that they are unable to demonstrate significant wealth or the clear potential to create wealth at the time of their application, such as recent graduates. Universities and employers have already noted that many talented students choose to study and work in the UK following their studies rather than in the U.S., Australia, or Canada because of the country's unique immigration system. Britain must not be blinded by the simple goal of reducing net migration, but should consider who will truly and most significantly make a contribution to UK economic recovery, and provide ways for them to enter the country.

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