seasky wrote: ↑Wed Mar 14, 2018 11:21 am
As a small UK business owner needing investment £200K could be useful and substantial for you. I can think of some pitfalls (and I do not believe this has been significantly discussed on this forum. I hope this thread is useful to other).
First put yourself in the shoes of the "investor" she would want to make sure that she gets the T1 visa, extension and ILR. So may put limitations on you that could be hard to keep up with (what if your business needs, over 5 years are such that you need to lower your headcount? that would kill their visa)
She would join you as a director with all the legal issues of control around that. What if you see things differently over the 5 years? Who decides?
Would she want a salary for her ongoing activities? will she be involved day to day (which for the right person could be very valuable to your business)
She would want an equity stake (not necessary for t1e per se, but investment is investment)
You do not control the t1e rules and regulations and would be hard for you to commit that she will get visa (due to changes and due to business realities)
In short make sure you are getting into bed with someone you want as your investor and iron out upfront all the issues that could happen. Also remember if the money is only to come after initial visa is granted that could mean 2 months of assembling paperwork (together) and even up to a year of waiting....
Especially when joining an existing business there may be more scrutiny by HO.
I was approached 3 times to "invest" in my business for t1e. One was clearly not relevant (just wanting to get their brother to UK and had no other visa route). One had an interesting connection to my business so had a discussion. The third was actually a Mayfair consulting company that does exactly this, connecting t1e prospects to existing businesses.
read bellow the excerpt from the MAC report and assimilate the situation.
Role in the running of the business
8.49 The current requirement that a Tier 1 (Entrepreneur) migrant must play an active role in the running of their business does not appear to be sufficient to ensure that, in addition to bringing their financial investment, Tier 1 (Entrepreneur) migrants are bringing their skills and labour to make their business a success. This means that, in some cases, the Tier 1 (Entrepreneur) route is used by some high net worth individuals as a lower cost alternative to the Tier 1 (Investor) route. A sizeable proportion of recent intake under the route has been migrants who invest £200,000 or more into an established business that requires investment. This is generally desirable economic activity and is consistent with the current objectives of the route for those cases where the entrepreneur’s skills and connections are of value to the business in addition to their investment.
8.50 However, where the migrant is purely bringing investment, rather than skills or labour, there is an argument that this activity is similar in nature to that intended for the Tier 1 (Investor) visa. The Government may wish to consider whether this activity should continue under the Tier 1 (Entrepreneur) route or whether it should be incorporated into the Tier 1 (Investor) visa.
8.51 If the Government chooses to restrict this ‘Investor-lite’ activity, we suggest that Tier 1 (Entrepreneur) migrants be required to demonstrate, particularly at the point of extension, that they will be or have been involved in the day to day running of the business.
