Investment

[confused90]

Good-Evening,

Before everyone advises me to read the policy guidance or speak to an accountant about what is an investment, please read the following.

Many entrepreneurs are confused, and so are the accounts about what an investment is according to UKBA.

Investment can be in the form of shares held, or in the form of working capital.

If I purchase goods from a UK business and hold it as inventory, before selling them off... would that constitute an investment?
Or if I purchase goods, sell them on credit and increase my accounts recieveables would that constitute an investment?

I've got mixed answers from accountants, and solicitors have advised me to buy an office and a warehouse to show that the money is spent. But I'll be needing the money for the working capital, and not the fixed asset.

My view regarding the investment is, that as long as I spend the money on business related things be it goods purchased and sold later and paying wages to my employees is constituted of investment, as 'MY' money is being brought in from abroad into the UK and injected into the UK economy.

Please give your views on this, it shall be helpful for all

Thank-You

[confused90]

49 views, and not even one reply or different views?

Wondering how the other entrepreneurs are managing the investment, if any

[sky_rise]

49 views, and not even one reply or different views?

Wondering how the other entrepreneurs are managing the investment, if any

i actually would be happy to know the same answers!

i bet in 2 years time this Qs will be a hot topic

1st year after getting visa - celebrating heavily
2nd year -dealing with post-hangover
3rd year - work begins

we must have a separate sticky discussion for extension

[confused90]

49 views, and not even one reply or different views?

Wondering how the other entrepreneurs are managing the investment, if any

i actually would be happy to know the same answers!

i bet in 2 years time this Qs will be a hot topic

1st year after getting visa - celebrating heavily
2nd year -dealing with post-hangover
3rd year - work begins

we must have a separate sticky discussion for extension

If we just work in the third year, we are going to have a tough time fending for ourselves in the first two years

[rehan01]

As far as I know salaries doesn't count as investment.

anything you invest in term of buying good or equipment for your office setup or buying property for commercial use only than it will count towards investment.

I am not sure about buying good and holding inventory etc wait for experts opinion on this.

typical example ... if you buy a car worth £30,000 on business name will it be class as investment ?

regards

Good-Evening,

Before everyone advises me to read the policy guidance or speak to an accountant about what is an investment, please read the following.

Many entrepreneurs are confused, and so are the accounts about what an investment is according to UKBA.

Investment can be in the form of shares held, or in the form of working capital.

If I purchase goods from a UK business and hold it as inventory, before selling them off... would that constitute an investment?
Or if I purchase goods, sell them on credit and increase my accounts recieveables would that constitute an investment?

I've got mixed answers from accountants, and solicitors have advised me to buy an office and a warehouse to show that the money is spent. But I'll be needing the money for the working capital, and not the fixed asset.

My view regarding the investment is, that as long as I spend the money on business related things be it goods purchased and sold later and paying wages to my employees is constituted of investment, as 'MY' money is being brought in from abroad into the UK and injected into the UK economy.

Please give your views on this, it shall be helpful for all

Thank-You

[Christianoronaldo]

You can invest your money in following two ways:

1. Share Capital

This means you'll transfer funds from your personal account to your business account against the shares issued.

Legally investment is completed; once the money is transferred from your personal account to your business account against share capital. The money will now belong to the business and it is upto the business to decide how to use the money. It can be spent on working capital, day to day business expenses or the capex items.

2. Director Loan

Rather than issuing shares you can decide to invest in the form of director loan. This type of investment will only be acceptable if you have a legal agreement with your business stating that your loan is subordinated in favour of external creditors.
Again investment is completed; once the money is transferred in business account and there exists a legal agreement stating director loan is subordinated in favour of external creditors. The money will now belong to the business and it is upto the business to decide how to use the money. It can be spent on working capital, day to day business expenses or the capex items.

[confused90]

You can invest your money in following two ways:

1. Share Capital

This means you'll transfer funds from your personal account to your business account against the shares issued.

Legally investment is completed; once the money is transferred from your personal account to your business account against share capital. The money will now belong to the business and it is upto the business to decide how to use the money. It can be spent on working capital, day to day business expenses or the capex items.

2. Director Loan

Rather than issuing shares you can decide to invest in the form of director loan. This type of investment will only be acceptable if you have a legal agreement with your business stating that your loan is subordinated in favour of external creditors.
Again investment is completed; once the money is transferred in business account and there exists a legal agreement stating director loan is subordinated in favour of external creditors. The money will now belong to the business and it is upto the business to decide how to use the money. It can be spent on working capital, day to day business expenses or the capex items.

And also in both the methods, can the money be transferred bit by bit? And the bits invested in the working capital and day-to-day-business expenses, and that shall be counted as investment?

[Christianoronaldo]

You can do it bit by bit. But keep in mind following things:

1. Share capital
In case of share capital; every time you issue new shares and invest money in the business; you'll have to do return of allotment.

2. Director Loan
Instead of having various director loan agreements for various amounts transferred to your business; just do one agreement which state the timing and amounts of different tranches of the director loan making up a total of £50,000 or more.

[confused90]

You can do it bit by bit. But keep in mind following things:

1. Share capital
In case of share capital; every time you issue new shares and invest money in the business; you'll have to do return of allotment.

2. Director Loan
Instead of having various director loan agreements for various amounts transferred to your business; just do one agreement which state the timing and amounts of different tranches of the director loan making up a total of £50,000 or more.

That makes so much sense, Thank-You

But for extension/ILR after 3 years, the UKBA requires only personal bank statement and business bank statement to prove investment.
I believe they only want to see that the investment funds are being transferred from the personal account to the business account, and they don't need to see the share certificate or the director's loan.

Any views on this?

[Christianoronaldo]

It is better to show your personal bank statement and business bank statement but this is not the requisite evidence stated in policy guidance. The requisite documents include:

Accountant letter confirming investment;
Audited or unaudited Financial statement showing amount of share capital and name of shareholders;
Share certificates if financial statements don't show name of shareholders

you may also include following additional documents:
Personal and business bank statement
Annual return showing statement of capital and name of shareholders
Certified copy from companies house showing number of alloted and paid up shares and name of share holders.

I guess you have accountancy background and understand all the above documents.

[rahulsingh1]

Hi Confused90 - Can you please guide as as to where in the Guidance or Part6A or Appendix-A, asks for personal bank account or business bank account statement for proof of investment ? I haven't read that anywhere.

It only asks for audited/unaudited accounts and accountant certificate. Plus director loan agreement or share certificate depending on the way you have invested.

You can do it bit by bit. But keep in mind following things:

1. Share capital
In case of share capital; every time you issue new shares and invest money in the business; you'll have to do return of allotment.

2. Director Loan
Instead of having various director loan agreements for various amounts transferred to your business; just do one agreement which state the timing and amounts of different tranches of the director loan making up a total of £50,000 or more.

That makes so much sense, Thank-You

But for extension/ILR after 3 years, the UKBA requires only personal bank statement and business bank statement to prove investment.
I believe they only want to see that the investment funds are being transferred from the personal account to the business account, and they don't need to see the share certificate or the director's loan.

Any views on this?

[rahulsingh1]

Hi Rehan- your information is not completely correct.
Paying salaries to your employees is an expense of the company. And hence an investment towards building the company.

For UKBA though just 'Your' salary/compensation will not be counted as investment.

Please let me know if I have missed anything here.

As far as I know salaries doesn't count as investment.

anything you invest in term of buying good or equipment for your office setup or buying property for commercial use only than it will count towards investment.

I am not sure about buying good and holding inventory etc wait for experts opinion on this.

typical example ... if you buy a car worth £30,000 on business name will it be class as investment ?

regards

Good-Evening,

Before everyone advises me to read the policy guidance or speak to an accountant about what is an investment, please read the following.

Many entrepreneurs are confused, and so are the accounts about what an investment is according to UKBA.

Investment can be in the form of shares held, or in the form of working capital.

If I purchase goods from a UK business and hold it as inventory, before selling them off... would that constitute an investment?
Or if I purchase goods, sell them on credit and increase my accounts recieveables would that constitute an investment?

I've got mixed answers from accountants, and solicitors have advised me to buy an office and a warehouse to show that the money is spent. But I'll be needing the money for the working capital, and not the fixed asset.

My view regarding the investment is, that as long as I spend the money on business related things be it goods purchased and sold later and paying wages to my employees is constituted of investment, as 'MY' money is being brought in from abroad into the UK and injected into the UK economy.

Please give your views on this, it shall be helpful for all

Thank-You

[my_friend]

Any expense that is related to running day to day activities of your business is counted towards your investment...

If your buying goods for your business in an option to sell it later, this is also a business investment...

If your paying salaries to your employees that is also a business investment, however be advised that any remuneration related to you is not counted towards investment...

And its only the accountant certificate, unaudited/audited accounts and the way your investment has been done, be it either through a directors loan or share capital it should be justified and be visible clearly for the immigration officer to see, these are the things required when applying for extension....

please correct me if i am wrong...however...

i have created a new topic ...EXTENSION APPLICATION PLEASE JOIN HERE thread so we can all post topics related to extension in one place and discuss...

thanks

[confused90]

So for example, if my 3rd party sponsors transfers £50K into my business bank account, I can get shares issued for that capital.

Then I can buy goods worth £50K, export them outside UK and my company earns a profit of about £2k. Will this be counted as my investment is done?

Then I can get some more funds to manage my day-to-day running of the business without worrying about the investment criteria?