Self-sponsorship: A Possibility for Business Professionals Interested in Working in the UK?

Navigating the establishment or expansion of a business in the United Kingdom can be a complex process for individuals who are not UK citizens.

Experienced entrepreneurs often view the Skilled Worker route as an unfavourable option, primarily due to its restrictive conditions, specifically the obligation to work exclusively with the sponsoring employer.

However, with the closure of the UK’s Tier 1 Investor and Entrepreneur routes, what are the alternatives for those interested in living and working in the UK?

“Self-sponsorship”

A common query among business professionals is whether they can sponsor themselves to work in the UK. It is important to note that self-sponsorship is not a distinct visa route per se, rather it represents a method for entrepreneurs to establish and manage their own business in the UK.

Before applying for a Skilled Worker visa, the business must first be registered in the UK and obtain a Skilled Worker sponsor licence.

To meet the requirements for a Skilled Worker sponsor licence, the company must provide a selection of corporate documents which evidence its genuineness and demonstrate its operating or trading presence in the UK.

The specific documents required vary based on the specific circumstances of the company; however, for a startup (a company that has been trading in the UK for less than 18 months), a corporate bank account with a bank registered by the Financial Conduct Authority and the Prudential Regulation Authority is mandatory. While there is no minimum revenue requirement, the account statements must evidence trading activity as opposed to solely reflecting setup costs.

As part of the licence application, the company will also need to evidence its ability to track and monitor sponsored workers responsibly, through its HR and compliance systems. The company will also need to appoint a trusted individual based in the UK, as a paid director, employee or office holder of the UK business as an “Authorising Officer." If this individual is not British or Settled in the UK, an additional person within the company appointed as a user on the licence who is British or Settled is required. 

It is important to note that this individual will ultimately be responsible for the licence and ensuring the company fulfils its duties as a licence holder. Business owners should be mindful that newly registered companies with little trading history in the UK have increased chances of being selected for a pre-registration audit by the Home Office.

Upon obtaining its sponsor licence, the business gains the ability to assign Certificates of Sponsorship, which enables the business owner to proceed with their application for a Skilled Worker visa (provided there is a genuine vacancy and commercial need for their role).

Can I register a UK company from overseas?

It is certainly possible to register a UK company and open a business bank account from overseas, but the requirements can vary depending on the bank and circumstances involved. For instance, some banks require a UK address, evidence of tax residency in the UK or an in-person visit to open the account.

Business owners should be cautious not to undertake substantive or productive work whilst in the UK as a visitor, but they may conduct general business activities (such as attending meetings, negotiating deals and signing contracts). If there is a UK-based director, it can often be simpler for this individual to set up a bank account. Engaging the services of a UK accountant is highly recommended to facilitate the smooth registration of a company.  

Will I need to be paid a salary whilst in the UK on a self-sponsored Skilled Worker visa?

Applicants must receive a salary from their company which equals or exceeds both a general salary threshold, the “going rate” for the occupation and a minimum hourly rate (whichever is higher).

On 04 December 2023, the UK government announced sweeping measures to tighten up the UK’s work visa system and reduce net migration, including a 40% increase in the baseline minimum salary level for Skilled Worker visas from £26,200 to £38,700 per year.

The changes are anticipated to come into effect on 04 April 2024, and applicants who apply before the rules change will not be subject to the new threshold when they change employment, extend or settle.

Business owners must factor these adjustments into their business plans and budget considerations. 

Alternatives to “self-sponsorship”

Expansion Worker

The Expansion Worker route is specifically designed for individuals looking to expand their overseas business to the UK. Where the Skilled Worker route requires evidence that the company is operating or trading in the UK, the only prerequisite for the Expansion Worker route is to establish a UK footprint for the company.

This option proves advantageous for those facing challenges in appointing an Authorising Officer or setting up a UK bank account from overseas. While it may be comparatively simpler from a set-up perspective, this route serves as an initial entry point to the UK, eventually requiring the applicant to transition into the skilled worker route within two years.

Innovator Founder

The Innovator Founder route enables overseas entrepreneurs to come to the UK to establish an innovative, viable and scalable business.

The application process is split into two stages; the first is to obtain endorsement from a Home Office-recognised body, and the second is the visa application itself.

The benefit of this category is that no sponsorship is required, and it can lead to settlement in the UK after just three years. However, the endorsement process is challenging and requires a comprehensive business plan outlining the innovative aspects of the business, appropriate funding, credentials, as well as a clear growth strategy.

Global Talent

The Global Talent visa route is dedicated to exceptionally talented and promising individuals in specific specialist sectors, including science, engineering, the humanities, medicine, digital technology or arts and culture.

As with the Innovator Founder route, applicants must first obtain endorsement from the relevant Home Office-approved body.

The Global Talent category is presently the most versatile option for the UK, providing successful applicants with the flexibility to work for any employer or establish their own company. Moreover, it provides the possibility of obtaining permanent residence in just three years if it can be evidenced that the applicant has worked in some capacity in their specialist field in the UK and therefore contributed to the advancement of the sector.

Looking forward

A core expectation of migration policy is that it has options in place to contribute to economic prosperity and find the next sources of global innovation. To remain competitive, the UK must focus its attention on attracting, admitting and retaining skilled migrants and high-potential entrepreneurs who will enable the country to reap the rewards of intellectual property and technological advancement.

While there are currently less clearly defined options for investors and entrepreneurs compared with a few years ago, there are still viable options available with the right strategic planning in place.

Need to know more?

Fragomen is available to assist businesses and individuals with their full range of immigration needs. For questions or further guidance, please contact Manager Alisa Bartholdy at [email protected] and Trainee Solicitor Amelia Haynes at [email protected].

This blog was published on 06 February 2024, and due to the circumstances, there are frequent changes. To keep up to date with all the latest updates on global immigration, please subscribe to our alerts and follow us on LinkedIn, X, Facebook and Instagram.