Understanding the Tier 1 Entrepreneur Visa Route Closure
The closure of the Tier 1 Entrepreneur visa route marked a significant shift in UK business immigration policy. The official Home Office guidance confirms the route closed to new applicants on 29 March 2019, though existing holders can still apply for extensions and settlement. At Connaught Law Limited, we understand the challenges this has created for existing visa holders and overseas entrepreneurs planning UK business ventures. This comprehensive guide explains the current position, critical deadlines for existing holders, and available alternatives for new applicants. The route closure formed part of the government’s broader immigration strategy, replacing the entrepreneur route with more targeted alternatives including the Innovator Founder visa. The Home Office cited concerns about the genuine entrepreneur test and the need for more innovative, scalable business proposals as key factors in this decision. The Tier 1 Entrepreneur route was introduced in 2008 to replace the Business Person and Innovator routes. During 2008-2017, a total of 21,727 main applications were successful, with 6,413 entry clearance grants, 14,495 extensions, and 819 settlements. However, success rates declined significantly after policy changes, contributing to the route’s eventual closure.Table of Contents
Current Status of the Tier 1 Entrepreneur Route
What Remains Open
Despite the closure to new Tier 1 Entrepreneur applications, certain aspects of the route remain available for existing holders:
- Settlement applications remain available until 5 April 2025 for entrepreneurs who have completed five years’ continuous residence in the UK under this route
- Limited extension applications for those who held Tier 1 Graduate Entrepreneur status before switching – deadline 6 July 2025
- Dependant applications for family members of existing visa holders continue to be accepted
What Has Closed
Initial applications for Tier 1 Entrepreneur status are no longer accepted. The Home Office will refuse any new application from someone seeking to come to the UK for the first time as a Tier 1 Entrepreneur.
- New Tier 1 Entrepreneur visa applications – closed 29 March 2019
- Most extension applications – closed 6 April 2023 (exceptions apply for former Graduate Entrepreneurs)
- Switching from other visa categories to Tier 1 Entrepreneur status
Critical Deadlines for Existing Tier 1 Entrepreneur Visa Holders
Settlement Application Deadline: 5 April 2025
The most critical deadline facing existing Tier 1 Entrepreneur visa holders is the settlement application deadline. All settlement applications must be submitted by 5 April 2025. Settlement applications must be made using the official indefinite leave to remain process for business visa holders, which includes comprehensive requirements and documentation standards. This deadline is absolute and cannot be extended.
Settlement Requirements:
- Five years’ continuous lawful residence in the UK under the Tier 1 Entrepreneur route
- Successful establishment and operation of a UK business throughout the qualifying period
- Creation of at least two full-time equivalent jobs for settled workers (or meet accelerated settlement criteria)
- English language proficiency at B1 level (equivalent to IELTS 4.0)
- Successful completion of the Life in the UK test
- Compliance with residence requirements (no more than 180 days outside the UK in any 12-month period)
Extension Applications: Limited Availability
Extension applications are severely limited, with most routes already closed. Existing holders could apply for 2-year extensions until 6 April 2023, with applications taking approximately 8 weeks to process through the online system and UKVCAS appointments.
Closed Extension Routes:
- Standard Tier 1 Entrepreneur extensions closed 6 April 2023
- Switching from other visa categories to Tier 1 Entrepreneur closed with the route
Remaining Extension Route:
- Former Tier 1 Graduate Entrepreneur holders who switched to Tier 1 Entrepreneur can apply for extensions until 6 July 2025
Historical Success Rates and Policy Impact
Understanding Success Rate Trends
Historical data reveals significant variations in success rates that ultimately contributed to the route’s closure. From 2008 to June 2018, entry clearance success rates for main applicants averaged 55.26%, while extension success rates were 50.75%.
Key Success Rate Trends:
- 2012: 78.06% success rate – highest recorded
- 2013: Dropped to 49.18% due to genuine entrepreneur test introduction
- 2015: Lowest at 48.01% following further rule changes
- 2017-2018: Recovery to 54-67% range
- Genuine Entrepreneur Test: More than 48% of applications fail at this assessment stage
Extension Success Rate Variations
Extension applications showed even more dramatic fluctuations, with success rates ranging from 82.57% in 2011 to just 35.92% in 2013, before recovering to 67.29% by 2017. This volatility highlighted the challenges applicants faced in meeting evolving requirements.
Tier 1 Entrepreneur Settlement Requirements
Standard Settlement Pathway
Tier 1 Entrepreneur visa holders become eligible for indefinite leave to remain (settlement) after five years of continuous residence in the UK. Settlement applications require comprehensive evidence of successful business establishment and ongoing compliance with visa requirements.
Application Timing: You can apply up to 28 days before reaching the end of your qualifying period. Applications made earlier than this may be refused. The Home Office considers the most recent 3 or 5 years (whichever is most beneficial for you).
Essential Settlement Documentation:
- Evidence of continuous UK residence for five years as a Tier 1 Entrepreneur
- Proof of business establishment and ongoing operations throughout the qualifying period
- Documentation of job creation (minimum two full-time equivalent positions for settled workers)
- Investment evidence showing maintenance of required funding levels (£200,000 or £50,000)
- Companies House registration and ongoing filing compliance
- English language qualification at B1 level
- Life in the UK test pass certificate
Accelerated Settlement After Three Years
The Tier 1 Entrepreneur route includes provisions for accelerated settlement after three years for exceptional business performance. This pathway requires entrepreneurs to demonstrate significant job creation or business growth.
Accelerated Settlement Criteria:
- Job Creation Route: Creation of at least 10 full-time equivalent jobs for settled workers
- Business Growth Route: Annual business turnover of at least £5 million in the most recent full year
- New Business Income: £5 million turnover during 3-year period (can be single year or cumulative)
- Existing Business Growth: £5 million net increase compared to 3 years before investment
- Three years of continuous residence in the UK as a Tier 1 Entrepreneur
- Compliance with all other settlement requirements
Critical Absence Rules for Settlement
Absence compliance is crucial for settlement applications and has specific calculation rules that changed in 2018:
- Maximum absences: 180 days in any consecutive 12-month period
- Rolling basis calculation: From 11 January 2018, absences calculated on rolling basis rather than separate 12-month periods
- Delayed entry counts: Time between visa grant and UK entry counts toward 180-day limit
- Humanitarian exception: Absences for humanitarian/environmental crises overseas don’t count (with evidence)
- Consequences of exceeding limits: Breaks continuous period – must restart qualifying period
The Genuine Entrepreneur Test for Existing Holders
Understanding the Assessment
The genuine entrepreneur test, introduced in January 2013 and made more stringent in April 2015, remains crucial for existing Tier 1 Entrepreneur visa holders applying for extensions or settlement. This assessment evaluates whether the applicant has genuinely established and operated a UK business rather than using the route primarily for immigration purposes.
Assessment Factors (from 31 January 2013 changes):
- Source of funds – credibility and viability of funding sources
- Business plan viability and credibility, including market research
- Academic and business background relevant to proposed business
- Immigration history and previous UK activity
- Active involvement in day-to-day business operations and decision-making
- Knowledge of business activities, finances, and strategic direction
- Evidence of genuine trading activities and customer relationships
- Alignment between business activities and original business plan
Business Plan Requirements for Assessment
Business plans must be tailored for Home Office caseworkers who may lack business experience. Plans should be clear, concise, and demonstrate thorough market research.
Essential Business Plan Elements:
- Business description, products, and services
- Previous experience and qualifications in related industries
- 3-year financial forecast detailing how £200,000/£50,000 will be deployed
- Comprehensive market research including SWOT analysis
- Target market, pricing strategy, and competitor analysis
- Business location and commercial lease details
- Required licenses and professional registrations
- Staffing plan including employment of 2 ‘settled’ workers
- Professional advisors (accountants, lawyers) identification
Job Creation Requirements and Technical Compliance
Standard Job Creation Requirements
Tier 1 Entrepreneur settlement requires the creation of at least two full-time equivalent jobs for settled workers. These positions must be genuine employment relationships with specific duration and compliance requirements.
Job Creation Technical Definitions:
- Full-time job: Minimum 30 hours paid work per week
- Part-time combinations: Two or more part-time jobs totaling 30+ hours = 1 full-time equivalent
- Job overflow: Single job exceeding 30 hours still counts as only 1 job
- Duration requirement: Jobs must exist for at least 12 months during most recent leave period
- Non-consecutive allowed: 12 months can be split (e.g., 6 months + 6 months)
- Application timing: Jobs need not exist on application date, just during qualifying period
Settled Worker Requirements
Jobs must be created for ‘settled workers’ with specific legal status requirements:
- British citizens
- EEA nationals with settled status or permanent residence
- Others with indefinite leave to remain
- Compliance with UK employment law including National Minimum Wage
- Compliance with Working Time Directive requirements
- Genuine employment relationships with proper contracts and payroll
Enhanced Job Creation for Accelerated Settlement
Entrepreneurs seeking accelerated settlement must create at least 10 full-time equivalent jobs for settled workers. Jobs must exist for at least 12 months during the last grant of leave, and different short-term jobs cannot be combined to reach the 12-month requirement.
Pre-6 April 2014 Transitional Arrangements (Expired):
- 1 worker for 24 months, OR
- 1 worker for 6 months + 1 for 18 months, OR
- 4 workers for 6 months each
- Note: These arrangements ended on 6 April 2019
Investment Requirements and Technical Compliance
Investment Fund Characteristics
Tier 1 Entrepreneur visa holders must maintain their required investment levels throughout their period of stay. Investment funds must meet specific criteria for source, availability, and deployment.
Fund Requirements:
- Investment amounts: £200,000 (standard) or £50,000 (specific circumstances)
- Fund characteristics: Must be “disposable” (free to spend) and held in regulated financial institutions
- Third-party funding: Multiple third-party funders allowed, including venture capital firms
- Venture capital requirements: Must provide FCA registration confirmation and transfer date letters
- Fund recycling prevention: Cannot use funds from other Tier 1 Entrepreneur migrants, their businesses, or close family members
Directors’ Loans and Business Structure
Specific rules apply to directors’ loans and business structure arrangements:
- Directors’ loans: Bank statement evidence required only for investments made after 19 November 2015
- Companies House registration: Must register within 6 months of entering the UK
- Business purchase exclusion: Buying any business from its previous owner doesn’t qualify as investment
- Multiple businesses: Can establish or take over multiple businesses
Team Applications and Partnership Requirements
Entrepreneurial Team Structure
The Tier 1 Entrepreneur route allowed entrepreneurs to apply as teams of maximum two people, sharing investment requirements and business responsibilities. Team applications required careful coordination and individual demonstration of business involvement.
Team Application Requirements:
- Team size: Maximum two applicants per entrepreneurial team
- Shared investment: Teams can share the £200,000 investment requirement
- Individual expertise: Each team member must demonstrate relevant business acumen, skills, or experience
- Interview requirements: Both team members may be called for credibility interviews
- Knowledge requirements: Both must demonstrate deep knowledge of business idea, UK market, finances, and operations
- Dependants: All team members and dependants can apply simultaneously
Team Settlement Requirements
Team members must maintain their partnership arrangements for settlement applications while demonstrating individual contributions:
- Both team members must demonstrate individual involvement in business operations
- Shared job creation responsibilities (total of two jobs for the team)
- Evidence of continued partnership and business collaboration
- Individual compliance with residence and English language requirements
- Accelerated settlement example: 3 jobs year 1 + 3 jobs year 2 + 4 jobs year 3 = 10 jobs total
Technical Rule Changes and Compliance Updates
January 2018 Immigration Rule Changes
Significant technical changes were implemented on 11 January 2018 affecting compliance requirements and evidence standards:
- Job creation timing flexibility: If current leave granted less than 12 months ago, jobs must exist 12 months before application date
- Employee documentation: Must confirm both paid hours AND hourly rates to prevent calculation errors
- Real-Time Full Payment Submissions: Amendments recognizing these don’t show employment start dates
- Evidence timing: Job creation evidence relates to period before joining business, not before job creation
- Third-party funding clarification: Funds held by other businesses count as third-party funding
Points-Based Assessment System
The Tier 1 Entrepreneur route operated under a points-based system requiring 95 points total for initial applications and 75 points for extensions. Points were awarded based on investment funds, English language ability, and maintenance funds.
Innovator Founder Visa: The Primary Alternative
Understanding the New Route
The Innovator Founder visa represents the UK government’s preferred route for attracting entrepreneurial talent. The official Innovator Founder visa guidance provides detailed requirements for this endorsement-based route, which emphasizes innovation and scalability over fixed investment amounts. This route emphasises innovation, scalability, and business viability rather than simple investment thresholds.
Key Features of the Innovator Founder Route:
- No minimum investment requirement (unlike the £200,000 Tier 1 Entrepreneur threshold)
- Endorsement requirement from approved UK bodies (£1,000 fee + £500 per contact meeting)
- Three-year pathway to settlement (compared to five years for Tier 1 Entrepreneur)
- Emphasis on innovative, viable, and scalable business ideas
- Unlimited extensions possible for successful businesses
- Business must be “new, innovative, viable, and scalable”
Innovator Founder vs Tier 1 Entrepreneur Comparison
The Innovator Founder route differs significantly from the closed Tier 1 Entrepreneur route in both philosophy and requirements:
Investment Requirements:
- Tier 1 Entrepreneur: Fixed investment of £200,000 (or £50,000 in specific circumstances)
- Innovator Founder: No fixed investment requirement, but must demonstrate adequate funding for business development
Assessment Criteria:
- Tier 1 Entrepreneur: Points-based system focusing on investment funds and business establishment
- Innovator Founder: Endorsement-based system emphasising innovation, viability, and scalability
Settlement Timeline:
- Tier 1 Entrepreneur: Five years (or three years for accelerated route)
- Innovator Founder: Three years with demonstrated business success
Alternative Routes for New Business Immigration
Other Business Immigration Options
Beyond the Innovator Founder visa, several alternative routes may suit different business circumstances:
Self-Sponsorship Routes:
- Skilled Worker visa through established UK companies with sponsor licences
- Requires business establishment and sponsor licence registration
- Allows employment of overseas workers including business owners
Global Business Mobility Routes:
- UK Expansion Worker visa for overseas businesses establishing UK operations
- Senior or Specialist Worker routes for established UK subsidiaries
- Graduate Trainee programmes for international business development
Specialist Routes:
- Global Talent visa for individuals with exceptional ability in business or technology
- Start-up visa (closed July 2023) – existing holders can switch to Innovator Founder
The Start-up visa route also closed to new applicants in July 2023, but existing holders may be able to switch to the Innovator Founder route.
Choosing the Right Alternative Route
The optimal alternative route depends on individual circumstances, business type, and long-term objectives. We recommend comprehensive assessment of available options before making immigration decisions.
Planning for Settlement Applications
Early Preparation Strategies
Given the April 2025 settlement deadline, existing Tier 1 Entrepreneur visa holders should begin preparation immediately. Settlement applications require extensive documentation spanning the entire five-year qualifying period.
Essential Preparation Steps:
- Comprehensive review of business records and compliance throughout the qualifying period
- Collection and organisation of job creation evidence including employment contracts and payroll records
- Investment tracking and documentation of fund deployment
- English language qualification if not already obtained (B1 level = IELTS 4.0)
- Life in the UK test preparation and completion
- Professional legal review of application prospects and requirements
Common Settlement Application Challenges
Many Tier 1 Entrepreneur settlement applications face challenges related to:
- Insufficient evidence of genuine business activity throughout the qualifying period
- Job creation compliance issues, particularly regarding settled worker status
- Investment maintenance challenges during business development phases
- Changes in business activities from original business plans
- Residence requirement compliance with travel pattern documentation
- Director/self-employed registration timing (within 6 months of arrival, active within 3 months of application)
How Connaught Law Limited Can Assist
Expert Settlement Application Support
Our immigration specialists provide comprehensive support for Tier 1 Entrepreneur settlement applications, understanding the urgency created by the April 2025 deadline. We develop tailored strategies for each client’s specific circumstances and business history.
Our Settlement Services Include:
- Comprehensive eligibility assessment and compliance review
- Evidence gathering and documentation preparation
- Business activity analysis and genuine entrepreneur assessment
- Job creation verification and employment law compliance
- Application preparation and submission management
- Representation in complex cases and Home Office interactions
Alternative Route Consultation
For entrepreneurs who cannot meet Tier 1 Entrepreneur settlement requirements or new business immigration applicants, we provide strategic consultation on alternative routes including the Innovator Founder visa and other business immigration options.
Alternative Route Services:
- Innovator Founder visa eligibility assessment and endorsement strategy
- Business plan development for endorsing body assessment
- Self-sponsorship route evaluation and sponsor licence applications
- Global Business Mobility route assessment
- Strategic immigration planning for business development
