Sponsoring entrepreneurs under the Skilled Worker route

Since the closure of the Tier 1 (Entrepreneur) migrant route, it has been very difficult for foreign national entrepreneurs to set up a business in the UK.

The innovator visa - designed to replace the entrepreneur route - has been a flop, with very low application rates.

Can the Skilled Worker route provide an alternative in some cases?

But the Skilled Worker route is for ... workers, right?

Correct.

The Skilled Worker route is the main way businesses bring employees into the UK to work in a particular role, for a specified period of time.

But what if an individual was employed as an entrepreneur by a business with a sponsor licence?

This is not uncommon in the venture capital (VC) space, where firms employ Entrepreneurs-in-Residence to create the next business the VC will fund.

Are they really an "entrepreneur" then?

True, someone in this position would have to be an employee under the rules of the Skilled Worker route.

And what happens if the employee-entrepreneur (and the sponsor) wants to start setting up the venture, incorporating a separate company, trading etc.?

There is likely going to be a second entity involved in the day-to-day work of a sponsored employee (i.e. the sponsored worker's chosen venture). As the Home Office states in its guidance

You cannot sponsor a worker and then supply them as labour to another organisation, regardless of any genuine contractual arrangement between the parties involved.

It will therefore be important to make sure that the sponsor retains responsibilities for the duties, functions, outputs and outcomes of the sponsored worker.

And of course it will be important to consider, in practical terms, how a sponsor is going to do this in line with the relevant immigration rules.

Would the role qualify as an eligible occupation?

The salary would need to meet the minimum threshold, as in any other eligible Skilled Worker role.

With the lowering of the minimum qualification required in the role from RQF6 (degree level), to RQF3 (A-level), it is likely that an Entrepreneur-in-Residence would meet this.

Selection of the Standard Occupation Classification (SOC) code would, as ever, require careful consideration.

But this role does exist in industry, and must therefore be codeable.

Fine in theory, but could this work in practice?

We recently received approval of a sponsor licence application in which our early-stage VC client set out its intention to hire several Entrepreneurs-in-Residence.

Our client plans to invest in, and support, the ideas and ventures of its employee-entrepreneurs, within the confines of the Skilled Worker route, and the licence was granted on this basis.

We wish them luck.

This post is intended to provide general background on the relevant issues and does not constitute legal advice. The law may have changed since the date this article was published. You should always take legal advice relating to your individual circumstances.