The sole representative visa is a popular visa category for business owners who wish to establish a commercial presence, in the UK. There was an increase in applications under this visa category in the last year as the Tier 1 Entrepreneur visa was abolished by the government in March 2019. The Sole Representative visa allows a branch or subsidiary of an overseas parent company to be established in the UK. The main requirement is that the company is a genuine commercial enterprise with its main place of business/headquarters outside the UK.
On 14th May 2020, the government has introduced a new Statement of Changes before parliament under the Immigration Rules CP 232. The Sole Representative visa, also known as the Representatives of Overseas Businesses, under rule 144 of the Immigration Rules will be changed. The government has proposed to make this visa more difficult to obtain, especially since there has been an increase in these applications over the last year. The main change is the introduction of a subjective genuineness test. Although it was always known that an application must be genuine, this has now been specifically stated in the rules.
The genuineness aspect has been problematic for people applying before the Statement of Changes where the Home Office does not accept that the company was genuine for whatever reason they may have found in the application. As the genuineness of business is now the greatest factor and a significant change in the rules, we hereby summarize below the main changes introduced under the rules:
- The business must be an overseas business, who will continue to have its headquarters overseas. Therefore, the business must still be established overseas, and should only intended to open a branch or subsidiary in the UK. If the Entry Clearance Officer suspects the applicant will establish the company headquarters in the UK, the application will be refused.
- A senior employee must be the applicant coming to open the branch or subsidiary in the UK. The branch or subsidiary must not be established in the UK with the intention of it being established solely for the purposes of entry and stay in the UK. This means it is now harder to obtain the visa and the entry clearance officer must be satisfied that the applicant is setting up a branch or subsidiary in the UK to further his business, rather than to enter the UK freely.
- The sole representative of the overseas business must be present in the UK. The rules have now made it harder to obtain the visa as the individual must hold the skills, experience and knowledge of the business which is necessary to undertake that role. Further to this, they must hold full authority to negotiate and undertake that role which includes being able to take operational decisions on behalf of the business. The representative must be employed full time in the business established in the UK and they must not intend to engage in any other business of their own, or any other business interest of someone else.
- Under the old rules, the representative could not be the majority shareholder of the business, rather, they must be a senior employee. However, this has now been clarified. Under the new rules, any applicant must not have a majority stake in, or own/control the overseas business, whether that is by being:
- A shareholder
- In a partnership agreement
- Sole proprietor
- Or any other arrangement.
A further change to the rules also looks at the evidence that is provided at the time of application. Previously, the letter submitted by the employer did not have a great amount of details and that would be sufficient. However, the future changes state that the letter from the employer is now more complex. The letter will now require more detail about the employee. The employer must make it clear that the employee holds the full powers to negotiate and take operational decisions, which is a requirement of the rules.
There has also been a significant change to dependants who join the applicant. Under the previous rules, there was no provision where the dependant partner (such as the applicant’s wife) could not be the majority stakeholder. This meant the main applicant would be the sole representative, and the dependant partner would be the majority owner. However, from the Statement of Changes, it is now clear that the dependant partner cannot be the majority owner. This makes it much more difficult for a family to establish themselves together in the UK.
As evident from above, the Sole Representative visa will become much more difficult to obtain. Satisfying the new rules is much stricter and requires a lot more preparation. However, these new rules will not come into force until 04th June 2020. This, therefore, means that if an individual applies before 04th June 2020, their application will be decided under the old, more relaxed rules in comparison to the new rules introduced.
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Connaught Law and authors accept no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Connaught Law. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Connaught Law.