UK residency by investment is an option that exists for enterprising and ambitious individuals looking to build a new business in this thriving international powerhouse.

But did you know that the original residency by investment route - the Tier 1 Investor visa - has been replaced by another investment route, namely the Innovator Founder visa?

In February 2022, the British Home Office suspended the Tier 1 Investor visa owing to concerns that the passive investment required under this visa wasn’t tangibly serving the British people, with some investors under this program suspected of illicitly obtaining capital to fund their residency investments.

In contrast to the passive investments allowed for Tier 1 Investor visa applicants, the Innovator Founder visa specifically requires that investors create jobs to stimulate the UK economy.

Are you keen to learn how you could best exploit this amazing residency opportunity by investing in the UK’s globally connected market? 

Stay with us as we unpack the details…

*Disclaimer: All amounts quoted in this article were correct and accurate at time of publication and may have shifted since. 

What Are the Basics of UK Residency By Investment?

The UK residency by investment programme offers a route to settle by investing a substantial amount in the UK economy.

What is Residency By Investment?

"Residency By Investment" is a legal process that enables individuals to secure residency in a foreign country by making specific financial contributions.

These contributions may include investments in approved sectors such as real estate, businesses, or other areas, depending on the regulations of the respective country.

Residency By Investment programs are designed to attract foreign investors, stimulate economic growth, and offer individuals a legitimate pathway to residency through financial commitments.

What is UK Residency By Investment?

"UK Residency By Investment" refers to a program or legal process that allows foreign individuals to obtain residency in the United Kingdom by making qualifying investments.

This program typically involves financial contributions to sectors such as real estate, businesses, or other areas specified by UK immigration regulations.

Participants in the UK Residency By Investment program gain legal residency status, offering certain privileges while contributing to the country's economy.

What Are the Pros and Cons of Residency by Investment in the UK?

This investment pathway provides benefits like increased mobility and potential citizenship, alongside high financial requirements and rigorous checks.

What Are the Benefits of Residency by Investment in the UK?

The benefits of residency by investment in the UK range from quick access to a residence permit to the promise of an excellent quality of life.

In our expert opinion, these are the main benefits of the Innovator Founder visa:

• Quick temporary residence permit: If your Innovator Founder visa is approved, you’ll get your initial temporary residence permit within 3 weeks.
• Quick path to permanent residence: Within 3 years of maintaining your UK temporary residence permit, you can apply for permanent residency. 
• Stable economy and currency: The UK has one of the world's largest and most stable economies, which offers a secure and profitable environment for your investments.
• Beneficial tax regime: For UK residents who aren’t domiciled in the UK, the tax regime is quite favorable.
• World-class education: You and your family will gain access to top-tier education institutions.
• Healthcare: You'll enjoy access to the National Health Service (NHS).
• Global business hub: London and other cities in the UK are global business centers, providing access to a wide network of professionals and businesses.
• Quality of life: Living standards are high, with access to cultural, recreational, and lifestyle opportunities.
• Travel benefits: The UK is well-connected globally, and its residents enjoy visa-free or visa-on-arrival access to many countries around the world.
• Language: English is the primary language spoken, making it easier for most global investors to integrate and conduct business.
• Legal system: The UK has a transparent and well-regulated legal system, which provides a strong framework for businesses and investments.

What Are the Limitations of Residency by Investment in the UK?

The limitations of the UK's residency by investment program mainly hinge on the significant expense involved in obtaining it. 

Here’s our expert summary of the Innovator Founder visa’s limitations:

• High investment requirement: The minimum investment required for the UK Innovator visa is £50,000, which might be an exorbitant sum for some investors.
• Stringent application process: The application process for the Innovator Founder visa is rigorous and stipulates several conditions in order to satisfy the requirements of the visa.
• Limited to business owners: The Innovator Founder visa is specifically designed for experienced businesspeople who establish a business in the UK. This means it may not be suitable for those looking to invest in existing businesses or other types of investments.
• Only new businesses qualify: Innovator Founder visa investors are prohibited from simply investing in and joining existing businesses. They have to find a brand new business.
• No immediate permanent residency: The Innovator Founder visa initially grants temporary residency for 3 years, after which you can either apply for an extension or for indefinite leave to remain after this period.
• Permanent residency hinges on business success: After your initial temporary residency, you can only apply for permanent residency under the Innovator Founder visa if the business you founded meets 2 of the 7 success criteria set out by the Home Office.
• Costs: In addition to the investment amount, there are also visa application fees, healthcare surcharges, and legal fees that may be incurred during the application process.
• Brexit uncertainties: The UK's decision to leave the European Union has brought some uncertainties regarding trade, business regulations, and access to the European market.
• Taxation: The UK has a progressive tax system, and becoming a resident may have implications for your tax situation both in the UK and in your home country. In our seasoned experience, it’s imperative that you get expert tax advice to ensure that you optimize your taxes in accordance with the tax laws of any country you live or operate in.

Which Investment Types Qualify for Residency by Investment in the UK?

The only investment type that qualifies for residency by investment in the UK is the founding of a new, innovative, and scalable business that’s likely to create jobs. 

Unlike its predecessor, the Tier 1 Investor visa, the Innovator Founder visa doesn’t accept passive investments, and you’ll have to be actively involved in the operation of your business.

What else?

Your new business must be endorsed by an entity that’s approved by the UK Home Office.

This gives added legitimacy to your business plan.

What Are the Requirements for Residency by Investment in the UK?

The requirements for temporary residency by investment in the UK are highly specific and start with the stipulation that the investor be a business owner or entrepreneur.

 Let’s get into it.

What Is the Minimum Investment Required for UK Residency?

To qualify for the Innovator Founder visa (which grants you a temporary residence permit), you must be able to invest a minimum of £50,000 into your planned business. 

What Language Proficiency Is Needed for UK Residency by Investment?

Unless you’re from an exempted English-speaking country, you’ll typically be required to prove that you can read, write, speak, and understand English to a B2 level on the Common European Framework of Reference for Languages (CEFR) scale.¹

What Are the Success Criteria for Permanent Residency via the UK Innovator Founder Visa?

Once you’ve had temporary residency under the Innovator Founder visa for 3 years, you can apply for permanent residency if your business has been successful according to the criteria set out by the British Home Office.

To apply for Indefinite Leave to Remain, your business must have met at least 2 of the following 7 “success” criteria:

• At least £50,000 has been invested in the business and was actively spent on furthering the business plan assessed in the applicant’s previous endorsement.
• The number of the business’s customers has at least doubled within the most recent 3 years and is currently higher than the mean number of customers for other UK businesses offering comparable main products or services.
• The business has engaged in significant research and development activity and has applied for intellectual property protection in the UK.
• The business generated a minimum annual revenue of £1 million in the last full year covered by its accounts.
• The company made a minimum of £500,000 in revenue last full year, with at least £100,000 coming from exports.
• The business has created the equivalent of at least 10 full-time jobs for resident workers.
• The business has created the equivalent of at least 5 full-time jobs for resident workers, which have an average salary of at least £25,000 a year (gross pay, excluding any expenses).

Which Nationalities Are Restricted from Applying for UK Residency by Investment?

The UK Innovator visa is open to applicants from all around the world, provided they meet the eligibility requirements.

Will My Dependents Be Included Under My UK Residency by Investment?

Yes, your dependents will be included under your UK residency by investment permit.

This includes your partner and dependent children. 

How Long Is Residency Valid with the UK Innovator Founder Visa and Can It Be Extended?

As mentioned, if you’re approved for the Innovator Founder visa, you’ll first receive a temporary residence permit.

Here are the logistics.

What Is the Validity Period for UK Residency by Investment?

Your initial temporary residence permit is valid for 3 years under the Innovator Founder visa.

Can UK Residency by Investment Be Extended?

When your temporary residency permit is due to expire, you have 2 options.

Your options are:

• Renew your temporary residency permit indefinitely. 
• If your business has been successful by British Home Office standards, apply for a permanent residence permit, also known as Indefinite Leave to Remain. 

What Is the Application Process for UK Residency by Investment?

Visa applications can be stressful, and the Innovator Founder visa is no different!

Given the specificity of its requirements and the size of the investment required, you’ll need to stay organized to ensure a positive outcome. 

As always, WorldPassports is pleased to guide the way.

Our team has compiled all the details for you.

Step 1: How Do I Establish a Business Idea for the UK Innovator Visa?

The Innovator Investor program is aimed at experienced business people whose new UK businesses will create jobs and contribute to the UK economy.

That’s why you need to have a business plan that’s innovative, viable, and scalable.

Step 2: How Do I Secure Endorsement for the UK Innovator Visa?

Get an endorsement from an approved endorsing body. 

This is a mandatory requirement for Innovator Founder visa eligibility and must be obtained before submitting your application.

The endorsing body will need to evaluate your business idea and your business abilities, so ensure that you have all the required business documentation ready to present to it.

Step 3: What Are the Application Steps and Visa Fees for the UK Innovator Visa?

Apply for the Innovator Founder visa online and pay the application fee.

You’ll also submit all required supporting documents at this point.

Step 4: How Do I Complete Biometrics for the UK Innovator Visa?

Book an appointment to have your biometrics (fingerprints and a photograph) taken.

Step 5: What Is the Health Surcharge for the UK Innovator Visa?

Pay the Immigration Health Surcharge (IHS) as part of your application. 

This will give you access to the National Health Service (NHS) in the UK.

Step 6: What Happens While Awaiting the Decision on My UK Innovator Visa?

Wait for a decision on your application. 

The processing times can vary, but it usually takes around 3 weeks for applications made outside the UK.

Step 7: When Should I Travel to the UK After Getting the Innovator Visa?

If your application is successful, you’ll be granted a visa to travel to the UK. 

You may be asked to show your visa at the border, so make sure you have a copy of it with you.

Step 8: How Do I Collect My Biometric Residence Permit in the UK?

After you arrive in the UK, you’ll need to collect your Biometric Residence Permit (BRP) from a post office or a BRP collection point.

Bear in mind

Receiving your Innovator Founder visa will grant you a 3-year temporary residency permit.

When your temporary residence permit is due to expire, you have the option of applying for permanent residency if your business meets 2 of the 7 success criteria set out by the British Home Office.

What Documents Are Required for the UK Innovator Founder Visa?

The required documents for your Innovator Founder visa application range from your passport to a clear tuberculosis test.

Let’s have a closer look:

How Should I Prepare a Business Plan for the UK Innovator Visa?

A comprehensive and compelling business plan is an imperative part of the Innovator Founder visa application process.

Importantly, your business plan will have to demonstrate that your business idea is:

• Innovative: Your business idea must be original and genuine. Your business plan explains in detail how you plan to meet a market need and/or create a competitive advantage.
• Viable: Your proposed business must have a realistic chance of turning into a success. This includes demonstrating that you have the experience, market knowledge, and business skills to ensure this happens.
• Scalable: Your business plan needs to prove that there’s a strong probability for growth in the business, that it'll likely create jobs, and is likely to expand into domestic and overseas markets.

What Are the Requirements for an Endorsement Letter for the UK Innovator Visa?

This letter will come from one of the UK’s approved endorsing bodies and will confirm that you and your business idea have been assessed and approved.

Remember

You can’t hope to apply for the Innovator Founder visa successfully without this endorsement.

Is a Valid Passport Required for the UK Innovator Visa Application?

If you’re from outside the EU, Switzerland, Norway, Iceland, or Liechtenstein, your passport must have at least 1 blank page in it.

This will also apply if you're from the EU, Switzerland, Norway, Iceland, or Liechtenstein but don’t have a biometric passport with a chip in it.

Which Bank Statements Are Needed for the UK Innovator Visa?

Your bank statements are needed to verify that you’ll be able to sustain yourself and your family while setting up and operating your business in the UK.

Specifically, your bank statements must show that you’ve had at least £1,270 in savings in your bank account for 28 consecutive days before you apply.

How Do I Prove English Proficiency for the UK Innovator Visa?

If you’re from an exempted English-speaking country, you won’t have to prove your English proficiency.

If not, you can prove your knowledge of English in one of the following ways:

• Pass a Secure English Language Test (SELT).
• Have a GCSE, A level, Scottish National Qualification level 4 or 5, Scottish Higher or Advanced Higher in English gained through study at a UK school that you began when you were younger than 18.
• Have a degree-level academic qualification that was taught in English.

Are Tuberculosis Test Results Required for the UK Innovator Visa?

If you’re from a country where you have to take the TB test, you’ll need to provide proof that you’ve taken the test and that it was clear.

Note

Depending on your circumstances, you may be required to provide additional documents.

What Are the Costs Associated with UK Residency by Investment?

The costs involved in residency by investment in the UK can mount up quickly, so it’s important that you plan for them adequately.

Not to fear, WorldPassport has you covered; we’ve narrowed down some of the costs you can expect when investing in the Innovator Founder visa.

Let’s have a look at them.

What Are the Visa Application Costs for the UK Innovator Founder Visa?

If you’re applying from outside the UK, the application fee is £1,036. 

If you’re applying to switch to this visa from within the UK, the application fee is £1,292.

What Are the Costs to Found a Business in the UK?

As mentioned above, the minimum acceptable investment to start and fund your business is £50,000. 

What Is the Health Surcharge for UK Residency Applicants?

The immigration health surcharge is mandatory and comes to £624 per year of stay. 

What Are the Fees for Endorsement Bodies in the UK?

The selected endorsing body will charge an endorsement fee of £1,000 (excluding VAT).

Note that these fees will also apply to any dependents applying to join you in the UK.

What Are the Personal Maintenance Costs for UK Residency Applicants?

You must have at least £1,270 present in your bank account for at least 28 days before your application is submitted, plus an additional £385 for a dependent partner, £315 for a first child, and £200 for each additional child.

This is to prove that you’ll be able to sustain yourself while in the UK. 

What Legal and Advisory Costs Are Involved in Applying for UK Residency?

We highly recommend seeking legal and business advice from a professional who’s experienced in UK immigration law. 

Legal and advisory costs can vary widely, depending on the professional and the services provided. 

These fees can include:

• Consultation fees 
• Legal representation 
• Assistance in preparing the application
• Assistance in reviewing the supporting documents 
• Business plan preparation
• Accounting fees

What Additional Costs Are Associated with UK Residency Applications?

Additional costs associated with the Innovator Founder visa can range from translation fees to salaries.

Let’s elaborate on this:

• Translation and certification of documents: If any of your documents aren’t in English or Welsh, you'll need to have them translated by a certified translator. This will incur additional costs.
• English language test: If you’re not a national of a majority English-speaking country or don’t have a degree taught in English, you’ll need to take an English language test from an approved test provider. The cost of the test can vary.
• Relocation costs: Moving can be a costly and stressful endeavor, as a general rule. If you’re applying for the Innovator Founder visa from outside the UK, your relocation costs may be substantial.
• Salaries: In order to qualify for UK permanent residency (also referred to as Indefinite Leave to Remain) after your initial 3 years of temporary residency under the Innovator Founder visa, you’ll need to prove that you met the success requirements of your business. One of the criteria for this is the creation of the equivalent of at least 5 full-time jobs for resident workers, which are paid at least the national minimum wage. As an example, this costs around £25,000 a year per employee gross.²

What Is the Processing Time for UK Residency by Investment?

To assist you in your planning, we've thoroughly researched the processing time of residency by investment in the UK so that you know exactly what to expect.

Read on.   

What Is the Average Processing Time for a UK Innovator Founder Visa?

Typically, if you’ve applied from outside the UK, Innovator Founder visa applications are processed within 3 weeks.

If you’re applying from outside the UK, you’re likely to wait around 2 months for your application to be processed.

What Factors Affect the Processing Time for UK Residency by Investment?

The processing time of your application for the Innovator Founder visa can be affected by several factors.

These can include:

• Completeness of application: An incomplete application or missing documents can lead to delays in processing times.
• Endorsement: Obtaining an endorsement from an approved endorsing body is a crucial part of the application process. The time it takes to receive an endorsement can vary based on the endorsing body and the quality of your business proposal.
• Volume of applications: The number of applications received by the UK Home Office at the time of your application can affect the processing time.
• Country of application: The country from which you are applying can also affect the processing time. Some visa application centers process applications faster than others.
• Time of year: Certain times of the year, such as holidays, may result in longer processing times due to the high volume of applications.
• Supporting documents: The time it takes to gather all the necessary supporting documents can also affect the processing time. For example, getting your documents translated, obtaining a tuberculosis test, or taking an English language test can add to the processing time.
• Payment of fees: Your application won't be processed until all the required fees, including the visa application fee and the Immigration Health Surcharge, have been paid in full.
• Biometrics appointment: The time it takes to schedule and attend a biometrics appointment can affect the overall processing time.
• Criminal record checks: If you're required to provide a criminal record certificate, the time it takes to obtain this document can affect the processing time.
• Previous immigration history: If you have a complicated immigration history, it may take longer to process your application.

Remember

These are just some of the factors that can affect the processing time of the Innovator Founder visa. 

The actual processing time may vary based on your specific circumstances.

Are There Expedited Processing Options for UK Residency by Investment?

Officially, there's no expedited processing option for Innovator Founder visa applications.

How Soon Will I Receive My Residence Permit After Approval of My UK Residency by Investment Application?

You’ll be granted a temporary residence permit within 3 weeks of receiving your Innovator Founder visa approval. 

As mentioned previously, you can apply for permanent residency when your temporary residence permit expires if your business has met the success requirements under the Innovator Founder visa program.

What Are the Tax Implications of UK Residency by Investment?

Non-domiciled residents of the UK can enjoy more lenient tax charges.

However, you’re considered a tax resident if:

• you spend 183 days or more in the UK in a tax year.
• your only income earned in 91 days was in the UK.
• you visited or stayed in the UK for at least 30 days. 

The tax implications of UK tax residency are as follows:

• Income tax: Residents in the UK are subject to income tax on their worldwide income. This includes income from employment, self-employment, rental income, and dividends. The rate of income tax varies from 20% to 45%, depending on your income level.
• Capital gains tax: UK residents are also subject to capital gains tax on the gain from the sale of assets worldwide. The rate of capital gains tax varies from 10% to 20%, depending on your income level and the type of asset.
• Inheritance tax: UK residents are subject to inheritance tax on their worldwide assets. The standard rate of inheritance tax is 40% on assets above £325,000. However, there are some exemptions and reliefs available.
• National insurance contributions: If you're working in the UK, you'll need to pay National Insurance contributions. These contributions fund state benefits such as the state pension and the National Health Service (NHS).
• Stamp duty land tax: If you buy property in the UK, you'll need to pay Stamp Duty Land Tax. The rate of tax varies depending on the value of the property and whether it’s your main residence or a second home.
• Council tax: If you live in the UK, you'll need to pay council tax to the local authority where you live. The amount of council tax you pay will depend on the value of your property and the council tax band it falls into.
• Tax treaties: The UK has tax treaties with many countries to avoid double taxation. This means that if you're paying tax in another country, you may be able to claim relief on your UK tax return.
• Non-domicile status: If you’re resident in the UK but not domiciled there, you may be able to claim the remittance basis of taxation. This means you only pay tax on foreign income and gains that you bring into the UK.
• VAT: Value Added Tax (VAT) is a consumption tax levied on the sale of goods and services in the UK. The standard rate of VAT is 20%, but there are reduced rates for certain goods and services.
• Corporate tax: If you set up a business in the UK, you'll need to pay corporation tax on the profits of your business. The rate of corporation tax is 19%.

It's important to note that tax laws are complex and subject to change. 

We recommend that you consult a tax professional or financial advisor to understand the full tax implications of residency by investment in the UK.

Is UK Residency by Investment a Pathway to UK Citizenship?

Yes, UK Innovator visa holders can apply for British citizenship after meeting a few criteria.

These criteria include:

• Living in the UK for at least 5 years.
• Holding permanent residence for at least 1 year, subject to meeting language and other requirements.

Common Questions

In Conclusion

The UK’s Innovator Founder visa is an exciting route to UK residency by investment for enterprising and ambitious businesspeople. 

It requires a foolproof business plan and significant capital investment, but if you can turn your UK business into a success, you’re very likely to obtain UK permanent residency.

We can’t wait to guide you in turning your dream of UK residency by investment into a reality. 

Don’t hesitate to reach out to our experienced WorldPassports team.

Have you considered the residency by investment programs in Europe? Head over to our hub of articles to acquaint yourself with what’s available.

Learn More: Residency by Investment in Europe & the UK