How the tech sector can make the most of the UK’s new immigration rules

12 November 2020

Many companies in the tech sector will be aware of the new immigration system and Skilled Worker category opening in a couple of weeks on 1 December. For those companies without a sponsor licence, they will need to apply for one in order to recruit both non-EU and EU citizens. EU citizens resident in the UK before 11 pm on 31 December 2020 can apply to the EU Settlement Scheme.

However, for international tech companies currently based outside the UK there are other considerations to take into account when you need to move specialist staff to the UK. For example, when applying for a sponsor licence it is necessary to first have a trading UK entity that can apply for the licence. It must also have at least one senior person based in the UK who can act as the Authorising Officer, the person in charge, of the licence. Where a tech sector company wishes to set up in the UK this can lead to a ‘chicken and egg’ scenario of wanting to send someone to the UK to set up the UK operation but being unable to apply for a licence.  

The solution is often to submit a representative of an overseas business application, also known as a sole representative application. This is for a senior level employee of the overseas group company who is being sent to the UK to set up operations where there is currently not any UK corporate presence. The employee must not be a majority shareholder in the overseas company. Once that person can enter as a sole representative and set up the UK company, they can act as Authorising Officer and apply for the sponsor licence.  From there, any staff of the group based outside the UK can transfer to the UK by way of a Skilled Worker or Intra-Company Transfer (ICT) application under the new rules from 1 December.  

As explained in our FAQs on the new immigration system, unlike the existing Tier 2 (General) category there will not be any resident labour market test (RLMT) advertisement process for Skilled Worker applications and the skill level will be reduced, as will the minimum salary expectations. As the Skilled Worker category can lead to indefinite leave to remain (ILR) after 5 years, it is most likely that the ICT category will be underused in comparison to the current Tier 2 (ICT) route as it does not lead to ILR and the salary requirements are more onerous.  

For some tech sector organisations the Tier 2 (General) rules on share ownership have been problematic for senior level employees and founders. Where the individual to be sponsored to work in the UK owns more than 10% of the shareholding in the UK limited company sponsor, they have been prohibited from applying unless they apply as a high earner basis a salary of at least £159,600. The new Skilled Worker rules as drafted contain no such restriction, albeit we await the detailed Home Office guidance to accompany the rules. Applicants will need to be aware of the ‘genuineness’ requirements, including that the job has not been created mainly so the applicant can apply for a visa. One potential benefit of the ICT category is that unlike the Skilled Worker category it is not necessary to meet the English language requirements. 

More than in most sectors, international tech companies need to react to market conditions and be nimble in their use of the UK immigration system. Whilst sole representative applications are useful in the above scenario, they are limited, as the name implies, to just one person transferring to the UK. For many tech organisations where highly specialist and niche skills and experience are required, this will be problematic and will not enable them to react quickly enough by the time the sponsor licence is obtained and Skilled Worker or ICT applications submitted. The UK immigration policy makers seem to be aware of the limitations of this route.  In a potentially useful development for the tech sector, in addition to reviewing the ICT eligibility criteria and conditions, the Home Secretary has asked the Migration Advisory Committee (MAC) to look at the sole representative route and report back by the end of October 2021. 

The government is seeking to “expand its mobility offer” and has asked the MAC to consider a new option to enable a business based outside the UK to send a team of workers to the UK to establish a branch or subsidiary in the UK. The MAC will advise the government on the viability of those new routes for teams of workers and the eligibility criteria to include for example skill and salary thresholds for the members of the team as well as the sending organisation’s size, the value of the investment or contract and the potential for UK job creation. Presumably the new rules will be less restrictive on the seniority of the employee(s) to be transferred. The MAC has also been asked to consider new rules for a business based outside the UK to send a team of workers to the UK to undertake a secondment in relation to a high-value contract for goods or services. The intended scope of this new route is unclear but would presumably be a welcome extension of the current Appendix 3 visitor rules which in certain circumstances allow individuals to enter as a visitor for example in relation to “Manufacturing and supply of goods to the UK” and “Clients of UK export companies.”  

If you have any queries in relation to the above or any other immigration matter, please contact a member of the immigration team.

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