Author
Charlie Pring

Charlie Pring

Senior Counsel

Read More
Author
Charlie Pring

Charlie Pring

Senior Counsel

Read More

4 May 2022

Law at Work - May 2022 – 3 of 5 Insights

Setting up in the UK: Expansion Worker visa replaces Sole Representative visa

For many years, overseas businesses launching a UK operation used the sole representative visa route. That visa - officially called the ‘Representative of an Overseas Business’ visa - was designed for one senior employee of an international business to apply for a work visa, which would allow them to set up and run a UK subsidiary or branch. It was outside the Points Based System and so was exempt from the rigid eligibility and compliance rules applying to sponsored visas.

On 11 April 2022 the sole representative visa closed to new applicants, but it remains open for sole reps that already have the visa to extend and apply for settlement (permanent residency). It has been replaced by a new sponsored route - the Global Business Mobility: UK Expansion Worker visa.

In several ways as explained below, the UK Expansion Worker (UKEW) visa is less generous than the sole representative visa. But we've consistently highlighted one shortcoming of the sole rep route – that it only supported one visa, when companies investing into the UK often need a team to arrive together to launch the UK business. For the first time, the sponsored UKEW route will enable up to five skilled workers to come to the UK to help launch and run the new UK office until it is fully trading. For some businesses the ability to have a team from HQ on the ground early on will be invaluable to their successful expansion.

When planning to launch in the UK, businesses should conduct a full immigration strategy review to assess what visa routes may be available to each non-British worker that needs to work in the UK. That review should assess whether a personal visa might be available through the applicant's attributes (e.g. the new High Potential visa from 30 May 2022 mentioned here), ancestry or family connections. Where a different route is not available or suitable, international companies that have been trading for at least three years outside the UK and that plan to set up in the UK must now use the UKEW visa.

Global Business Mobility (GBM)

GBM consists of five visa routes for established international businesses to send skilled workers to the UK for temporary work assignments. UK Expansion Worker is one of those five new visa schemes. The GBM routes are a combination of new visas (like UKEW) and rebranding of existing visas (for example 'ICT' has become 'GBM: Senior or Specialist Worker'). ‘Tier 2’ sponsorship is now a distant memory, although anyone currently on a Tier 2 visa can extend or switch into a GBM or another appropriate visa. There are different rules for each GBM route, but there are common themes applying to all GBM routes:

  • there must be a UK entity holding an appropriate sponsor licence to sponsor the visa. In the case of UKEW, this must be a non-trading UK entity.
  • all GBM routes are temporary, so time spent on any GBM visa does not lead to settlement (permanent residency). This is a big change for employees relocating to the UK to set up the UK business, because the sole rep was eligible for settlement after five years, whereas time spent on the UKEW does not count.
  • like ICT, time spent in GBM (across any of the routes) is capped at a maximum of five years in a six-year period, except for high earners with a salary of at least £73,900. High-earners can stay up to nine years in a 10 year period. The cap only applies to time spent in GBM - not to Skilled Worker or other visa routes that are uncapped.
  • applicants for GBM visas are exempt from any English language requirement.

UKEW: visa duration

Once a UKEW licence is in place, the UKEW visa will be granted for 12 months initially, with the option of one 12-month extension (assuming the applicable GBM cap has not been reached). So, the maximum time that can spent in UKEW is two years.

Contrast that with sole rep which granted an initial three-year visa, with unlimited two-year extensions, with the option to settle after five years.

The change implements a recommendation in the Migration Advisory Committee's 2021 report on Intra-company transfers. The MAC considered that the visa for the launch team only needs to be long enough to meet its purpose - to establish a UK entity until it starts trading.

UKEW applicants wanting to stay in the UK beyond two years - or that want to start the clock running on settlement as early as possible because future plans are unknown - will need to switch into a different visa route leading to settlement. That could be a personal visa, or in many cases will be the sponsored Skilled Worker route once the UK entity is trading (with at least one employee on the ground, a bank account, payroll etc) and can apply for a Skilled Worker sponsor licence.

UKEW sponsor licence

Before an employee can apply for a UKEW visa, the non-trading UK entity must apply for a four-year sponsor licence, to enable it to sponsor the visa. The UK entity - a wholly owned subsidiary company or registered branch (establishment) - must be in common ownership with the overseas HQ company employing the UKEW applicant. The planned UK operation must be in the same type of business as the overseas business, so can't be a completely new business venture. Unlike full sponsorship for trading UK employers, an entity applying for a UKEW licence does not need to have a UK bank account but must still provide extensive supporting evidence.

'Non-trading' means that that there's no active UK presence or employees already on the ground in the UK, although the UK entity may already have UK clients/customers or taken provisional steps towards trading, like applying for VAT. The same requirement applied to sole rep applicants, except that they could also apply when there was no UK presence. UKEW licence applicants must have a 'UK footprint', so businesses will have to either set up an entity or lease UK premises or serviced office space before knowing whether the first UKEW visa will be approved. A wholly owned subsidiary company can be incorporated within a few days and that will enable the company to start registrations without trading, for example applying for PAYE (payroll registration).

A sponsor licence application is a formal application involving an online form with follow up submissions, including supporting documents about the overseas business and the UK footprint. Before granting a UKEW licence, the Home Office will assess the company's business plans and finances, based on the size of the international business, its previous activity and potential. This will be a case-by-case assessment, with an inevitable degree of subjectivity from case workers about whether a particular business applicant has sufficient funds or a credible business plan to support its expansion.

The exact supporting documents depend on the circumstances and type of business. There are alternative types of evidence that can be submitted, but typical documents for a UKEW licence include evidence of:

  • a UK footprint – entity incorporation or evidence of purchase or lease of business premises
  • an overseas trading presence – both that it has been trading for at least the last three years (there's an exception for Japanese companies, but they'll only be able to sponsor one UKEW visa, not up to five) and that it was active in the final 12 months before the application
  • planned expansion to the UK, including financial accounts or information to demonstrate capability to fund expansion and the formal business case
  • corporate governance documents and investigatory steps taken as part of UK planning.

Businesses are exempt from providing from some of the supporting evidence if the overseas company:

  • is listed on the London Stock Exchange or an international exchange considered to have equivalent levels of regulation to UK markets
  • is supported in its UK expansion by the Department for International Trade, the Department for Business, Energy and Industrial Strategy, or another UK government department, in which case a senior official of the relevant government department must provide a supporting letter, or
  • is a Japanese business expanding to the UK with less than three years trading activity in Japan, although if it uses the exemption, it can only sponsor one UKEW visa rather than up to five.

Visa eligibility

As UKEW is sponsored, much of the discretion available in sole rep applications has been removed. As well as having a UK job offer for a genuine vacancy from an approved sponsor, applicants must meet all of the strict visa requirements to qualify:

  • employment with the overseas business outside the UK in a senior manager or specialist role for at least 12 months, unless they are a “high-earner” (as defined above) or a Japanese national doing work for a Japanese company that is expanding to the UK under the UK-Japan trade agreement, in which case even new hires of the overseas business will qualify
  • UK annual salary of at least £42,400, or the minimum for the specific job if higher
  • the UK role must have a skill level at or above graduate level. The list of eligible roles covers multiple graduate level roles, including technical, sales or technology-based roles, as well as more general management positions. Sole rep had no minimum skill or salary level requirements and so was more flexible
  • although there's no English language requirement, there is a new finance (personal funds) requirement, which requires UKEW visa applicants outside the UK to have personal funds of at least £1,270 for every day of the 28-day period prior to the application (the threshold increases if there are accompanying family members). Unlike other sponsored routes, the sponsoring business cannot certify on the applicant's behalf
  • there’s no explicit rule on the maximum shareholding that the applicant can hold in the overseas business. But for all UKEW applicants, there must be a genuine UK vacancy, which could be a factor for majority owners.

For those living outside the UK, the UKEW visa application can only be submitted in the applicant’s country of citizenship or where they are legally resident, if different.

Visa conditions

UKEW visa holders can live and work in the UK, and travel abroad as much as they need to, but their right to work is tied to employment with their sponsoring business. Other than voluntary work, they are not permitted to work for any other business, even outside the working hours of the main job.

As with other UK visas, the applicant's qualifying partner and children under 18 can apply for dependant visas, which allow family members to accompany or join the UKEW employee. The partner will have an unrestricted right to work in the UK (except as a professional sportsperson or coach) and kids will be able to attend UK school.

Sponsorship imposes strict HR related compliance duties on the sponsoring business. The first UKEW applicant will be the “Authorising Officer”, which is a designated UK based appointed role on the licence. The AO has responsibility for those sponsor obligations, which include record keeping, employee monitoring and reporting duties. Failure to comply with sponsor duties can lead to revocation of the licence, which would cancel any visas sponsored under that licence, so the post-approval visa compliance is just as important as the process to grant the visa.

UKEW teams

The sole representative visa was only available to one employee of the overseas business.

The UKEW visa is available for up to five employees, including the first employee that will be the AO. This allows a team of workers to be sent to the UK to launch the UK business, but the same visa eligibility conditions must be met by each person. There will also be a short gap between the AO arriving and the other team members, as there’s a registration process the AO must go through after visa approval.

To qualify for the UKEW visa, each team member must meet the service requirement, be coming to the UK to perform a skilled graduate level role and be paid salary above the required level. This means that, for example, the UKEW visa could not be used for an Executive/Personal Assistant administrative type role supporting a senior executive on a UKEW visa, as that UK role would not meet the minimum skill condition.

Timing

The new requirement that the business first applies for a UKEW licence means there is a longer lead-in time to get the first employee to the UK. But if there's a senior team that needs to work in the UK together from or shortly after launch, it should be a quicker route for the team to relocate to the UK than waiting for Skilled Worker sponsorship. We'll need to wait and see, but we expect that the processing time for a UKEW licences will be the same as for Skilled Worker licences - around eight to ten weeks. On paper there's a Priority service to expedite processing but because it is capped without extra capacity to support GBM routes, in practice it has been unavailable to sponsors.

Visa processing time outside the UK depends on the country, but at the time of writing due to a focus on visas for those leaving Ukraine, all expedited processing options for UK visa applications submitted outside the UK have been suspended. Ordinarily, visas can be processed within a couple of weeks with expedited processing, but visa processing could easily take six weeks or so while that suspension is in place.

It remains to be seen whether the various hoops that employers must jump through to use the UKEW route will make it sufficiently attractive for businesses to use when launching into the UK. Businesses that have UK government department support or a stock exchange listing will find it easier to navigate. In many cases UKEW will be the best route where a skilled team is needed on the ground in the UK to coincide with launch, but our key recommendation following these changes is for businesses planning a UK set up to take immigration strategy advice early on, so that all options are considered.

If you would like to explore this further, please do get in touch with us.

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