A Tier 2 visa is available to those who have been offered a skilled job in the UK and are outside the EEA and Switzerland. In order to obtain a Tier 2 visa, you must receive sponsorship from a licensed sponsor. Not every organisation is permitted to sponsor applicants, but they must be licensed to do so, in order to be eligible to receive this.
The licensed sponsor will provide you with a certificate of sponsorship to prove that you qualify for the Tier 2 visa. You can apply for the Tier 2 visa up to 3 months before your employment start date. If you are on a Tier 2 visa, it is possible to start a business, however, it is not straightforward.
Employed and Self-Employed
If you are employed in the UK, you are hired under a contract, which means you have the right to receive at least minimum wage and other benefits including holiday pay. As a self-employed person, i.e. running your own business, you do not have the same workers’ rights.
You determine your own wages and are not protected by the National Minimum Wage and you won’t receive holiday pay and other benefits. If you are on a Tier 2 visa, it is more difficult to start your own business, as you need sponsorship.
There are no options to obtain a Tier 2 visa without any sponsorship, and you must work for the employer who provides the sponsorship. You cannot set up a business with or in addition to the sponsorship. In this case, you would need a Start-up, Innovator, Tier 1 Entrepreneur or Tier 1 Graduate Entrepreneur visa.
Tier 2 – Self Employed
There are options for you if you wish to set up a business on a Tier 2 visa and many do so by working on a self-employed basis, with sponsorship from an employer. There are some restrictions on this though. The sponsor must issue a contract to you, they must ensure you receive £30K per year and they must provide evidence that there are no people within the area who could fulfil the requirements.
This ultimately means that you can work via your own limited company and be self-employed, but you would need to have one employer you work for. For example, you may work as a self-employed hairdresser, but you have a contract with one salon, and they provide you with sponsorship.
You still have a business, with your own clients, but you work under the one salon. The employer must follow the requirements of issuing a Tier 2 visa, but it is possible to still run your own business under this.
What if you work for an employer, like the example above, but you would also like to provide your services to clients in their home, in addition to the work you do with the salon, is this permitted? If your skills are on the Shortage Occupation List it may be possible, but it must be less than 20 hours work and should not get in the way of the sponsored employment.
Checklist for Starting a Business
There are over 5.8 million small businesses in the UK, but unfortunately, it can be quite difficult for foreign nationals to start up a business in the UK. If you are looking to start a business, these are some points to address.
- What visa do you have? If it’s a tier 2 visa, you will need to try and obtain sponsorship from an employer, who will allow you to work on a self-employed basis. Many employers will welcome this, as it saves them from paying benefits associated with employees, while some won’t have the option to offer this. If you can’t obtain this visa, don’t worry, as there may be other business visa options available to you.
- Determine the structure of your business and how you’ll operate. For example, will you work as a sole trader or a limited company. It is important to obtain your visa before you determine how your business will look, as you will need to follow the instructions of the visa.
- Register with Company House – when you have successfully obtained a visa, you can register the business on Company Houseandregister yourself for tax.
Why Start a Business in the UK?
There are various reasons why starting up a business in the UK can be a good idea. The UK has a lot of exceptional universities, so there is a wide pool of excellent candidates to choose from. If you are looking to set up a business and potentially hire employees, the UK is a great place to do it.
English is most widely spoken in the UK, so if you are starting a business from overseas, it can give your business much more growth and potential. English speaking countries tend to prefer to do business with other English-speaking countries, which is why being based in the UK can provide you with greater opportunities.
There are low unemployment rates in the UK too, which means more people are buying and spending. If you have a business in the UK, you can expect it to be more successful than if you started a business in a country with higher unemployment rates.
High unemployment rates mean there are less people spending, which is not good if you want to grow your business.
Starting up a businesscan be exciting, but also a little daunting, especially in a different country. There are all kinds of things to consider when you open up a business, but you must ensure you are meeting the requirements of your visa, as otherwise, you could start up a business and end up having to return to your original country – without warning.
Tier 2 visas are a great prospect, if you can find an employer who will offer sponsorship. If you may have already obtained the Tier entrepreneur visa, then you may be considering a Tier 1 entrepreneur visa extension.
If so, then get in touch with Immigration lawyers London. If not, all is not lost, as there are other visas available for start-up businesses, although you may need to have money in your account to be accepted for some of these.