Changes to the immigration rules - electronic authorisation scheme, the new founder route and other changes

Changes to the immigration rules - electronic authorisation scheme, the new founder route and other changes

The new sponsorship roadmap

A number of changes to the Immigration Rules are due to come into effect in April 2023, including rules paving the way for the introduction of the Electronic Travel Authorisation (ETA) scheme, and the launch of a new Innovator Founder route. Other changes include updates to the Youth Mobility Scheme and the rules relating to returning residents and long residency applications.

Electronic Travel Authorisation (ETA) scheme

Broadly, the ETA scheme is a planned electronic system that will be used to pre-check people travelling to the UK for visits. Although the relevant Immigration Rules come into force on 12 April 2023, the ETA scheme is only due to be rolled out in stages beginning later this year.

Once fully implemented, individuals seeking permission to enter the UK as a visitor for up to six months or as a creative worker for less than three months who do not already have a visa (or who do not require a visit visa under the current rules) will need to obtain an ETA before they travel to the UK. The ETA scheme will not however apply to marriage/civil partnership visitors.

Irish citizens or those lawfully resident in Ireland, individuals who either have the right to abode or a Frontier permit, or who are exempt for other reasons (e.g. diplomats) will not require an ETA.

There are several suitability requirements which must be met for a successful ETA application. Notably, an ETA must be refused if an applicant has overstayed their permission to stay in the UK when they were aged 18 or over or if they have failed to disclose relevant facts in their application. Previous criminal convictions in the UK or overseas, either in the last 12 months or at any time if the conviction resulted in a prison sentence of 12 months or more, will also mean the applicant will not be able to obtain an ETA. 

The Home office has indicated that ETA applications should be decided within three days of submission unless further checks are required. Given this promise of a quick turn-around, it is anticipated that the decision-making will be automated, with no grounds for discretion for applicants who do not meet the requirements. If an ETA is refused or if an applicant is unable to apply for an ETA, they will need to make a full entry clearance application.

After an ETA is issued, it will be valid for multiple entries to the UK, either for two years or until the expiry of the passport used to make the ETA application (if this is earlier).

Phased roll-out

The first two stages of the ETA scheme’s phased roll-out are as follows:

  • From 15 November 2023 – ETAs will be required for Qatari nationals travelling to the UK
  • From 22 February 2024 – ETAs will be required for Bahraini, Jordanian, Kuwaiti, Omani, Emirati or Saudi Arabian nationals travelling to the UK

We understand that the Home Office plans to extend the ETA scheme to enable it to conduct pre-travel database checks on non-visa nationals during the course of 2024.

Innovator Founder route

A new Innovator Founder route is being introduced, which amalgamates and replaces the existing Innovator and Start-up routes. This will come into force for applications made on or after 13 April 2023. Like the previous routes, the new scheme is aimed at overseas nationals who wish to establish a new and innovative business in the UK. 

In a positive development, the previous requirement for a £50,000 investment will no longer apply “provided that the endorsing body is satisfied the applicant has sufficient funds to grow their business.” The restriction on undertaking additional employment will also be removed. Under this new route, applicants will be permitted to take other employment (at skill level RQF 3 or above), in addition to working for the business they have established. This secondary employment must not interfere with the individual’s main reason for being in the UK and they must remain involved in the day-to-day management and development of their business.

Before applying under this route, applicants will have to obtain an endorsement from an approved endorsing body in the UK. This is likely to be a fairly lengthy process and applicants will need to demonstrate by way of a detailed business plan and other evidence that their business idea is innovative, viable, and scalable. The applicant must show they have a genuine, original business plan that meets new or existing market needs and/or creates a competitive advantage; and the applicant’s business plan must be realistic and achievable based on the applicant’s available resources. The applicant must also have, or be actively developing, the necessary skills, knowledge, experience and market awareness to successfully run the business and there must be evidence of structured planning and of potential for job creation and growth into national and international markets.

There are concerns that use of this new route may be inhibited by the onerous obligations imposed on endorsing bodies, which must submit an endorsement letter confirming that the applicant is "a fit and proper person" for endorsement and confirming that it has "no concerns over the legitimacy of any sources of funds or modes of transfer of funds invested by the applicant into their endorsed business". As endorsing bodies may not be able to access all relevant information (e.g. where an applicant has been the subject of non-criminal sanctions abroad), providing such a confirmation could give rise to a risky level of liability for an endorsing body.

Applicants will also need to meet English language and maintenance requirements. 

Applicants may be accompanied to the UK by certain dependants, including children under the age of 18 and their spouse, provided their family member obtains the required permission to enter as a dependant. However, it’s worth factoring in that, once the main applicant under the Innovator Founder route has settled or naturalised in the UK, it will not be possible for a dependant partner or child of an Innovator Founder to apply for entry clearance or limited leave as a dependant of an Innovator Founder. Instead, they would need to meet the more onerous requirements under Appendix FM.

Importantly, time spent under the Innovator Founder route will count towards continuous residence for the purpose of qualifying for indefinite leave to remain (ILR) so this is a potential route to settlement after three years, provided very strict and complex eligibility criteria are met.

Youth Mobility Scheme

From 12 April 2023, Australia and Canada will see an increase in their annual allocation under the Youth Mobility Scheme, from 30,000 to 35,000 and 6,000 to 8,000 respectively. Although India’s ballot saw significant uptake in February 2023, its visa allocation under the scheme will remain at 3,000.

The upper age limit for New Zealand nationals making a Youth Mobility application on or after 29 June 2023 is also increasing from 30 to 35 and New Zealand nationals will be granted three, rather than two years’ immigration permission. In line with the UK and New Zealand trade deal, New Zealand nationals who already have two-year Youth Mobility permission will be eligible to extend their stay for a further 12 months without needing to meet any financial requirements.

Returning residents

From 12 April 2023, individuals who previously held ILR before leaving the UK for a period of over two years may now potentially be able to reclaim their settled status. Previously, these individuals risked losing their ILR status if they were absent from the UK for more than two years. To achieve this, returning residents must first apply for indefinite leave to enter from outside of the UK and then demonstrate that they have "strong ties" to the UK and that they intend to make the UK their permanent home.

Long residence

The latest changes to the Immigration Rules have materially narrowed the ways in which individuals can accrue long residence for the purposes of applying for ILR. In clarifying that a person must have been lawfully and continuously resided in the UK for 10 years, the Rules will now exclude any time spent on immigration bail or, importantly, any time spent with entry clearance or leave as a visitor, short-term student, or seasonal worker in calculating long residence. Spending time in the UK in these categories will presumably also break one’s period of residence. This is likely to mean that fewer individuals will be eligible to obtain indefinite leave to remain on the basis of 10 years’ lawful residence in the UK. 

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