Immigrant Entrepreneurs

3 Obstacles You'll Have to Overcome as a Non-EU Immigrant to Start a Business in the U.K.

Having decided to set up a business in the U.K. is an excellent step in the right direction, but unfortunately, the hard work doesn't stop there.
3 Obstacles You'll Have to Overcome as a Non-EU Immigrant to Start a Business in the U.K.
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Guest Writer
CEO and Founder of Solvid and Pridicto
6 min read
Opinions expressed by Entrepreneur contributors are their own.

The U.K. has always been a place of great opportunity for entrepreneurs from all around the world.

While the political landscape of England, Scotland, Wales and Northern Ireland may have been subject to seismic shifts in recent years that has added uncertain elements to the process of setting up a business as a non-EU immigrant, there's still plenty of cause for optimism at making a startup work on U.K. shores.

Related: U.K. Set to Welcome More Foreign Entrepreneurs Thanks to New Start Up Visa

In fact, the Department for International Trade proudly states that corporation tax in the United Kingdom is still the lowest of the world's 20 largest economies. It also presents the fewest barriers to entrepreneurship on the planet, taking as little as 48 hours to formally register a company.

Of course, this isn't to say that setting up a business in the U.K. as a non-EU immigrant doesn't come with obstacles to overcome before you can start gathering those customers and tracking profit margins. Here are three of the biggest hurdles that you'll face when coming to the United Kingdom to build a startup.

1. Immigration and vetting

While you do not need to be a citizen to start a business in the U.K., you will need to hold a valid visa for your status as an entrepreneur upon entry into the country.

The most appropriate visa for your position as a business owner would be the Tier 1 (Entrepreneur) visa. Fortunately, this level of visa is held in the highest regard and works on a points-based system.

Despite uncertainties over the future of non-domestic working visas and the freedom of businesses to trade with Europe, last year's immigration statistics showed a 13 percent rise in applications for the Tier 1 Entrepreneur visa -- which goes some way in illustrating the international confidence in the U.K. economy. However, the rejection rates for applicants stands at around 42 percent.

It's imperative to get your visa application right to ensure that you have the best chance of being granted the right to run a business in the U.K., so let's take a more in-depth look at some of the issues that entrepreneurs face.

The level of vetting exerted by the U.K. Home Office is meticulous. Any supporting documents that accompany your demand must be officially certified originals and not copies. You must also refrain from any ambiguity in your answers while completing your submission.

Related: 10 Questions You Can Expect to Hear in Your U.K. Entrepreneur Visa Interview

Another important vetting procedure is the "genuine entrepreneur" test. It's likely no coincidence that the Tier 1 Entrepreneur visa applicants' success rate hit 81 percent in 2012, a year prior to this test's implementation. The genuine entrepreneur test rigorously assesses the viability of your business plan.

To pass this assessment, you'll need to detail the credibility of your vision to caseworkers clearly. Your best chance of success will come from making your plan as easy-to-follow and straightforward as possible while making sure that no important details are spared.

You can also expect to be interviewed about your visa application. This stage of the process has been criticized in the past for being too rigid and not allowing the applicant to provide added clarity or spontaneity in their responses. With this in mind, you may have to practice giving succinct and informative answers to any anticipated questions about your business plan. 

Finally, it's important to be aware that timing is of the essence when it comes to constructing a strong visa application, and gov.uk recommends that you apply between one month and three months of the date you intend to travel -- and even has a helpful estimator to let you know when you can expect a response.

Remember that you may consider hiring an immigration lawyer to help you strengthen your case, and that you're able to appeal initial refusals.

Related: Why I'm Moving My Company From the U.K. to the Continent

2. Investment

For many, the biggest obstacle to overcome is the financial requirements associated with being granted a Tier 1 Entrepreneur visa.

Not only is it worth pointing out that the application process costs up to £1,277 per-person, plus an Immigration Health Surcharge (IHS), but those wishing to gain entry into the U.K. on this visa are expected to have significant financial investments.

It's a requirement of all applicants to have access to investments of at least £200,000. You can also successfully apply if you have access to £50,000 that's been granted through one or more Financial Services Authority (FSA) regulated venture capital firms, U.K. Entrepreneurial Seed Funding competitions, one or more U.K. government departments or if you've been granted leave to remain as a Tier 1 Graduate Entrepreneur migrant.

This is especially tricky because you're not allowed raise the £50,000 from your own funds or through third-parties. However, you're also able to be accepted for a visa if you have £50,000 invested in another U.K. based business -- this is provided that the investment took place in the last 12 months.

Related: How to Choose the Right European Country to Start Your Business

3. Competition

The United Kingdom is an intensely competitive environment for new businesses, and fledgling ventures offering quality products are in danger of being suffocated before they get a real opportunity to grow.

When arriving to set up a business in the U.K., it's vital that you prepare to make losses early on, regardless of the strength of your unique selling proposition and business plan.

Brand awareness and monopolies are rife, and the smartest entrepreneurs prepare for the difficulty of establishing themselves in such a strong market by making modest movements in terms of office space and scalability.

Having decided to set up a business in the U.K. is an excellent step in the right direction, but unfortunately, the hard work doesn't stop there. Remember to keep this in mind when deciding on renting office space and hiring staff. You may have worked out an ideal trajectory to aim for the stars, but there's no need to hurry the journey.

Disclosure: I'm not a lawyer (and never wanted to be). I'm neither experienced or qualified to give legal advice. Please take suggestions in this article with a grain of salt.

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