The UK government has announced that it will launch a new visa route for international entrepreneurs who are hoping to move to the country to start a business. The new visa route, dubbed the Innovator Founder, will replace the current startup and innovator visa routes from April 13, 2023. The announcement has been welcomed by overseas entrepreneurs who have long complained about the expensive endorsement system for UK visas. The change is expected to make things easier for international founders who want to start an innovative business in the UK. However, it also raises some questions about the impact of the reduced number of endorsing bodies on the quality of the endorsement process.
The current startup and innovator visa routes require founders to seek endorsement from one of numerous endorsing bodies, most of which are private incubators, accelerators, and community builders. These endorsing bodies agree to endorse startups if they take part in their mentorship or acceleration programmes. However, this often means that founders have to pay hefty fees or give away equity in their startups. Under the new system, founders will have to pay fixed prices for endorsement, including £1,000 for endorsement consideration and £500 for checkpoint assessments at 12 and 24 months. This totals £2,000 for a three-year visa cycle.
The change is part of a reform of the country's startup and innovator visa routes, which are designed to attract entrepreneurial talent from overseas and foster the development of new innovative businesses in the UK. The new visa route will reduce the number of endorsing bodies from over 60 to just three. There will also be no requirement for applicants to take on any business support services if they do not wish to. The endorsement process has been described as a ripoff, with some endorsing bodies requesting as much as £30k to join their programme and get the letter, while others even ask for equity.
In 2022, the UK Home Office granted 299 innovator visas and 377 startup visas. The new rules, which are supposed to come into play on April 13, will effectively merge the two existing routes into one scheme, dubbed the Innovator Founder route. Founders will no longer be required to invest (or have invested) at least £50k in the business (as is currently the case for the innovator visa), and will be allowed to work outside the UK while developing the startup.
The reduced number of endorsing bodies raises some concerns about the quality of the endorsement process. Some endorsing bodies are known for their expertise and experience in certain industries, while others have a reputation for being less stringent in their assessments. The reduction in the number of endorsing bodies may mean that some international founders who have innovative business ideas that fall outside the expertise of the three approved endorsing bodies may find it difficult to obtain endorsement.
The endorsement process is a critical part of the visa application process. Endorsement is required to prove that the business idea is innovative, scalable, and has the potential to contribute to the UK economy. The endorsing body is responsible for assessing the business idea, the founding team, and the potential for success. The endorsement letter is then used to apply for the visa.
The new system aims to deliver a simpler, easier-to-use system for applicants. However, it remains to be seen how the three approved endorsing bodies will be able to provide sufficient coverage for all innovative business ideas. The endorsing bodies will need to have the expertise and experience to assess a wide range of innovative business ideas across various industries.That being said this streamlines the process and reduces the burden on entrepreneurs, who previously had to navigate a complex network of endorsing bodies.The reform of the endorsing body system is a positive step for the UK's entrepreneurial ecosystem. The new system is more transparent and accessible, which will make it easier for international entrepreneurs to start and grow businesses in the UK. The fixed fee for endorsement means that entrepreneurs can budget accordingly and avoid unexpected expenses. The reduction in the number of endorsing bodies also makes the process more straightforward and less confusing.
Overall, the new changes to the endorsement system for UK visas are expected to benefit overseas entrepreneurs. By simplifying the process and eliminating hidden costs, the UK government is sending a message that it welcomes international talent and is committed to supporting the growth of innovative businesses in the country.