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Barriers for the Brightest and the Best?
New migration routes for investors and entrepreneurs are popular among potential applicants and have been well received. But a series of barriers remains that may discourage investors and entrepreneurs from basing themselves and their businesses in the UK. These are highlighted by a new report published yesterday by the Government’s Migration Advisory Committee (MAC).
The Economic and Labour Market Impacts of Tier 1 Entrepreneur and Investor Migrants, which was prepared for the MAC by the National Institute of Economic and Social Research (NIESR) with the support of Oxford University’s Migration Observatory, looked at the functioning and potential impact of Tier 1 Investor and Entrepreneur routes.
These routes account for only about 700 migrants per year, though the group is considered particularly important for its role in stimulating business and investment opportunities.
The report shows that issues such as the difficulties foreign nationals encounter in setting up bank accounts and the requirement for investors to be present in the UK for at least 180 days per year are among the factors that make it more difficult for high-net-worth individuals and entrepreneurs to base themselves in the UK. They are also expected to become established relatively quickly, which is challenging in the current economic climate.
Authors of the report undertook a series of interviews with current Tier 1 Investor and Tier 1 Entrepreneur migrants to establish what factors encouraged them to base themselves in the UK – which included the time-zone, schools, culture, people and even the weather – and which factors created difficulties.
Heather Rolfe, Principal Research Fellow at NIESR, said: “Tier 1 Entrepreneur and Investor routes are designed to encourage high-value migrants to invest in the UK by basing themselves and their businesses here. Those we spoke to were very positive about the UK, but expressed frustration at the bureaucracy and other barriers they face that make it hard for them to operate in a normal business environment, which is clearly counterproductive.”
Some key areas identified by the report as barriers to entrepreneur and investor migration are
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The lack of flexibility over the minimum fund requirement of £200,000 for entrepreneurs, which may deter younger people setting up in business for the first time.
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Difficulties experienced by Tier 1 entrepreneurs with banks, both in opening personal accounts and in borrowing.
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The need for business support both at application stage and on arrival in the UK
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Lack of flexibility between the entrepreneur and investor categories, which may discourage entrepreneurial activity by investors .
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The lack of discretion available to the UK Border Agency over achievement of milestones during the visa renewal process, in recognition of the difficult current climate for business, relatively slow growth of some types of businesses and impact other than hiring staff.
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The inflexibility of the 180 day residency requirement - given the international business activities of many investors – and the practice of retaining passports for lengthy periods during renewal.
Dr Rolfe added: “When politicians talk about attracting ‘the brightest and the best,’ these are the sort of people they mean – so if they want to convey a message that Britain is open for business, it is important that serious consideration is given to how to make sure that the Tier 1 Investor and Entrepreneur routes work as they are intended. This is a very small group that has no discernable impact on overall net migration, but may include individuals that will bring great value to the UK’s business sector.”
Contact details
Dr Heather Rolfe 020 7654 1937; 07766 122991
Dr Max Nathan 07977 190 141
Notes for editors
The Economic and Labour Market Impacts of Tier 1 Entrepreneur and Investor Migrants, which was prepared for the MAC by the National Institute of Economic and Social Research (NIESR) with the support of Oxford University’s Migration Observatory. The report's authors are Max Nathan, Heather Rolfe and Carlos Vargas-Silva.
