The UK has provided a healthy platform where entrepreneurs can start or expand their ventures. A route that could be utilised by those who wish to set up an enterprise in the UK is the self-sponsorship route under the Skilled Worker visa route. Although people refer to the "self-sponsorship visa," it would be some visa category in and of itself. Instead, that would mean some process through which one could set up a business in the UK and then use that business to sponsor oneself for a Skilled Worker visa. This route would provide an adequate solution for those business owners or entrepreneurs not qualified for other business visa routes, such as the Innovator Founder Visa. An aspiring business owner must seek an understanding of self-sponsorship and how to set up a business in the UK. 

Understanding Self-Sponsorship: Not a Visa Category

Though generally called a "self-sponsorship visa UK" it is not a visa category. Self-sponsorship entails the entrepreneur establishing a UK-based business and obtaining a Skilled Worker visa by sponsoring his own company. Indeed, this route will be one of the most attractive options for entrepreneurs who want to run a business and gain the right to work in the UK.

It starts with establishing a business in the UK. After establishment, the entrepreneur's company applies for a sponsor license to sponsor the entrepreneur as a worker at the requisite skill level. This route also enjoys equal or similar popularity amongst non-EEA entrepreneurs, more so from India. Those with a genuine proposal and intention appreciate the self-sponsorship route to set up or expand in the UK.

Eligibility criteria for self-sponsorship

1. Genuine Business Intention: The entrepreneur is supposed to develop a valid business idea in order to establish a credible business in the United Kingdom, able to meet market demand while fulfilling the requirements set out by the Home Office for running a viable and scalable business.

2. License as a Sponsor: It shall apply for a license to be a sponsor, enabling it to sponsor any employee from overseas, including the entrepreneur. An application for a license must show that the business can carry out the duties of a licensed sponsor and relevant UK employment and immigration law.

3. English Language Proficiency at the CEFR B1 Level: The entrepreneur must prove that he has attained an intermediate level in the English proficiency exam approved through an approved English language test or a degree taught in English.

4. Creation of New Jobs: In the application, he must prove that his business will create at least two new jobs in the UK, thus developing the economy.

5. Salary Threshold: The salary threshold shall at least not be less than the minimum prescribed for a Skilled Worker visa at £26,200 per year, or, if higher, the "going rate" for the occupation.

6. Business Operation: The business is capable and can actively meet all its obligations as an employer and as a sponsor of Skilled Workers, including the entrepreneur.

Setting Up a Business in the UK

Setting up a UK business is the first step in the self-sponsorship route. To be correctly registered, the entrepreneur must set up a legal entity, usually a limited company. Companies House is responsible for company registration, and the procedures are easy. The company needs to be registered and must comply with the various UK taxation laws. Having VAT registration in case the turnover exceeds a threshold limit and proper bookkeeping is also compulsory.

Entrepreneurs should adequately research the business area, market opportunities, and customer needs while setting up the business. They should conduct detailed market research and check customer satisfaction.

Sponsor Licence

Once the business has been set up and is running, the second step towards commencing a business in the UK via the self-sponsorship visa route is to apply for a licence to sponsor. A company must possess a sponsor licence to employ and sponsor workers under the Skilled Worker visa route, including the entrepreneur's self-sponsorship.

First, for a sponsor licence, the business must demonstrate that it is a genuine business capable of supporting the sponsorship responsibilities, which include keeping proper records of staff and adhering to UK laws relating to employment. You also need to ensure that sponsored employees are working in the role they are hired to do. The company must demonstrate that it has the resources and the capability to operate and employ staff.

The Home Office would consider the firm's history, whether the business is genuine, and whether employment could be offered to the people while granting the license to the sponsor. Therefore, it becomes necessary that all the documents are in place, starting from a business plan and financial statement to proof of operational activity.

Sponsoring Yourself Under the Skilled Worker Visa

The next step in setting up under the self-sponsorship route is to sponsor yourself when the application for a sponsor licence is successfully granted. A visa application by a self-employed individual with personal and business details should prove that a business can afford to employ that entrepreneur.

An immediate advantage of self-sponsorship is that the entrepreneur controls the visa application process through their company. Naturally, this suggests that the company must fulfil its obligations as the sponsor and that the entrepreneur must meet all salary and qualification requirements under the Skilled Worker visa.

Advantages of Self-Sponsorship to Entrepreneurs

1. Control and Flexibility: Since this process deals with business and a visa, the whole procedure remains in the hands of the entrepreneur. Thus, this option remains flexible for those who want to be in control and work within their company.

2. Employment and Contribution to the Economy: Entrepreneurs opening an entrepreneur centre generate employment and contribute to the economic cycle by producing goods for market demand of such goods or rendering services in the United Kingdom.

3. Route to PR: The Skilled Worker visa route provides a path toward ILR in five years and British citizenship. Therefore, entrepreneurs who are successful in their enterprises can plan permanent stability in the UK.

4. Business Growth Opportunities: Greater than the business-friendly environment in the UK is the great potential for growth, innovation, and further expansion, especially for those businesses capable of tapping its vibrant and diverse markets.

Common Challenges in the Self-Sponsorship Route

Every route has its challenges. The self-sponsorship route to setting up a business in the UK is treading on a minefield of complicated legal and regulatory frameworks. For one thing, getting a sponsor licence can be rather long-drawn and quite a detailed process with adherence to compliance requirements.

This will also involve a substantial financial undertaking in setting up the business and satisfying the salary thresholds and other visa requirements. An entrepreneur must have enough cash flow to meet those obligations for his business.

The Home Office scrutinises the applications closely to ensure only valid businesses and Skilled Workers are granted visas. The sponsor licence or visa application will be refused if an applicant fails to demonstrate any requirement, whether record-keeping or proof of jobs created.

Why is Legal Representation Imperative?

Given the complexity regarding the self-sponsorship route on how to start a business in the UK, advice from professionals is always recommended. A Y & J Solicitors specialises in advising on applications for setting up businesses in the UK and guiding through the immigration process. From helping you prepare your business plan to preparing the sponsor license application, a lawyer will ensure that everything complies with UK immigration laws, increasing your chances of a successful application. With an experienced immigration lawyer like A Y & J Solicitors, you will be guaranteed to avoid costly mistakes to achieve your goal of setting up a business in the UK.