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Chris Harber
Chris Harber,
HEAD OF IMMIGRATION
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Tech firms and the new immigration rules – a time to seize opportunities
25 May 2021

As with the wider economy, tech companies have now had nearly 6 months to familiarise themselves with the new immigration rules and more specifically the new Skilled Worker category. Companies which already have a Sponsor Licence are well placed to adapt to these changes, however companies who do not currently hold a sponsor licence will need to obtain one in order to recruit both non-EU and EU citizens. Any EU citizens resident in the UK before 11 pm on 31 December 2020 can apply to the EU Settlement Scheme, therefore they do not require sponsorship to be able to work in the UK.

Bigger firms that have established global mobility programmes and in-house specialists are quickly adapting to these changes, however there is a significant number of firms which will need to adapt in order to remain competitive in the labour market. For example, companies currently based outside the UK looking to move into the UK market need to have a UK entity in order to be able to apply for a Sponsor Licence, and will need to have at least one senior person based in the UK who can act as the Authorising Officer, the person in charge, of the licence. The firm can either chose to employ someone locally who is already in the UK, or alternatively send an existing employee to the UK using the Sole Representative category who can then apply for the licence once the UK entity has been established.

The Sole Representative category is a useful solution in this scenario, as it allows a senior level employee of the overseas company to come to the UK to set up operations. Once the employee has arrived in the UK and set up the UK entity they can then act as the Authorising Officer and apply for the sponsor licence accordingly. From there, any staff of the company (or group of companies) based outside the UK can transfer to the UK by way of a Skilled Worker or Intra-Company Transfer (ICT) application under the new rules.

Unlike the previous Tier 2 (General) category, there is no requirement to conduct a resident labour market test (RLMT) for Skilled Worker applications and the minimum skill and salary thresholds have been reduced.  Fort these reasons, along with the fact that the Skilled Worker category can lead to indefinite leave to remain (ILR) after 5 years, it is likely that the ICT category will become less popular with employers over time compared to the old Tier 2 (ICT) category. However, it is important to remember that the Skilled Worker route is primarily intended to be used for overseas nationals who are filling permanent roles in the UK that arise from skills shortages. As such, some of the requirements for the Skilled Worker category do not necessarily suit the nature temporary assignments.

For some firms the old Tier 2 (General) rules on share ownership were problematic for senior level employees and founders. In the past, unless the employee’s salary was at least £159,600 they were prohibited from applying if they owned more than 10% of the shareholding in the UK entity. The new Skilled Worker category has no such restriction, making it significantly easier for senior employees and founders to be able to be sponsored in the UK. Nevertheless, sponsors will still need to be aware of the genuine vacancy requirement that the job has not been created so the applicant can apply for a visa. 

As Boyes Turner have previously advocated, tech companies that have international operations need to react quicker than most other sectors to market conditions and as such need to be agile in their use of the UK immigration system. As described above the sole representative category is a very useful tool, however as the name implies they are limited to just one person transferring to the UK. This will be problematic for many tech organisations as in many cases it will not allow them to react quickly enough to market fluctuations by the time the sponsor licence is obtained and the necessary visa applications submitted in order to get a team onto a client site. 

Thankfully, the Home Office do appear to be aware of these limitations of this route, and as part of the Home Secretary’s announcements on 24 May it was announced that a new ‘Global Business Mobility’ route will be launched which will incorporate Intra-Company Transfers, Sole Representatives, contractual service providers and import/export related secondments. This route is not likely to open until Spring 2022 so it’s some way off yet, nevertheless it is certainly a move in the right direction. 


 

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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