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Advice needed for investment for tier 1 entrepreneur visa

Only for UK Tier 1 (Entrepreneur) points system. This route is now closed to new applicants.

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naveednikka
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Advice needed for investment for tier 1 entrepreneur visa

Post by naveednikka » Mon Oct 06, 2014 1:19 am

can we take the money from our investment in business account as a salary for director if our business is quiet ? and if yes will that be counted as investment in business ? and wot does that mean from policy guidance please

The amount of money invested should not:
▪ include the value of any residential accommodation or property development, or property
management; or
▪ be in the form of a director’s loan, unless it is unsecured and is subordinated in favour of the
third-party creditors.

samaygrg
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Location: United Kingdom

Re: Advice needed for investment for tier 1 entrepreneur vis

Post by samaygrg » Mon Oct 06, 2014 8:18 am

naveednikka wrote:can we take the money from our investment in business account as a salary for director if our business is quiet ? and if yes will that be counted as investment in business ? and wot does that mean from policy guidance please

The amount of money invested should not:
▪ include the value of any residential accommodation or property development, or property
management; or
▪ be in the form of a director’s loan, unless it is unsecured and is subordinated in favour of the
third-party creditors.

You can take salary as director of your company irrespective of how business is performing [regarding this nothing is mentioned in HO policy guidance, I think its entirely up to your internal organizational policy], however, the amount you have taken as director's salary will not be counted in your required total sum of the investment.

naveednikka
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Re: Advice needed for investment for tier 1 entrepreneur vis

Post by naveednikka » Mon Oct 06, 2014 9:43 pm

Thanks for you reply mate but one of your colleague ashfaqsangar (i think) gave reply to one person that salary taken as director when ur business is quiet can be counted as investment , AND moreover can you please tell the ways where we can spend the money in as investment as i have been already spending money on one following things

LEAFLETTING
BUYING FURNITURE
BUYING LAPTOPS
INSTALLING SYSTEMS
BUYING CAR

samaygrg
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Re: Advice needed for investment for tier 1 entrepreneur vis

Post by samaygrg » Tue Oct 07, 2014 8:48 am

As far as I know the guidance, there is no condition set out to be considered ' director's salary as part of investment' and I do not know how and from where, they derived that statement.

Regarding the investment, it is nothing but the business's expenditure as per HO, which could be any rational expenses like staff salary, HRD, purchases (stationeries, assets), office rental, utilities and other associated expenses.
_______________________
'It is good to celebrate the success, but, it is the best to learn lessons from the failures'

GLL
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Re: Advice needed for investment for tier 1 entrepreneur vis

Post by GLL » Tue Oct 07, 2014 4:37 pm

The Immigration rules paragraph 245 D (c) clarifies what "spent for the purpose of the business excludes:

'Spent' excludes spending on:

(1) the applicant’s own remuneration,
(2) buying the business from a previous owner, where the money goes to that previous owner rather than into the business,
(3) investing in other businesses, and
(4) any spending which is not directly for the purpose of establishing or running
the applicant’s own business or businesses

MTZ510
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Re: Advice needed for investment for tier 1 entrepreneur vis

Post by MTZ510 » Tue Oct 07, 2014 9:55 pm

Question is are these rules applicable to extension candidates or only meant for initial entry clearance?
GLL wrote:The Immigration rules paragraph 245 D (c) clarifies what "spent for the purpose of the business excludes:

'Spent' excludes spending on:

(1) the applicant’s own remuneration,
(2) buying the business from a previous owner, where the money goes to that previous owner rather than into the business,
(3) investing in other businesses, and
(4) any spending which is not directly for the purpose of establishing or running
the applicant’s own business or businesses
Always help others..... it always come back to you.
Even if i know the answer ... i have this habit of confirming from others..

Expatinlaw
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Re: Advice needed for investment for tier 1 entrepreneur vis

Post by Expatinlaw » Tue Oct 14, 2014 11:13 am

Hi all

I would like to restart this discussion about investment issues within a Tier 1 (E) Visa framework.

I read a few general discussions about investments but there are no talks about specific options or issues that an applicant may be faced with when demonstrating/proving his investment.

To start with I am giving you my case:

I`m a Tier 1 (E) visa holder approaching my extension time next year.

In terms of my background, I`m a foreign qualified highly-skilled professional with an appropriate English Master degree. Currently, I`m running my ltd and doing pretty well so far generated £40k in my first trading year. I just about to obtain my English qualification licence that allow me to provide full scale service in the field of my business in England and expand the practice further. I have a respectful accounting firm to look after books. I hired a secretary (my wife) and now just about to hire a business development manager in order to fulfil the employment requirement for the extension. It's all good so far.
BUT, because I`m doing my business on outsourcing basis I don’t need to invest £50k in order to generate income. All what I need is a few computers and comfortable desk.

Thus, I'm running a genuine business, paying taxes, VAT and providing employment for the UK residents BUT I`m struggling with my investment requirement that I have to meet for the extension application.

Legally speaking, as a shareholder and a director I can make an allotment of shares of my ltd for £50k and buy them all as a shareholder. But, as far as I`m understand it will only be technically right and won`t demonstrate real investments.

Could you please share your experience and knowledge regarding investment options available that is REAL, or issues that may arise in the course of that investment? Is it fine to just pay all £50 to myself and my employees?

Much appreciated!

ishfaqsangra
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Re: Advice needed for investment for tier 1 entrepreneur vis

Post by ishfaqsangra » Tue Oct 14, 2014 11:56 am

@naveed nikka
For God's sake I have never ever suggetsed or commented like this
I think you might have mistaken me sir and please do not mention somebody 's suggestion I would love if you can quote if I have replied anywhere like this

I can only laugh

GLL
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Re: Advice needed for investment for tier 1 entrepreneur vis

Post by GLL » Fri Oct 17, 2014 4:26 pm

Expatinlaw wrote:Hi all

I would like to restart this discussion about investment issues within a Tier 1 (E) Visa framework.

I read a few general discussions about investments but there are no talks about specific options or issues that an applicant may be faced with when demonstrating/proving his investment.

To start with I am giving you my case:

I`m a Tier 1 (E) visa holder approaching my extension time next year.

In terms of my background, I`m a foreign qualified highly-skilled professional with an appropriate English Master degree. Currently, I`m running my ltd and doing pretty well so far generated £40k in my first trading year. I just about to obtain my English qualification licence that allow me to provide full scale service in the field of my business in England and expand the practice further. I have a respectful accounting firm to look after books. I hired a secretary (my wife) and now just about to hire a business development manager in order to fulfil the employment requirement for the extension. It's all good so far.
BUT, because I`m doing my business on outsourcing basis I don’t need to invest £50k in order to generate income. All what I need is a few computers and comfortable desk.

Thus, I'm running a genuine business, paying taxes, VAT and providing employment for the UK residents BUT I`m struggling with my investment requirement that I have to meet for the extension application.

Legally speaking, as a shareholder and a director I can make an allotment of shares of my ltd for £50k and buy them all as a shareholder. But, as far as I`m understand it will only be technically right and won`t demonstrate real investments.

Could you please share your experience and knowledge regarding investment options available that is REAL, or issues that may arise in the course of that investment? Is it fine to just pay all £50 to myself and my employees?

Much appreciated!

To answer your question, there is a need to distinguish two concepts we are talking about: first is how you invest your money. And the second one is how you spend the money you invested.
According to Tier 1 rules you can invest money by way of share capital or unsecured Director's loan. Whichever way you invested the money you need to spend them for the purpose of the business. You can see my comment above what "spend" excludes which should answer your question about paying salary to yourself. I suggest that you also make sure you are paying your wife salary in line with the market and not simply paying most of the money to her to get around the spending requirement.
So you do need to show that you are spending this money. I don't know what is the field of your business, but in any field there are expenses to be made eg. marketing, business development, etc, £50k for 3 years is actually not a lot especially considering that you need to create 2 jobs.

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