Urgent- Visa Renewal - 200K Investment criteria

Hi,

I have a question which the T1 Entrepreneur guidance does not seem to answer.

I have been on the T1 Ent. visa for 2.5 years now, and have created two jobs and satisfied the criteria for Job creation.

But for the investment of 200k GBP, It is not clear what is considered as investment(for visa purposes).

There can be 2 cases-

1) Company (which I own solely) invests 200K in the UK by means of spending money from its business account by means of(investment in research, employee salaries, business development costs, dividends, other company expenses etc.)

But this money being spent by company from company account has been earned by company in the UK & Abroad by providing its services.



2) I (the visa holder) actually inject all the 200K into the company by showing a transfer of 200K from my personal account (which I showed during initial application) into company account, and then company spends this money/ or does not spend this money.


I do not understand which of this criteria is actually meant by investment.

Is it company spending(case 1) or is it visa holder txfring money from personal account to his own company's account (case 2), or is it both ? visa holder txfrs money to company account and then company spends that.. ?

Please help as I need to plan the next year before applying for renewal.

I am sure many people will face this question in the near future as their visas come up for renewal.

Thanks,

You, or anyone else, needs to inject 200K into the business and show this in the accounts. The company accounts must show this. You can't, as you are suggesting, run a business makes 200K in operating porfit and call that the investment. However, your business can make 200K in profit, you can then pay yourself this money by taking it out of the business as dividends, and then put that same money back into the business as the new necessary 200K investment.

Hi Lucapooka

Thanks. this is great. I know this can be done. I was just not sure if ti was required. Thank you for your reply.

Just another 2 clarifications.

1) So basically both legs of the transaction need to happen.

Step1 - Visa holder needs to inject money from Personal bank account Into Company bank account.
Step2- Company needs to spend this complete amount ?

2) Will dividend be considered investments ? My accountant says Yes. But I want to clarify with you as you know better.

Thanks.

The 200K injection does not have to be your money and nor does it have to be from your account. I wonder why you think this has to be so? Did you not read the guidance with regard to third party investment? The company does not need to then disburse this money; it can be retained in the company.

Hi Lucapooka, thanks,

Sure, I understand that it can be txfrd by anybody from bank account. Just a txfr needs to be shown.

But my question was more inclined towards what happens later.

i.e. the investment by the company itself.

i.e. Company spending that 200k(after it has been injected into its business account).

Does the company need to spend all that 200k and show expenses ?
Will the dividend, that the company pays out be considered an investment by the company ?

Sorry Lucapooka- I missed something,

Just to clarify, I ask this question of company spending the money.

Because it is mentioned in the guidance somewhere that an investment in residential property cannot be considered a investment.

So if the question of company disbursing the money does not arise, why would the UKBA mention that ?

That is what is confusing me most. Any ideas ?

Thanks.

Hi Lucapooka, any replies from you will be great. you seem to know a lot, please help me out.

Thanks.

The guidance is very clear on the matter of residential property (and you can hit ctrl + F to search for all instances of this in the policy guidance PDF). If you want my personal opinion on your situation, you would need to state where residential property fits into your business model.

Hi Lucapooka, thanks.

No I understood that.

But residential property is not my question.

My question is-
Does the company need to invest all the money(200k) that has been injected into it by investors ?

You said that it does not have to disburse this money.

But the guidance is not clear about it..( it says that company cannot buy residential property for e.g.), which means that the UKBA is expecting the company to spend this 200k ?

What is all this nonsense about investment? A business holds capital and chooses to disburse or retain that capital as per its operational needs. Just because you are obliged to inject 200K into the coffers of a business enterprise (to be granted a visa) does not mean you have to then disburse that capital (spend that money in layman's terms). That would depend on the needs of the business; how it wished to use its capital to further its needs.

You don't understand (that much is clear) and you should seek assistance on this. It's a business venture and to stumble around in the dark is not appropriate to that activity. The small cost of professional help can be attributed to the cost of doing business in the modern world. Otherwise you could end up making some very serious and expensive mistakes.

I have similar question.
My friend got visa with third party investment. Now he has bought the business for 60k. to satisfy visa renewal what he has to do with remaining money? should keep in his business account?