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Investment into another Business

Only for UK Tier 1 (Entrepreneur) points system

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axe
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Hong Kong

Investment into another Business

Post by axe » Mon Sep 16, 2019 6:52 pm

Hello all,

I am a T1E migrant who started my own company and registered as a director a few months ago in order to fulfill the T1E requirement. I spent some of the money which was invested in my company for the company setup. However, there is no business income so far. Recently, I have sought for another opportunity to invest into a well established company. May I seek your advice about the following questions:

1. If I invest into another company and register as a director of that company at this moment (more than six months after I had got the BRP), can this investment also be counted as part of the GBP200K investment fund for T1E?

2. Can I close my original company & fully engage in the new company, or I need to keep it even with no trading activities until the whole T1E journey has ended (i.e. after VISA extension & settlement)?

Thank you very much in advance!

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marcnath
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Re: Investment into another Business

Post by marcnath » Mon Sep 16, 2019 8:02 pm

axe wrote:
Mon Sep 16, 2019 6:52 pm
Hello all,

I am a T1E migrant who started my own company and registered as a director a few months ago in order to fulfill the T1E requirement. I spent some of the money which was invested in my company for the company setup. However, there is no business income so far. Recently, I have sought for another opportunity to invest into a well established company. May I seek your advice about the following questions:

1. If I invest into another company and register as a director of that company at this moment (more than six months after I had got the BRP), can this investment also be counted as part of the GBP200K investment fund for T1E?

2. Can I close my original company & fully engage in the new company, or I need to keep it even with no trading activities until the whole T1E journey has ended (i.e. after VISA extension & settlement)?

Thank you very much in advance!
1. Yes
2. You can do as you wish - no requirements for this in immigration rules
My comments are in no way meant to be advisory. I have no professional knowledge of immigration. These are based on my own experience, convictions and personal interpretation of publicly available information.

axe
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Posts: 4
Joined: Mon Sep 16, 2019 6:09 pm
Hong Kong

Re: Investment into another Business

Post by axe » Mon Sep 16, 2019 8:12 pm

Got it. Thanks marcnath!

axe
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Re: Investment into another Business

Post by axe » Sat Sep 28, 2019 4:41 pm

Hello all,

I have other questions about investing into an existing Business.

1. Is there any restriction on the use of my invested fund? For example, can the company use my invested money to buy customers (i.e. goodwill) from other business in order to grow the customer base?

2. The accounting documents of that company will contain both the original capital owned by that company before my investment and my new invested money. Is special treatment required for these accounting documents which will be submitted to HO for visa extension application?

Thanks again!

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CR001
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Re: Investment into another Business

Post by CR001 » Sat Sep 28, 2019 4:58 pm

1. Is there any restriction on the use of my invested fund? For example, can the company use my invested money to buy customers (i.e. goodwill) from other business in order to grow the customer base?
No, that would not count as investment.
Char (CR001 not Casa)
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Please DO NOT send me a PM for immigration advice. I reserve the right to ignore the PM and not respond.

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marcnath
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Re: Investment into another Business

Post by marcnath » Sun Sep 29, 2019 3:02 pm

axe wrote:
Sat Sep 28, 2019 4:41 pm
Hello all,

I have other questions about investing into an existing Business.

1. Is there any restriction on the use of my invested fund? For example, can the company use my invested money to buy customers (i.e. goodwill) from other business in order to grow the customer base?
I have a slightly different interpretation from CR001 because I believe that the answer to this depends on the exact nature of the transaction.

The guidance refers to "goodwill" with respect to purchase of another business. From your description, you are not buying the other business, you are only buying assets (customers) from the other business - I personally don't think that is prevented. I would consider this as a customer acquisition costs, which is typically a marketing cost.

Having said that, if the effect of buying the customers is almost the same as buying the business (for example, if that is the only thing that business had of value), then it can be considered to be the same buying the business and so disallowed.

You should have a discussion with a competent accountant and solicitor to make sure that such a purchase can be justified.
axe wrote:
Sat Sep 28, 2019 4:41 pm

2. The accounting documents of that company will contain both the original capital owned by that company before my investment and my new invested money. Is special treatment required for these accounting documents which will be submitted to HO for visa extension application?

Thanks again!
That question is confusing. The previous capital should have no impact. The accounts you submit should clearly show your investment as specified in the guidance.
My comments are in no way meant to be advisory. I have no professional knowledge of immigration. These are based on my own experience, convictions and personal interpretation of publicly available information.

axe
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Posts: 4
Joined: Mon Sep 16, 2019 6:09 pm
Hong Kong

Re: Investment into another Business

Post by axe » Sun Sep 29, 2019 4:09 pm

Thanks CR001 and marcnath! Your valuable responses are really appreciated.

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