Buying an existing business

[FSOL]

Good day to all.
Please excuse me if such a question has already been asked, but I tried to search carefully.
To apply for a visa entrepreneur I plan to buy an operating business in London (Restaurant or fast food in) Leasehold for >200,000 pounds. Reading the requirements on gov.uk I saw the following information:
To apply I have to taken over or invested in an existing business (with this everything is clear), but this article-
‘Invested’ or ‘spent’ excludes spending on:
1) your own remuneration,
2) buying the business from a previous owner, where the money ultimately goes to that previous owner (irrespective of whether it is received or held directly or indirectly by that previous owner) rather than into the business you have bought. This applies regardless of whether the money is channelled through the business en route to the previous owner. For example, by means of you or your business purchasing ‘goodwill’ or other assets which were previously part of the business you have bought.
Maybe I do not understand something, but after all, buying a business is exactly =buying the business from a previous owner, where the money ultimately goes to that previous owner.
Explain, please, it turns out that buying a business from the previous owner is not suitable for an entrepreneur's visa, or I misunderstood and I can consider the purchase of a business as an investment?
Thank you.

[marcnath]

Good day to all.
Please excuse me if such a question has already been asked, but I tried to search carefully.
To apply for a visa entrepreneur I plan to buy an operating business in London (Restaurant or fast food in) Leasehold for >200,000 pounds. Reading the requirements on gov.uk I saw the following information:
To apply I have to taken over or invested in an existing business (with this everything is clear), but this article-
‘Invested’ or ‘spent’ excludes spending on:
1) your own remuneration,
2) buying the business from a previous owner, where the money ultimately goes to that previous owner (irrespective of whether it is received or held directly or indirectly by that previous owner) rather than into the business you have bought. This applies regardless of whether the money is channelled through the business en route to the previous owner. For example, by means of you or your business purchasing ‘goodwill’ or other assets which were previously part of the business you have bought.
Maybe I do not understand something, but after all, buying a business is exactly =buying the business from a previous owner, where the money ultimately goes to that previous owner.
Explain, please, it turns out that buying a business from the previous owner is not suitable for an entrepreneur's visa, or I misunderstood and I can consider the purchase of a business as an investment?
Thank you.

Through the entrepreneur visa, the government expects that investment and jobs will add to the economy by creating new business activity. So, paying the owner of a business does not meet that requirement.
The intent is that you join or take over a business and you do that by investing money into an existing business.

[FSOL]

Thank you for answer.
Now it will greatly complicate starting a business for me, I wanted to buy a profitable cafe and start developing slowly. I'm a good manager, I own few cafes and work with several big corporate customers. The income suits me completely, but doing business in Russia creates a feeling that you are sucked into the black hole faster every day. Therefore, I am ready to change my company with 50 full-time employees for a small cafe with a stable income. But we will not stop, we will look for options
Then what options can there be?
- Search for a lease property that simply for rent and is not sold as a food business, then make repairs and finishing + purchase equipment (200,000 pounds)
- Buy an inexpensive business, put on an account 200,000 and in 3 years try to find where to invest it
I'm confused , help me please, maybe there are other options, maybe something possible to do when buying an existing business?

[marcnath]

maybe something possible to do when buying an existing business?

The rules have been set so there are no workarounds.

Of course nothing prevents you from buying a business for say, 50K, and then investing 200K to improve the business.

- Search for a lease property that simply for rent and is not sold as a food business, then make repairs and finishing + purchase equipment (200,000 pounds)

That works. Your rent can also be from the 200K

Buy an inexpensive business, put on an account 200,000 and in 3 years try to find where to invest it

If that is what your business plan says, it is highly unlikely your visa will be granted

[FSOL]

Thank you marcnath

That works. Your rent can also be from the 200K

This means that if I buy a existing food business, then the size of the leasehold rent can be add in the total investment amount of 200,000?
For what period can I add rental costs, for three years?

[marcnath]

Thank you marcnath

That works. Your rent can also be from the 200K

This means that if I buy a existing food business, then the size of the leasehold rent can be add in the total investment amount of 200,000?
For what period can I add rental costs, for three years?

I am not sure I understand your question.

To be clear, the T1E Visa requires you to invest 200K. You can then use that money any way you want to further the business, except for a few restrictions:
- Paying yourself
- Paying an existing owner
- Investing into property for development purposes
- Residential property.

That may not be exhaustive but should be close.
As long as you are spending for anything else legally needed for the business (includes rent) then it should be ok.

[FSOL]

And what is the maximum time allowed to spend 200,000 - is it 3 years, I understand correctly?

[zimba]

And what is the maximum time allowed to spend 200,000 - is it 3 years, I understand correctly?

There is no requirement to spend the money fully. Have you even read the guide ???

[FSOL]

Thank you zimba88,
I've read the guide two times already, but obviously not everything is clear for me yet (My English is not yet strong I also record the most important things for me. I must once again read and read in order to understand everything to the end
So I can buy a food business, put in an account> 200,000 - not all of them spend in 5 years (also have a business plan for development and 2 fulltime workers etc) And theoretically this should be enough for Apply, Extend and Apply for leave to remain?

[FSOL]

Thanks a million for your clear guidance. Really appreciate.
Also if possible let me know if bills and staff wages also counted as investment. This is only until my business starts making enough profit. Once I can take out wages etc from profits I will stop claiming these as investment. Please Thanks

Investment is money INTO the business. Bills and staff wages are money OUT of the business.
So, no, bills and wages are not counted as investment- only money transferred into the business (ideally into the business bank account) is investment

Hello. Please dear admins dont angry if im wrong) But it seems to me that one of the administrators not so long ago answered that the rent and wages can be considered as an investment with 200k route. Сan you please clarify this? Thank you.

[marcnath]

Thanks a million for your clear guidance. Really appreciate.
Also if possible let me know if bills and staff wages also counted as investment. This is only until my business starts making enough profit. Once I can take out wages etc from profits I will stop claiming these as investment. Please Thanks

Investment is money INTO the business. Bills and staff wages are money OUT of the business.
So, no, bills and wages are not counted as investment- only money transferred into the business (ideally into the business bank account) is investment

Hello. Please dear admins dont angry if im wrong) But it seems to me that one of the administrators not so long ago answered that the rent and wages can be considered as an investment with 200k route. Сan you please clarify this? Thank you.

Sorry if the Allcaps gave a wrong impression - I was just trying to emphasise a point.
It is very difficult to comment on something that I have not seen (easier if you had posted a link to that answer) but I suspect it is something you misunderstood.
Investment is only money going INTO the business. But, of course, once the money is in the business, you can use it for all kinds of business expenses such as rent, wages, stationery, taxes, etc.
There are only certain expenses that would be discounted from the invested amount - things like your own wages, residential property, payments to previous owners of a business and property development

[CR001]

Thanks a million for your clear guidance. Really appreciate.
Also if possible let me know if bills and staff wages also counted as investment. This is only until my business starts making enough profit. Once I can take out wages etc from profits I will stop claiming these as investment. Please Thanks

Investment is money INTO the business. Bills and staff wages are money OUT of the business.
So, no, bills and wages are not counted as investment- only money transferred into the business (ideally into the business bank account) is investment

Hello. Please dear admins dont angry if im wrong) But it seems to me that one of the administrators not so long ago answered that the rent and wages can be considered as an investment with 200k route. Сan you please clarify this? Thank you.

Sorry if the Allcaps gave a wrong impression - I was just trying to emphasise a point.
It is very difficult to comment on something that I have not seen (easier if you had posted a link to that answer) but I suspect it is something you misunderstood.
Investment is only money going INTO the business. But, of course, once the money is in the business, you can use it for all kinds of business expenses such as rent, wages, stationery, taxes, etc.
There are only certain expenses that would be discounted from the invested amount - things like your own wages, residential property, payments to previous owners of a business and property development

I believe the user 'FSOL' is likely referring to the advice received in their own topic, link below.

uk-tier-1-entrepreneur-visas/buying-an- ... l#p1515297

[CR001]

Hello. Please dear admins dont angry if im wrong) But it seems to me that one of the administrators not so long ago answered that the rent and wages can be considered as an investment with 200k route. Сan you please clarify this? Thank you.

Kindly continue in your own topic with your questions.
uk-tier-1-entrepreneur-visas/buying-an- ... l#p1515297

[FSOL]

Thank you for the quick response!
But if, for example, the rent is 100k per year, can I submit 300k for three years as an investment?

[FSOL]

I apologize, I just did not understand about the lease payments, can several lease payments be counted as an investment.
I put the question in my topic.
Thank you.

[marcnath]

Thank you for the quick response!
But if, for example, the rent is 100k per year, can I submit 300k for three years as an investment?

Depends on where the money for the 100K came from ?
If you transferred money into the business account to cover that, yes it can be.
But, if you used your sales income to pay the rent, NO, it is not investment.
Which is why I have repeatedly said (in your previous thread and here again), investment is money you put into the business.
It would be easy enough to ask your accountant what is the total investment in your business, if you can't figure that out yourself.

[FSOL]

Now I understand.
Thank you.