Historically, the Home Office were wary of allowing those who hold shares in a company to be sponsored or obtain a visa on that basis. Under the Skilled Worker's predecessor route, Tier 2 (General), there was a cap of 10% shareholding on sponsored workers. Even routes such as 'Representative of an Overseas Business' did not allow the sole representative to be a majority shareholder or otherwise have majority control in the business. The rules have been relaxed somewhat, with no cap in shareholding appearing in either the Skilled Worker or Expansion Worker routes (which has replaced Representative of an Overseas Business).
The term 'self-sponsorship' by itself is misleading. Whilst it is now possible for a worker to be sponsored by a company they own or have shares in, it still requires a level of oversight separate from that worker. At a minimum, you need at least one settled employee or 'office holder' – typically a director or company secretary - based in the UK, to be nominated in the key personnel roles of Authorising Officer, Level 1 User and Key Contact on a licence (for more information on applying for licence see here).
Any individual (or individuals if different people undertake each role) nominated as key personnel on a sponsor licence has significant responsibility for acquiring and maintaining the licence. The Home Office make it very clear that sponsorship is a privilege, not a right. This means that the Authorising Officer bears overall responsibility and has to observe all compliance duties that come with the sponsor licence. There is potential for a conflict if circumstances arise where a Level 1 User has to report on some negative aspect of a worker's conduct or sponsorship (e.g. they aren't doing the job sponsored for), and that worker is the owner or shareholder of the business. In the Home Office's eyes, compliance duties trump all else. Given that the owner or shareholder in a business will want it to succeed, it is unlikely such a scenario would occur. Nonetheless, it is something to bear in mind.
There is no minimum time period a UK incorporated business has to have been trading before it can apply for a sponsor licence; however, the longer the company has been established, the less scrutiny the Home Office is likely to apply when assessing whether it is a genuine business. As part of the licence application, there are certain documents that need to be provided, so a company's ability to apply for a licence is often dictated by the availability of such documents.
It is also worth bearing in mind that codes such as chief executives, senior officials and certain managers often have starting salaries ranging for £50,000 - £84,100 gross per annum. As part of the sponsorship scheme, the company has to guarantee to pay the minimum salary specified for the code or route and keep records of such. Evidence of its ability to do so – usually in the form of the corporate bank balance – is essential to show that the role is genuine.
Key takeaways
The 'self-sponsorship' route is not as straightforward as it sounds and will certainly require some involvement from a UK-based individual. The individual or individuals nominated on the licence also have to take on onerous responsibilities to obtain and maintain the licence. It is a role they must be active in on a day-to-day basis.
Companies looking to go down this path often fall into the definition of 'start-up' (trading for less than 18 months) and, while bringing extra scrutiny to an application, can also find it difficult to get hold of the necessary documents i.e. a corporate bank account with a bank registered by the Financial Conduct Authority and the Prudential Regulation Authority in the UK.