Skip to main content

Entrepreneur visa applications – common reasons for refusal

11 October 2013

In this week’s article written by both Dr Alan Ma and Lawyer Daniel Cheung, we will look at entrepreneur visa applications and the common reasons for refusal. Dr Ma is on the panel of advisers to the Home Office (formerly UKBA) and assists them in formulating policies. Only last week, Dr Ma has been invited to a round table discussion by UKTI.  Only 5 lawyers in the entire UK were invited. Dr Ma is the only one representing the Chinese Tier 1 visa applications under the £1m investor and £200k entrepreneur categories. We discovered the success rate of entrepreneur visa applications is at 25% which means that for every 10 applications, 7 or 8 are refused. With more and more entrepreneur applications being applied for, particularly by PSW and student visa holders, and even by parents because the settlement rules are too difficult for them now, it is important to be aware of the common pitfalls in this type of application.

There is also no right of appeal for applications made outside the UK. Instead, they have an ‘Administrative Review’ procedure which means that applicants can ask the UKBA to review their decision. However, there is no independent judge as there would be with a proper appeal and so the chances of succeeding may be much lower. It is therefore important to try and succeed with the first application otherwise the UKBA can always use the first refusal as its reason to refuse any subsequent applications.

Poor business plan

A business plan is now required to be attached to the application. This helps the UKBA decided whether or not the applicant is a ‘genuine entrepreneur’. Some applicants have had their visa refused because the UKBA discovered the business plan was downloaded from Google and there was not much change to the contents. There is various software now available which can detect whether a document has been copied from another website. Some software even tells you the percentage of words that have been copied. There is no problem in having a template, but the contents should come from the applicant’s own research.

To have a good business plan, the ‘SWOT’ analysis should be done: strengths, weaknesses, opportunities and threats. We have seen individuals been refused their visas because they were planning to open a Chinese medicine shop in a particular street. But the UKBA said if they had really conducted research, they would have known that around that street, there are already other Chinese medicine shops so no sensible entrepreneur would open there as the threat is too big.

In our experience, the business plan should be treated like a student’s dissertation. A lot of hours need to be spent drafting this. It is also good to have a budget to show the applicant has researched the type of costs and capital required to start his business.

Bank’s letter

If the monies are in China, the bank needs to confirm that the money can be transferred into the UK. The UKBA have refused visas because the Chinese bank letter does not include this sentence. This is due to the Chinese legal limits of transferring monies out of China – US$50,000 per annum. The banks in China usually refuse to add this statement in their letter and even if they do, the UKBA will be suspicious as they know of this limit to transfer funds from China. So the application will be much easier if the funds are already in a UK bank.

Source of monies

The UKBA have the power to interview the applicant. A common question that they ask is the source of the £200,000. Many applicants are unable to provide a logical answer and so their visa is refused on the basis the UKBA have doubts they are a genuine entrepreneur.

If the monies were from relatives then they can be classified as a gift. Documents known as ‘deed of gifts’ should be signed and executed. A lawyer can then certify that the deed of gifts are valid. This way, it can show the UKBA that the source of the £200,000 is legal.

Poor immigration history

The UKBA may call the applicant and question them on their immigration history. One applicant obtained full points (95 points) in her entrepreneurship visa application. However, she was still refused her visa because the UKBA found she had a poor immigration history. When she submitted her visa application in China, the British Embassy called her and asked about her previous undergraduate studies in the UK. She responded that she quit her studies because of an illness and returned to China for treatment. A few days later, the UKBA called her again and asked her what she told the immigration officer when entered the UK after going back to China. She responded that she was coming back to the UK to complete her studies. The UKBA checked with the university and they said the applicant never returned to her studies. The UKBA said the applicant lied to the immigration officer at that time plus she was in the UK on a student visa but not actually studying. Therefore, she was in breach of her visa conditions and the UKBA felt this applicant was not a genuine entrepreneur.

Occupational level too low (£50,000 entrepreneur visa)

For the £50,000 entrepreneur visa for PSW holders, then the title they give themselves must be at  a minimum of NQF level 4 as stated in the Codes of Practice. With the £50,000 visa, there are more documents to prepare, such as the advertisement and the contract. In both the advertisement and the contract, you are required to put your name and the business activity. Your job title can be put on. However, applicants have had their visa refused because the job title stated on the advert is not the same as stated in the contract. For example, in the advert, the applicant put his job position down as “Marketing Consultant” which is at NQF level 4, which is fine. However, in one of his contracts with a client he has put himself down as a “Sales Agent” which is at NQF level 3, which is too low. Due to this discrepancy, the UKBA had doubts whether the applicant satisfied the occupational level and therefore refused the visa.


For applications made inside the UK, the applicant himself must have held £900 everyday for 3 months. If the applicant is outside the UK, then this sum is £3,100. It must be in the applicant’s own account rather than someone else’s. This rule may seem very strange particularly if the applicant has £200,000 (or £50,000) to spend but the Judge has said “rules are rules” and even 1 penny less can ruin the application. One good idea is to put this maintenance sum into a savings account and to never use that account until the application is granted. 


In order to succeed in the entrepreneur visa application, it is vital that a good business plan is drafted which highlights the strengths, weaknesses, opportunities and threats of the proposed business. Proper research will need to be done as the UKBA does thoroughly check the content of the business plan. The applicant should be prepared to answer further questions the UKBA may ask, such as the source of their monies as well as questions relating to their past immigration history.

The national average success rate for the £200k entrepreneur is low in the region of 25%.  Although our success rate is extremely high, this is all down to our approach and detailed know-how.  It is important to use an experienced and proper solicitor who are properly registered with the Solicitors Regulations Authority.