A Statement of changes in Immigration Rules, detailing changes due to come into force yesterday, was laid before parliament on 16 March.

The statement announced changes to the Tier 1 category of the points-based system (PBS), as expected, and in particular to the Tier 1 (investor) and (entrepreneur) categories, but with more changes than anticipated.

A definitive Tier 1 (exceptional talent) category has been established.

Therefore, the Tier 1 category seems to have been redesigned in accordance with recommendations published by the Migration Advisory Committee in its report of 18 November 2010: the Tier 1 (investor) and (entrepreneur) categories have been changed with the aim of attracting direct foreign investment as well as creating jobs, and the Tier 1 (exceptional talent) category will seek to attract the brightest and best.

On 22 March, changes to the Tier 4 category of the PBS were announced by home secretary Theresa May.

Tier 4, which deals with non-EEA student migrants, will be redesigned by April 2012 with the stated aim of serving the brightest and best students. The home secretary also promised a new entrepreneur route aimed at students, which would grant those with business ideas and the potential to create wealth an opportunity to remain in the UK after graduation.

These changes seem to be consistent with the government’s aim of supporting a private sector-led economic recovery, while reducing net migration from hundreds of thousands to tens of thousands.

However, while they do send the message that the UK is open and ready for business, the government must be careful not to favour only those willing to invest large sums in the country or those who are ready to develop businesses.

Tier 1 (investor)

As of 6 April, migrants who apply under the Tier 1 (investor) category of the PBS will enjoy increased flexibility in their status and require less time to be able to settle in the UK.

Initial leave will be granted for three years and four months.

After investing £5m in the UK, an investor may settle in the country after three years, and following an investment of £10m, after two years. These are both significantly shorter periods of time than the current minimum of five years required for settlement.

In addition, investors will be permitted to be absent from the UK for up to 180 days in any 12-month period without jeopardising their right to settle. This is double the current limit of 90 days.

Tier 1 (entrepreneur)

Tier 1 (entrepreneur) migrants will also be granted an initial leave of three years and four months, with a potential extension of two years and settlement after five years.

Entrepreneurs will be able to accelerate settlement after three years in the UK, however, if they generate a turnover of £5m or create 10 jobs over a three-year period.

Like investors, entrepreneurs will be permitted to be absent from the UK for up to 180 days in any 12-month period.

Most importantly, while the standard investment threshold will remain at £200,000, businesses that the UK Border Agency considers ‘high-potential’ will be allowed to enter the country with £50,000, as long as the sum is provided by: registered venture capitalists regulated by the Financial Services Authority; registered UK entrepreneurial seed funding competitions; UK government departments; or a combination of the three.

Entrepreneurs will be able to enter the UK with business partners if they have access to joint funds.

Prospective entrepreneurs will be able to enter the UK with a new type of visitor visa designed especially for those looking to set up businesses in the UK.

Unlike those who enter the country with a business visitor visa, prospective entrepreneur visa holders will be permitted to apply for a Tier 1 (entrepreneur) entry clearance or visa while they are in the UK.

Tier 1 (exceptional talent)

A new Tier 1 (exceptional talent) category has been established for those who have been internationally recognised in scientific and cultural fields, and for those who show exceptional promise.

Migrants will not need to be sponsored by an employer, but will need to be endorsed by a designated competent body (to be announced in the near future), and it will be for each of these bodies to select those who will qualify for endorsement.

During the first year of this category, there will be a limit of 1,000 grants of entry clearance (700 in science and 300 in the arts).

The limits will be reviewed by April 2012. Migrants will be granted entry clearance of three years and four months, with the option of extending for two years. They will be able to settle after five years of residence in the UK.

Tier 4

Changes to the Tier 4 category, designed for student migrants, will be implemented from April 2012.

The category will be changed to cater for and ‘protect’ only the best and brightest students, in the words of the home secretary.

In her statement of 22 March, May said her goal is to make the student category a route through which migrants would come to the UK ‘for a limited period’, ‘to study, not work’, and to ‘make a positive contribution’ to the UK.

To realise this goal, more responsibilities will be placed on both academic institutions and students.

From April 2012, institutions must be classed as ‘highly trusted’ sponsors and be accredited by statutory education inspection bodies by the end of that year before they can sponsor students.

Students will lose their right to work unless they are at universities and publicly funded further education colleges, and they will no longer be able to bring dependants, unless they are postgraduate students at universities or government-sponsored students (currently all students on longer courses are permitted to bring dependants).

The time that a migrant can spend in the UK on a student visa will also be reduced for some. While the limit will remain at three years for lower-level courses, it will be reduced to five years at higher levels (at present, a limit for study at or above degree level does not exist).

Students will also have to demonstrate a proficiency in English at a higher level: at the B2 (upper intermediate) level instead of at the B1 (lower intermediate) level.

The Tier 1 (post-study work) category will close in April 2012. This currently allows students to seek employment in the UK for two years after the end of their courses.

Students may find alternative routes to stay in the UK after graduation – if they receive an offer of employment (and apply under the Tier 2 category), or if they qualify as ‘innovative student entrepreneurs’; the home secretary plans to create a new entrepreneur route for students with business ideas to create wealth in the UK.

Conclusion

Through changes to the Tier 1 (investor) and (entrepreneur) and Tier 4 categories, and plans to establish Tier 1 (exceptional talent), a prospective entrepreneur visitor visa, and a new entrepreneur route for students, the UK seems to be sending a clear message that the country is open and ready for business – at least to those who qualify under the changed immigration rules.

However, if the coalition’s aim of a fostering a private sector-led economic recovery while reducing net migration is to be fulfilled, ministers must ensure that the immigration rules do not merely favour those with large sums to invest; those who have been internationally recognised for their endeavours; or even those who show promise in these areas.

In particular, the coalition must not penalise legitimate migrants (such as recent graduates) who wish to enter the UK to contribute to the country, solely because they are unable to demonstrate significant wealth or the clear potential to create wealth at the time of their application.

Universities and employers have already expressed concern that many talented students choose to study, and work in the UK following their study (rather than in the US, Australia, or Canada), because of the country’s unique immigration system.

Britain must not be blinded by the simple goal of reducing net migration, but should consider who will truly make a contribution to economic recovery, and provide ways for them to enter the country.

Suehyan Cho, a legal assistant at Laura Devine Solicitors, London, contributed to this article