I Am A Majority Shareholder, Can I Reduce My Shareholding and Then Apply for a Sole Representative Visa?
Regardless of the visa type, you plan to apply for, it is always essential to check the fine print of the Home Office’s eligibility criteria before doing so. We often see individuals and businesses making applications for immigration clearance when they are not ready, risking a delay or refusal in acquiring the permission they require. In this article, we will take a look a the requirements for the UK Representative of an Overseas Business visa (also known as the Sole Representative visa), and in particular, whether it is possible to reduce shareholding before making an application.
Can I Reduce My Shareholding Before Applying For A Sole Representative Visa In The UK?
One of the main eligibility rules for the Representative of an Overseas Business visa states that applicants must “hold a senior position within the business (but do not own or control the majority of it) and have full authority to make decisions on its behalf)”. The guidance used by Home Office case officers for this visa provides more details on this stipulation. Case officers are required to check that where an applicant owns at least a part stake in the company they wish to represent in the UK, this does not equate to more than:
- 50% of the shares, or;
- 50% of the voting rights
In addition, the person applying for the Sole Representative visa cannot be the self-employed owner or sole-proprietor of the overseas business in question. They also cannot be in a partnership agreement in which they own more than 50% of the business.
The Home Office is also aware of alternative commercial arrangements, which may mean the applicant is, in effect, the main owner or controller even if they don’t necessarily own the majority of shares. The guidance states, “Sole Representatives must also not be party to any other arrangement in relation to the overseas business whereby they are effectively the majority owner, controller, or the main beneficiary of that business, even though they may not actually own more than 50% of the business. For example, an applicant would be ineligible if a silent partner owns the majority of the overseas business but has agreed to give majority control and profits to the applicant”.
Does This Mean That As Long As My Shareholding Is Less Than 50%, The Home Office Will Grant My Application For A Sole Representative Visa?
The Home Office are likely to delve more deeply into the shareholding or ownership arrangements where an applicant holds a ‘substantial’ but not necessarily 50% or more share of the overseas business. The reason they will look more closely is that while they know it is commonplace for very senior staff to own shares or have part ownership in a business, where this is a large stake, they will want to be reassured that this does not exceed the allowed amount. For this reason, the closer to 50% you own, the more likely it is that further details and/or an interview will be requested. The guidance states the following on this matter, “Where this is only a small stake in that business, there will be no reason to doubt the applicant’s eligibility with respect to ownership. If, however, the applicant has a substantial stake in the overseas business, but it is not more than 50%, you may need to consider requesting additional information or undertaking an interview”.
When looking at the shareholding or ownership arrangements, the Home Office will seek to verify that the applicant is a proper employee, and it is not their own business. For this reason, you may be requested to provide a copy of your employment contract, your job description, and the employer’s business plans. The Home Office will not grant a Sole Representative visa to someone who is technically self-employed. If you are a director of the company, you will be eligible as long as you have a genuine contract of employment with the overseas business. If you are a founder of the business, you will need to show that you are now genuinely just an employee with no more than a minority shareholding.
Can I Reduce My Ownership Or Shareholding To Apply For A Representative Of An Overseas Business Visa?
Yes, the Home Office will be satisfied if you have divested part of your ownership or shareholding in the overseas business and now have less than 50%. As the guidance makes clear, “It is possible for a founder of a business to also be an employee in some circumstances (for example, they may have founded a business and then subsequently sold their shares to an investor but continued to hold a role in the business). Any member of staff who has previously had a majority shareholding or has controlled the overseas business can apply for a visa if they have now reduced their interest below the set threshold. The challenge for the applicant, however, is proving this is the case. To do so, you may need to provide a copy of the previous year’s share register, a document showing the sale of the shares, and the current share register showing your stake at less than 50%. If you have reduced your interest in your overseas employer, it is advisable to speak to an immigration Solicitor who will be able to confirm that you are a) eligible for a Sole Representative visa and b) you have the necessary paperwork to prove this. Where necessary, they can draft a detailed covering letter explaining the context of your case to remove any doubt in the mind of the Home Office case officer that you are not a majority owner or shareholder in the business.
When it comes to applying for a Sole Representative visa, it pays to understand the fine details of the eligibility requirements. By front-loading your application with all of the evidence the Home Office may request to show you have reduced your interest, you will have the best chance of securing a quick and positive decision without any delays or the possibility of refusal.