How to Start Your Own Business in the UK Through the Self-Sponsorship Route?

If your Post Study Work (PSW) visa is ending in more than three months and you have a budget of £15,000 to £20,000, the self-sponsorship route could be your best option to stay in the UK while starting your own business. This pathway allows you to establish and run a business while securing a Skilled Worker visa for yourself. In this blog, we will break down the step-by-step process of how to successfully navigate the self-sponsorship route and secure your future in the UK.

Step 1: Register a Limited Company

The first step in the self-sponsorship process is to register a limited company in the UK. This is a simple process that costs approximately £50. You can do this through the UK Government’s Companies House website.

When registering your company, you will need to provide:

·       A unique company name (Ensure it is not already in use)

·       The business address (which can be your home address initially)

·       At least one director (who will be you)

·       A shareholder structure

Once registered, you will receive a Certificate of Incorporation, which officially confirms the existence of your company.

Step 2: Open a Business Bank Account and Fund It

After successfully registering your company, the next crucial step is to open a business bank account in the UK. Different banks may have different requirements, but typically, you will need to present:

·       Certificate of Incorporation

·       Proof of your identity (passport/visa)

·       Proof of business address

Deposit your startup capital (£15,000 to £20,000) into this account. This shows the Home Office that your business is financially viable. You should begin making regular sales and expense transactions for at least 2-3 months to demonstrate that your business is active and operational.

Step 3: Obtain a Lease Agreement

A physical business location is essential to prove the legitimacy of your business. Since your company is newly established, renting a full-fledged office may be expensive. Instead, you can opt for a co-working space lease, which can cost approximately £150 per month.

Ensure that the lease agreement clearly states:

·       Your company name

·       The physical address of the business

·       Duration of the lease agreement

This document will be critical when applying for a sponsorship license.

Step 4: Get Public and Employer Liability Insurance

The next step is to protect your business by obtaining Public and Employer Liability Insurance. This insurance is mandatory for businesses that plan to hire staff, including yourself. The cost of this insurance is around £50 per month and ensures that your company is compliant with legal standards.

Step 5: Prepare a Comprehensive Business Plan

A well-structured business plan is a crucial part of your sponsorship license application. The Home Office needs to see that your business is sustainable and will contribute positively to the UK economy. Your business plan should outline:

1.       Business Model: What does your company do, and how does it generate revenue?

2.       Market Analysis: Industry research and your target audience

3.       Financial Projections: Expected revenue, expenses, and profit forecasts

4.       Employment Needs: Why your company requires migrant workers

This professional business plan can cost around £1500 to £2000 if outsourced to a specialist. Ensure the plan is clear and aligns with the Home Office guidelines.

Step 6: Appoint an Authorising Officer

Every company applying for a sponsorship license must appoint an Authorising Officer. This person is responsible for managing the Sponsorship Management System (SMS) and ensuring compliance with UK immigration laws.

The Authorising Officer must:

·       Be a British citizen or hold Indefinite Leave to Remain (ILR)

·       Be a senior employee or director within your company

If you do not have anyone suitable, you can hire a third-party agent to act as your Authorising Officer.

Step 7: Apply for the Sponsorship License

Once your business is operational and you have all the necessary documents, you are ready to apply for a Skilled Worker Sponsorship License. The application fee for small businesses is £536, and the processing time usually takes 8 to 10 weeks.

If you want to expedite the process, you can pay an additional £500 for priority processing, which takes approximately 2 weeks.

During the application, you must provide the following documents:

·       Certificate of Incorporation

·       Business bank account statements

·       Lease agreement

·       Public and Employer Liability Insurance certificate

·       Comprehensive business plan

·       Authorising Officer details

Step 8: Access the Sponsorship Management System (SMS)

Once your application is approved, you will receive access to the Sponsorship Management System (SMS). This online portal allows you to manage your sponsorship duties and issue Certificates of Sponsorship (CoS).

For your self-sponsorship route, you will need to issue yourself an undefined CoS. This allows you to apply for a Skilled Worker visa under your own company.

Step 9: Apply for Your Skilled Worker Visa

After obtaining the undefined CoS, you can proceed to apply for the Skilled Worker visa. You will need to complete the online visa application form and pay the relevant visa fees.

The Home Office will require:

·       Your undefined CoS reference number

·       Proof of English language proficiency

·       Evidence of maintenance funds if required

The visa processing time typically takes 3 to 8 weeks, but priority options are available for faster processing.

Step 10: Ensure Compliance for the Next 5 Years

Once you obtain your Skilled Worker visa, it is crucial to maintain compliance with UK immigration laws. This includes:

·       Keeping accurate records of employees

·       Reporting changes in your business operations

·       Renewing your sponsorship license if needed

By following these compliance guidelines, you will be eligible to apply for Indefinite Leave to Remain (ILR) after 5 years.

Final Thoughts

The self-sponsorship route is a powerful and practical way to transition from a PSW visa to a long-term legal status in the UK. With an initial investment of £15,000 to £20,000, a clear business strategy, and proper compliance, you can secure a Skilled Worker visa while building a successful business.

If you want to learn more and get personalized guidance on starting your self-sponsorship journey, contact us for a free personalized consultation