A Guide To The Immigration Implications Of Acquiring A UK Business

Acquiring or merging with a UK business can have significant immigration implications, particularly where overseas owners or sponsored workers are involved.

The steps you'll need to take will depend on the structure of the transaction, whether staff are relocating to the UK and whether the business already employs workers sponsored under the UK's immigration system.

When do immigration issues arise?

The immigration implications of a merger or acquisition will usually fall into one of three scenarios:

1. An individual acquires a UK business and wants to relocate to the UK to manage it.

2. An overseas company acquires or merges with a UK business and wishes to transfer employees to the UK.

3. A business acquires a UK company that already employs sponsored workers, creating sponsor licence and compliance obligations.

Scenario 1: An individual acquires a UK business

If you're acquiring a UK business and intend to relocate to manage it, there are several immigration routes that may be available.

Innovator Founder visa

The Innovator Founder visa is designed for individuals with an innovative, viable and scalable business idea supported by an approved endorsing body. This visa is granted for three years and can lead to settlement if the relevant requirements are met. Applicants must also demonstrate that they have held at least £1,270 in savings for 28 consecutive days before applying.

Although purchasing an existing business may qualify in principle, obtaining endorsement can be more challenging, as many approved endorsing bodies focus on new business ventures rather than business acquisitions.

Skilled Worker visa

Another option may be the Skilled Worker visa, provided there's a genuine job offer from a UK employer holding a Home Office sponsor licence and the role meets the relevant skill and salary requirements. Although this route places additional obligations on the employer, it may be a more practical option in some circumstances.

Scenario 2: An overseas company relocates employees to the UK

Where an overseas company acquires or merges with a UK business, it may need to transfer senior employees or specialists to the UK.

The Senior or Specialist Worker visa can provide an effective route for multinational organisations to relocate key personnel on a temporary basis.

To use this route:

• the UK entity must hold the appropriate sponsor licence

• each employee must receive a Certificate of Sponsorship

• employees must meet the relevant eligibility, salary and qualifying employment requirements.

Scenario 3: A UK business employs sponsored workers

Even if no overseas staff are being transferred, immigration issues can still arise where the acquired business already employs sponsored workers.

Sponsor licences cannot be transferred between legal entities. As a result, the acquiring business may need to:

• obtain its own sponsor licence

• assume responsibility for sponsored workers

• comply with Home Office reporting requirements following any change in ownership or control.

What happens if TUPE applies?

Whether the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) apply will often determine the immigration steps that need to be taken.

Where TUPE regulations apply, sponsored workers can often continue working for the new employer without making a fresh immigration application, provided the appropriate sponsorship and reporting requirements are met.

Where TUPE does not apply, the acquiring business may need to sponsor affected workers under its own licence and issue new Certificates of Sponsorship.

The exact requirements will depend on the structure of the transaction, the immigration status of the workers involved and the roles they will undertake after completion.

Why immigration should form part of your due diligence

Immigration considerations should be addressed early in any merger or acquisition. By reviewing sponsor licence obligations, existing sponsored workers and any planned employee relocations during the due diligence process, you can help identify potential issues before completion and reduce the risk of compliance breaches after the transaction.