The aim of this note is to provide an overview of some of the rules that came into effect from 1 January 2021 . The new rules place significant restrictions on the ability of EU directors of UK companies to perform directorial duties in the UK. In reading this note it is important to understand that we are accountants – not lawyers. Immigration law is a difficult, complex and specialist area. So, what follows is our understanding of the situation. It should certainly not be acted on without taking specialist advice.
Lay-out of note
I have written this note in response to questions that I have been recently asked.
Q1 – Do directors of UK companies need to be UK nationals or UK residents?
There is no legal or other requirement for directors of UK companies to live or be based in the UK or to be UK nationals. This also applies to other company officers, such as company secretaries.
Q2 – Do the normal immigration rules apply to directors?
Directors are subject to the same immigration rules as every-one else. You can read about some of the immigration rules pertaining to employees in my note Settled and Pre-settled Status and Points Based System. It might be helpful to read these before going on.
Q3 – What is the legal status of directors?
Directors have different rights and responsibilities from employees, and are classed as office holders. Office holders are neither employees nor workers. However, it’s possible for someone to be an office holder and an employee if they have an employment contract with the same company or organisation that meets the criteria for employees.
Q4 – Can overseas directors come to work in the UK without a working VISA?
The short answer to this is no. Overseas directors are bound by the same visa rules as everyone else. However, also like everyone else there are certain exceptions. The most obvious work exception is the visitor rules exception. It might also be possible to apply for a Sole Visitor Visa.
Q5 – Can you explain the visitors rule exceptions?
In essence the standard visitor rules allow short-term visitors (visitors coming to the UK for up to 6 months) to perform certain ‘permitted activities’, providing that they don’t do any other work. The permitted activities are set out in the Home Office’s Immigration Rules (Appendix 3 of Appendix 5). These are quite complex, but I have paraphrased the permitted activities that are most likely to apply below.
The permitted activities that a business visitor may perform are to:
- attend meetings, conferences, seminars, interviews;
- give a one-off or short series of talks and speeches provided these are not organised as commercial events and will not make a profit for the organiser;
- negotiate and sign deals and contracts;
- attend trade fairs, for promotional work only, provided the visitor is not directly selling;
- carry out site visits and inspections;
- gather information for their employment overseas;
- be briefed on the requirements of a UK based customer, provided any work for the customer is done outside of the UK.
Allowed intra-corporate permitted activities are to:
- advise and consult;
- provide training;
- share skills and knowledge; on a specific internal project with UK employees of the same corporate group, provided no work is carried out directly with clients.
Q6 – Is a visitors Visa needed?
EU nationals won’t usually need a visitors Visa if they are covered by these rules. However, visitors from other countries will usually need a visitors visa if they are what is known as a Visa National. Visa Nationals are people that come from a country in the Visa National List. Home Office’s Immigration Rules (Appendix 2 of Appendix 5).
Q7 – What is the Sole Representative Visa
The Sole Representative Visa is designed to enable overseas businesses to set up new operations in the UK. The Sole Representative Visa allows overseas companies to send a single employee to the UK to set up a branch or subsidiary. To qualify, the person needs to have been employed by the overseas company for at least 6 months and must not hold more than 50% of the shares in the overseas company. Once the UK business is operational, or other overseas people are required, the company needs to apply for a UK sponsorship licence and use either the Skilled Worker or Intercompany Transfer Visa.
Overview The aim of this note is to provide an overview […]