OTS Academy - Resident Labour Market Test – the high value inward investment exemption

Organisations looking to recruit skilled workers from outside the EEA using the Tier 2 visa route will usually need to satisfy the Resident Labour Market Test. This is designed to demonstrate that there is no one with the relevant skills within the UK’s settled labour market. There are exemptions, circumstances when an employer will not need to satisfy the Resident Labour Market Test. In this blog, our London immigration solicitors look at the high value inward investment exemption.


sponsorship licence Applications and the Resident Labour Market Test


If your organisation wishes to sponsor skilled workers as they apply for a Tier 2 visa, you need to have completed a sponsorship licence application. With this completed, and your Sponsor Licence in place, you will be able to recruit from outside the EEA to fill skilled vacancies. That’s not the end of the matter though. Your organisation must maintain the right systems in place and follow the correct procedures to issue certificates of sponsorship in each individual case. In most cases, the Resident Labour Market Test is an integral part of this recruitment process. The test is designed to make sure that recruitment from overseas only takes place when there is no available person with the right skills within the settled UK workforce. Satisfying the test requires a number of steps to be fulfilled and can be time consuming – it can also be costly if you get it wrong, meaning that you may be left with a critical skills gap in your workforce that can’t be filled from the settled workforce, nor from abroad.


Exemptions from carrying out the Resident Labour Market Test


There are a number of circumstances in which organisations do not have to satisfy the Resident Labour Market Test before recruiting from overseas. The Resident Labour Market Test exemptions include where someone is continuing to work in the same occupation and needs to extend their leave to stay in the UK; where the role is on the Shortage Occupation List; if you’re intending to sponsor someone who is switching to a Tier 2 visa after a period of study; and where the Certificate of Sponsorship is for a ‘high earner’ (currently if the salary package is over £159,599). Another important exemption to the Resident Labour Market Test is for High Value Inward Investment posts.


High Value Inward Investment Posts


Organisations do not have to satisfy the Resident Labour Market Test if the certificate of sponsorship is to be issued in respect of someone coming to work in your organisation in the UK, from an overseas firm, in connection with either the relocation of a high value business to the UK, or a significant new inward investment project. The details of the exemption are included in Home Office guidance for Tiers 2 and 5 sponsorship. It essentially supports businesses in the UK which are branches of, or wholly owned subsidiaries of businesses which have a principal place of business outside the UK. 


To satisfy the exemption, you must fulfil the following requirements:


Companies House registration 

- Your organisation must have been registered in the UK with Companies House no earlier than 3 years before the date the Certificate of Sponsorship is assigned 


Registered Branch or Wholly Owned Subsidiary 

- You must be the registered branch or wholly owned subsidiary of a business which has its headquarters and principal place of business outside the UK 


Capital expenditure or job creation

- The relocation or inward investment must involve new capital expenditure of £27 million or the creation of at least 21 new UK jobs 



- You must be able to provide evidence of the new capital expenditure or the job creation, or evidence that it will take place as part of the existing project, if the capital expenditure or job creation has not take place at the time the certificate of sponsorship is assigned. 


The exemption is clear that it must be ‘You or the overseas business of which you are the branch or subsidiary’ which is the entity making the investment. It is not enough for you to be supplying services to a third party client which is making the investment. 


Taking advice from experienced Immigration lawyers is imperative


If you have not already taken advice about whether your circumstances fit the high value inward investment posts exemption from conducting the Resident Labour Market Test, it’s worth consulting an Immigration solicitor to make sure you get it right. 


OTS Solicitors are some of the best Immigration lawyers in London, recommended in the Legal 500 for Immigration matters. We have also been awarded the Corporate Insider Business Immigration Law Firm of the year for 2018, confirming our position as top Immigration solicitors in the UK. We can help with all aspects of your Business Immigration, including sponsorship licence applications. Book an appointment to speak to a Legal 500 Immigration solicitor today by calling 0203 959 9123.



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