At Remitly we know that immigrant workers have had a real impact on the UK’s economic growth. And while numbers are lower than in previous years, immigrants have transformed the UK generally, and its economy in particular. Overall, the UK has become more multicultural, local councils collect more taxes, and new immigrant-run businesses are popping up around the country.
Immigrant-driven business growth
Though the latest figures show a net fall in long-term migration in the last few years, the UK has always been a hotbed for immigration. Between June 2023 and June 2024, for example, over 1.2 million foreign-born individuals moved to the UK, with most coming on a work or study visa.
Foreign-born founders opened just over 36,000 businesses in the UK in 2021, the most recent year figures are available—that’s a 4.2% jump from previous years. In fact, reports show that today, 39% of the UK’s top 100 fastest-growing companies are owned and operated by skilled immigrants. These businesses span a broad range of sectors—from technology to hospitality, healthcare, retail, and professional services—fueling growth in the UK economy.
History of immigration to the UK
Historically, the UK has been a haven for travellers and global citizens. After the Second World War, massive investments in infrastructure and rebuilding efforts created thousands of jobs, causing the first “gold” rush to the British Isles. And immigration reached new levels once the EU expanded to welcome the UK.
There are various reasons foreigners choose to settle in the UK:
- To be closer to family (37%)
- Better job prospects professional (29%)
- Academic opportunities (14%)
But the challenges that come with a growing foreign-born population are no secret. Locals typically express concerns about job losses, overcrowding, rising rental prices, and crime rates. British legislators worked to mitigate these negative impacts through the 1971 Immigration Act, which added new restrictions.
However, the influx of both EU- and non-EU/EEA nationals from global conflicts and complications from the COVID-19 pandemic only intensified the problem. These issues triggered a domino effect in the UK that inspired Brexit and other key policy changes, and affected public sentiment on immigration over the longer term.
But, while some people focus on the negatives, research shows that less restrictive borders have a net positive impact on the local economy.
Immigration, the unexpected driver of business growth and innovation
Immigrant entrepreneurs are vital to the country’s business ecosystem. As already established, they run some of the UK’s most successful start-ups. But it goes even deeper than that; foreign-born founders account for 32% of the 100 fastest-growing companies.
Other benefits include:
- Boosting GDP through entrepreneurship and job creation, especially relevant in a post-Brexit landscape.
- Community building, as immigrant businesses often serve as vibrant communal hubs.
- Fostering cultural diversity and the exchange of ideas.
- Introducing diverse skill sets to the UK labour market.
But how exactly do cultural diversity and specialised skills fuel innovation and growth?
Cultural differences spark Innovative ideas
When immigrants start a business, they bring a whole new perspective to endeavour. These entrepreneurs suggest new ideas, introducing new ways of doing things and innovating processes.
In addition, immigrant-owned start-ups often celebrate their founders’ cultures. In doing so, they borrow elements from each culture’s practices and trends to innovate everything from food to the arts and more. Through cultural diversity, consumers enjoy a greater variety of choices.
Filling the skills gap
According to reports, the UK will need around 314,000 more full-time workers in the NHS before 2030. However, the demand for these professionals far outstrips supply—data shows that 10% of nursing positions remained unfilled in 2023 alone.
This scenario plays out almost exactly in every industry in the UK, from private enterprises to public service. There is a shortage of workers with specialised skills, creating space for immigrants to fill the skills gap.
Examples of successful, immigrant-owned businesses in the UK
From the most recent data, the fastest-growing UK start-ups are headed by immigrant entrepreneurs from countries like the US, Italy, France, Canada, and more. Here’s a breakdown of the top 100 foreign-born founders by region:
| Region | % |
| Europe | 53 |
| North America | 17 |
| Asia | 11 |
| Middle East | 8 |
| Oceania | 5 |
| Africa | 4 |
(Source)
There are many more inspiring examples of such enterprises at every level of business across the UK. Some notable examples include:
- Deliveroo: Started by an American founder and British co-founder in 2013, Deliveroo is a big player in the UK’s online food delivery market.
- Oddbox: This innovative social impact fruit and veg company was co-founded by a duo of French and Indian nationalities.
- Synthesia: This start-up, launched in 2017, helps users create AI-generated video content; it was founded by British, German, and Danish innovators.
- Uniplaces: Started by a team of Portuguese, Argentinian, and UK-born entrepreneurs, this company links students with safe accommodation options.
Immigration and the UK private sector
While immigration has transformed the UK labour market, the post-Brexit immigration system has seen some employers struggling to navigate new changes. Nonetheless, immigration continues to transform the UK labour market in several interesting ways:
Jobs and employment prospects
In the last decade, researchers and policy-makers have conducted several studies to determine how migration affects job prospects for UK-born residents.
This has been a challenging undertaking for several reasons. Different researchers focus on different time periods, differ in scope, and use different data sets and methods. This makes it difficult to get consistent numbers across the board.
But there are some inescapable conclusions:
- Immigration has no measurable impact on available job opportunities for existing workers.
- In cases where it did have an impact, the effects were felt only by workers in certain demographics.
- Global economic up- and downswings caused more adverse effects on the labour market than immigration.
Effects on salary
Additionally, researchers found that the influx of migrants to the UK had negligible impacts on the wages received by UK-born workers. In fact, the most recent study discovered that, between 1994 and 2016, immigration to the UK accounted for a halfpenny loss in wages per year—but only among minimum wage earners.
These small drops were most likely to affect low-wage sectors like retail and hospitality, and in fact the most likely group to experience negative effects on wages due to immigration were migrant workers themselves.
Impact of immigrant entrepreneurship on UK employment
Another key study area has been the effect of immigrant entrepreneurship on the number of jobs in the UK. Getting firm, up-to-date figures is a challenge, as most research focuses on the social and political effects of immigration, rather than quantifying their economic impact.
However, a 2015 study found that immigrant entrepreneurs added more than 1.1 million jobs to the UK labour market. This not only led to overall GDP growth, but also faster, more effective integration by migrants and their families into the local community.
Initiatives supporting immigrant entrepreneurs in the UK
In light of their positive contributions, the UK has established several exciting initiatives to support migrants with entrepreneurial dreams. Besides offering public services tailored for founders, the UK government also provides dedicated visas for immigrant entrepreneurs:
Indefinite Leave to Remain (ILR) Visa
An Indefinite Leave to Remain (ILR) is a visa that gives migrants a path to settlement in Britain. With this visa, individuals can live, work, and study permanently across the British Isles. They can also use it to apply for UK citizenship.
So, who’s eligible to apply for the UK ILR? They include:
- Applicants with a work visa who have lived in the UK for three to five years, depending on the visa type.
- Applicants who have lived in the UK for ten years or more.
- Commonwealth citizens who have lived in the UK for five years or more through the UK Ancestry Visa.
- Applicants with family members already in the UK.
- Applicants who are refugees or have served in the armed forces.
Applicants in all categories may also need to meet financial and salary requirements, set depending on visa type.
Youth Mobility Scheme Visa
The Youth Mobility Scheme visa is a unique initiative that lets recipients live and work in the UK for up to 24 months. It’s open to individuals between 18 and 30 years of age, but the age limit extends to 35 for citizens from certain countries, including Australia, Canada, New Zealand, and South Korea.
Eligibility requirements for this visa are as follows:
- Applicants must meet the minimum age limits.
- Proof of £2,530 in a current bank account.
- Applicants must come from countries outlined in the eligibility requirements.
- Applicants must be able to pay the application fee and healthcare surcharge.
This visa is ideal for young entrepreneurs as it allows visa holders to enter and leave the country at any time during the validity period. Applicants from Australia, Canada, and New Zealand can extend their stay for an additional year.
Innovator Founder Visa
The Innovator Founder Visa is the UK’s most comprehensive visa for entrepreneurs. It allows individuals to establish innovation-driven businesses that offer completely unique products or services to the UK market. This visa lets innovators stay in the UK for up to three years.
Eligibility requirements for this visa include:
- Proof that the business idea is new, innovative, viable, and scalable.
- Endorsement of the business idea by a relevant endorsing body.
- Proof of English fluency.
Applicants can get this visa in only three to eight weeks.
Challenges and opportunities post-Brexit
After Brexit, the UK adopted a new immigration system that ended free movement with the EU and the broader EEA region.
Besides limiting the movement of people, experts expect the new rules to redefine migrant demographics and the skill sets available to the UK labour market. It will also lead to significantly less immigration into the UK in the coming years, likely compounding the labour shortage and skills gap problem nationwide.
More importantly, the UK economy may miss out on some of the benefits of immigrant entrepreneurship, including job creation and higher tax collection.
But with challenges come opportunities, and there are plenty for migrants to the UK, even post-Brexit:
- More high-skilled, higher-income workers will enter the UK labour market.
- There will be more vacancies for workers in the hospitality, administrative services, and social care sectors.
- Service-sector workers could receive higher wages.
- More international students will come to study in the UK, especially at the graduate level.
These new policies promise to transform the face of the UK and set the tone for future economic growth.
The future of UK immigration
The UK provides a world of opportunity for ambitious migrants ready to impact their communities positively. With excellent public services and amenities, a fantastic education system, and high quality of living, this would be a great place to settle and call home.
FAQs
Why does the UK attract so many immigrants?
The UK is an attractive destination for migrants due to a combination of reasons, including its political stability, robust economy, access to education, healthcare, welfare and other social services, and plentiful job opportunities for skilled workers.
How does immigration affect businesses in the UK?
Immigration has net positive impacts for businesses in the UK as it encourages innovation, provides access to a wider talent pool, fills skills gaps, and sparks overall economic growth.
How do immigrants contribute to the UK economy?
Migrants contribute to the UK economy in several ways, including starting new businesses, creating more jobs, developing local communities, and boosting the GDP through taxes.
What immigrant-owned businesses are in the UK?
There are thousands of immigrant-owned businesses in the UK today. Deliveroo, Oddbox, Synthesia, and Uniplaces are just a few examples.
How will Brexit affect small businesses in the UK?
Brexit will continue to affect small businesses in the UK in several ways, from staffing challenges to higher import and export costs, increased administrative burden, potential tariffs, and reduced access to EU markets. However, the UK government is already setting policies to limit these adverse effects, such as welcoming high-skilled migrants and improving wages in the lowest percentiles.
