[2025] UKUT 00091 (IAC)

The first issue to resolve is the proper construction of Appendix ROB 8.6(a). I formulated this issue in the following terms at the outset of this judgment: at which point in time must a UK-based subsidiary be “wholly-owned” by an overseas business for the purposes of para. 8.6(a) of Appendix ROB? Put simply, does the UK-based subsidiary of an overseas business have to have been wholly-owned by the overseas business from its incorporation (as the Secretary of State contends), or is it sufficient for it to be wholly-owned by the overseas business by the time an applicant makes the application under Appendix ROB (as the applicant contends)?

I will follow the established approach to the construction of the Immigration Rules. See Mahad v Entry Clearance Officer [2009] UKSC 16. At para. 10, Lord Brown of Eaton-under-Heywood cited Odelola v Secretary of State for the Home Department [2009] 1 WLR 1230, 1233 at para. 4:

“Like any other question of construction, this [whether a rule change applies to all undetermined applications or only to subsequent applications] depends upon the language of the rule, construed against the relevant background. That involves a consideration of the immigration rules as a whole and the function which they serve in the administration of immigration policy.”

At para. 10 of Mahad, Lord Brown continued:

“Essentially it comes to this. The Rules are not to be construed with all the strictness applicable to the construction of a statute or a statutory instrument but, instead, sensibly according to the natural and ordinary meaning of the words used, recognising that they are statements of the Secretary of State's administrative policy.”

Applying those principles to these proceedings, I begin with the language of the rules (“the natural and ordinary meaning of the words used”).

By way of a preliminary observation, an applicant may qualify under para. ROB 8.6(a) in one of two ways First, through establishing the “registered branch” of the overseas business, or, secondly, by establishing the “wholly-owned subsidiary” of the overseas business. Those terms are illuminated by the specified documentary evidence required for each route pursuant to para. 8.6(c)(ii). Where an applicant establishes a registered branch, para. (ii) requires a “certificate of registration” issued by Companies House. By contrast, in the case of a subsidiary, para. (ii) requires the certificate of incorporation “together with a copy of the share register”. There is, accordingly, a clear difference between the two terms. The “registered branch” route does not require the UK-based entity to have been incorporated in the UK, where as the “wholly-owned” route does.

It is not the applicants’ case that the first applicant established a registered branch of Serena UK. Their case is that, properly understood, she established a wholly-owned subsidiary of Serena UAE, and that that arrangement met the requirements of ROB 8.6(a) because Serena UAE was the 100% shareholder at the date of the first applicant’s application under Appendix ROB. I will therefore focus on the “wholly-owed” requirement but will return to the impact of this distinction in due course.

By way of a further preliminary observation, there was some discussion at the hearing as to whether an applicant under Appendix ROB 8.6(a) could have held the shares in their personal capacity, but on trust for the overseas business. Mr Yarrow accepted that that would be possible, but made two points, both of which I accept. The first is that it is not the applicants’ case that the shares were held by the first applicant on trust for Serena UAE. Their case is that the “wholly-owned” requirement is only engaged at the point of the application under Appendix ROB, not that, properly understood, the shares were held on trust for Serena UAE all along. The second point advanced by Mr Yarrow was that there is no evidence of any trust arrangement in any event. I therefore accept that a trust arrangement may, in principle, satisfy the “wholly-owned” requirement, but conclude that that possibility does not take matters further in these proceedings.

I commence with the requirement in sub-para. (a) that an applicant:

“must have established the… wholly-owned subsidiary of the overseas business.”

Eligibility under this route is anchored to the act of having established the wholly-owned subsidiary of the overseas business. “Must have established” means that it is the applicant under those rules who did the establishing. The object of the verb is the UK-based, wholly-owned subsidiary, which the applicant must “have established”.

It is difficult to see how an applicant could have “established… the wholly-owned subsidiary” if, at the time of the establishment, the UK company was not wholly-owned by the overseas business and was instead owned by some other person (or an applicant). This is for the following reasons.

First, the applicants’ construction would be at odds with what this sub-paragraph of the rules says. A defining characteristic of the business that has been established under ROB 8.6(a) is that it must be “wholly-owned” by the overseas company. If at the time of the company’s incorporation the company is owned by another person or organisation, an applicant will not have “established… the wholly-owned subsidiary”. Rather the applicant would have established a company that later became a wholly-owned subsidiary.

Had the “wholly-owned” limb of ROB 8.6(a) intended to capture a company established by an applicant that was owned by an entity other than the overseas business, it would have said so. The rule would have expressly permitted and recognised the possibility that the subsidiary need not initially have been wholly-owned by the overseas company, and would instead have provided that, by the time of the application, the subsidiary was wholly-owned by the overseas company, that would have been sufficient. There is no such requirement.

Secondly, some light is cast on this temporal issue by the “registered branch” limb of ROB 8.6(a). By definition, the existence of an overseas parent company of a UK-based registered branch must pre-date the registration of the UK-based registered branch. The corporate relationship between the overseas parent company and the UK-based registered branch would therefore exist from the outset of the registered branch’s registration in the UK and would continue throughout the UK-branch’s operation in the UK.

Para. 8.6(a) would be internally inconsistent if the temporal scope of the “registered branch” requirement differed from that of the “wholly-owned subsidiary” route. It is unlikely that the temporal requirements for each limb would differ so significantly without further clarificatory wording, not least because the requirements feature within the same sentence within the same sub-paragraph of ROB 8.6(a). That is hardly surprising given the rules’ focus on establishing a new business, rather than taking over a different one.

Thirdly, Appendix ROB 8.6(a) requires continuity between the wholly-owned subsidiary which is the subject of the application and the company “for which they were last granted permission under this route”. The permission last granted to the first applicant was entry clearance under para. 144 of the Immigration Rules, as they then were.

Para. 144(ii)(a) provided that an applicant must be:

“seeking entry to the United Kingdom:

(a)

as a senior employee of an overseas business which has no active branch, subsidiary or other representative in the United Kingdom with full authority to take operational decisions on behalf of the overseas business for the purpose of representing it in the United Kingdom by establishing and operating a registered branch or wholly-owned subsidiary of that overseas business, the branch or subsidiary of which will be concerned with same type of business activity as the overseas business…” (emphasis added)

The words emphasised above are similar to those in ROB 8.6(a) but with one addition. As well as “establishing” a registered branch or wholly-owned subsidiary, para. 144(ii)(a) required an applicant to have sought entry for the purposes of “operating” the wholly-owned subsidiary.

The tandem requirements of “establishing and operating” the subsidiary, expressed in present, continuous terms, would not be consistent with establishing a separate entity later coming under the control of the overseas parent company. That is because the requirement to have been “operating” the UK-based subsidiary is engaged from the outset of an applicant’s leave. The first applicant sought permission to enter the United Kingdom on the basis that she was “seeking entry” for the purpose of “establishing and operating” a registered branch or wholly-owned subsidiary. The “and operating” limb of that requirement applies to the wholly-owned subsidiary and applies from the outset of admission to the UK. Para. 144(ii)(a) thus required an applicant to have sought entry for the purposes of establishing and operating a wholly-owned subsidiary of the overseas business from the point at which they arrived. The ordinary meaning of para. 144(ii)(a) is that an applicant must be seeking entry clearance for the purposes of establishing and operatinga wholly-owned subsidiary from the outset of their residence.

That means there must be continuity between the purpose for which an applicant sought entry under para. 144(ii)(a) (“for the purpose of… establishing and operating a registered branch or wholly-owned subsidiary of that overseas business…”) and the requirements of ROB 8.6(a). Para. 144(ii)(a) required the entity to be wholly-owned upon its establishment by an applicant. ROB 8.6(a) maintains that requirement.

Fourthly, Appendix ROB emphasises the need for the UK-based subsidiary to be just that: it must be a subsidiary that is a genuine, UK-based trading limb of an overseas going concern (para. 4.1). It requires an applicant to be a Sole Representative and senior employer of the overseas business, whose role it is to establish and supervise the UK-based subsidiary (para. 4.4(a)). Para. 5.1 requires applicants to be genuine representatives of the overseas business and excludes applicants in relation to whom the decision maker has reasonable grounds to believe that the business is being established in the UK “mainly” so that the applicant may apply for permission to stay (para. 5.2). The overall thrust of the regime targets genuine, UK-based subsidiaries of an overseas business. A domestic entity that was established by an applicant in her personal capacity and only later transferred to the overseas business would be inconsistent with the relevant background insofar as that may be gleaned from the face of Appendix ROB itself. That context is consistent with the analysis of the wording of the relevant rules themselves, above.

Drawing this analysis together, I accept the Secretary of State’s submissions and reject those advanced by Mr Nasim:

Applied to these proceedings, on a plain reading of the rule the Secretary of State was entitled to refuse the application citing para. 8.6(a). At the date of Serena Euro’s incorporation, the applicant was the sole shareholder, not Serena UAE. That meant that para. 8.6(a) was not met because the applicant had not established a wholly-owned subsidiary. She had established a separate entity that was later transferred to Serena UAE’s ownership. The Secretary of State was entitled to refuse the application in the decision dated 23 April 2023 on that basis, for the reasons she gave. That was because, on the basis of the materials that were before the Secretary of State at the point of the application, the documents from Companies House demonstrated that the applicant was the 100% shareholder of Serena Euro.

Of course, upon taking the AR decision, the Secretary of State had available to her further material relating to the Companies House records. The decision stated as follows:

“The UK company shareholding was only amended shortly before your leave to remain application and the overseas parent company did not hold 100% of the shares of the UK company for the majority of your grant of leave in the UK. As such, I am satisfied that your application has not the requirements of ROB 8.6.”

In light of the analysis above, that analysis was entirely open to the Secretary of State.