Changes to immigration rules that encourage entrepreneurs into the UK are coming into force on Thursday to help tackle alleged abuse of the system.
Immigration minister Mark Harper said that due to a tightening of other migration routes, the entrepreneur route is "now being targeted by applicants seeking to abuse the immigration rules".
In a written parliamentary statement, Harper said that fake businesses are being created and funds to prove eligibility are being recycled.
"We need to tighten the current rules to allow for a meaningful assessment of the credibility of an applicant for this route," he added.
Changes to the entrepreneur route were made in April 2011, to encourage greater uptake, and have successfully generated a steady increase in overseas applications, said Harper.
But an abuse of the system has led the immigration minister to introduce a 'genuine entrepreneur' test to allow the UK Border Agency to "test the credibility of suspicious applicants".
He will also make a further change to "require the necessary minimum funds to be held, or invested in the business, on an ongoing basis rather than solely at the time of the application".
This will apply to those already in the UK and those who apply to come here under the entrepreneur route, he said.
However, he added: "At the same time, we will protect genuine entrepreneurs and continue to encourage them to invest in the UK where they will be made welcome."