The Tier 1 investor route allowing and encouraging high net worth individuals to invest in the UK will be suspended until further notice from midnight on Friday 7th December 2018 due to a crackdown to combat organised crime, money laundering and corruption. The investor route will re-open for applications in 2019 (no specific date given) with changes to the requirements where applicants would be required to provide detailed and comprehensive audit trails illustrating the source of funds. In addition, it is stated that government bonds will be removed from the list of acceptable investments requiring high net worth individuals to invest in active and trading UK companies rather than loaning the government money by way of gilts/bonds to qualify.
The Tier 1 investor route provided generous immigration benefits for high net worth individuals making a substantial investment in the UK. The high net worth individuals enjoyed benefits seldom available to other migrants such as no English language requirement and no separate maintenance requirements. The rational being that they will be able to look after themselves given their overall wealth. A 2 million pound investment would enable a high net worth individual to obtain a visa and remain in the UK after five years. However, a larger investment would enable high net worth individuals to apply for accelerated indefinite leave to remain (ILR) after a continuous period of 2 years (with a 10 million pound investment) and 3 years (with a 5 million pound investment).
Due to serious concerns that the investor route was being used to launder money which in turn led to an increase in organised crime and corruption the Immigration Minister Caroline Nokes stated:
“The UK will always be open to legitimate and genuine investors who are committed to helping our economy and business grow. However, I have been clear that we will not tolerate people who do not play by the rules and seek to abuse the system.
"This is why I am bringing forward these new measures which will make sure that only genuine investors, who intend to support UK businesses , can benefit from our immigration system.”
This year, more than 1000 high net worth individuals were granted the investor visa. In July this year there had been a 46% increase in the number of applicants with over 400 applications. More than 1000 Tier 1 investor visas were issued in 2017 with the highest numbers given to Russian and Chinese high net worth individuals. It is reported that there may also be a geopolitical factor involved in the aftermath of the Salisbury poisonings to halt wealthy Russian links to the Putin administration. It has been reported that a Home Office source stated that the Chelsea Football club owner Roman Abramovich has been affected by the increased scrutiny on the Tier 1 investor scheme who subsequently became an Israeli citizen.
Transparency International assert that “between 2008 and 2015, the UK Tier 1 investment Visa suffered a ‘blind faith’ period during which 3000 high net worth people entered the UK, bringing with them at least £3.15 billion (3.6 billion euros) of questionable legitimacy”.
The Migration Advisory Committee has stated that the investor scheme delivered little economic benefit for British citizens because most of the applications involved bond and gilt type investments that were loaning the government money not investing in the UK.
Moving forward the Home Office indicated there will be provisions for pooled investments, supported by the government with a view to provide economic benefit to the UK such as supporting small and medium sized businesses. A statement of changes is due to be laid before Parliament today. It is highly likely that the policy reasons for the government measures will be given.
For assistance with any Tier 1 related issues, please contact the High Net worth individual and Business Immigration specialists at Duncan Lewis Solicitors Ayan Yalchin (020 7275 2011 or email@example.com), Vicash Ramkissoon (020 3114 1105 or firstname.lastname@example.org) and Tamana Aziz (020 3114 1130 or email@example.com).
Duncan Lewis Business Immigration Solicitors
Our Immigration department is ranked as a top-tier practice in Immigration: human rights, appeals and overstay matters in The Legal 500 2019.
Our Business Immigration team continue to be ranked by Legal 500 with the 2019 edition praising their practice, representing ‘SME clients on a range of matters such as the PBS, sponsorship licence applications, and compliance [and acting] for high-net-worth individuals from Asia, Russia and the Middle East on Tier 1 and investor visas.’
As leading immigration specialists we advise on business immigration, right to work in the UK, Tier 2 visa applications, student/graduate visas, spousal visas and visa overstays. We are also able to advise businesses and individuals on any changes to UK immigration law during Brexit negotiations and after 29 March 2019, post-Brexit.
For expert legal advice call Duncan Lewis immigration solicitors on 033 3772 0409.