Last Thursday we had some dramatic and unforeseen news that the Tier 1 Investor visa was to be suspended by midnight on 6 December 2018. This seemed to follow from growing concern that this visa had been used by the super-rich to launder their ill-gotten wealth. Earlier this year Roman Abramovich, Chelsea FC owner and friend of Russian president Vladimir Putin, withdrew his Tier 1 application as relations between Russia and the UK became tense. Nevertheless up to September 2018, over 1,000 people have been granted the Tier 1 Investor visa.
The Tier 1 Investor visa allowed people to invest £2m in government bonds or in share capital or loan capital in active and trading United Kingdom registered companies. It also allowed them to live in the UK for up to 5 years.
It seems that this visa route is now going to be restricted because it may have been abused by some in the past. It has been a reasonably successful route for those who are wealthy and want to use this route to settle in the UK. In our view, the Home Office has always had the opportunity to vet applicants with regards to their source of funds even under the current route as there has always been a good character requirement.
The reformed visa will mean that applicants’ financial and business interests will be subject to more scrutiny and they will have to demonstrate the source of their investment funds as well as having to show that they have had control of these funds for over 2 years as opposed to the current 3 months.
Applicants will no longer be able to invest in government bonds as part of the reforms, and must invest in active and trading UK companies. Whilst this is not a bad thing, applicants will be forced into investing in potentially riskier investments and those who might have been looking for the least risky investment will now no longer be able to invest in government bonds.
Overall, it seems that there is no threat to the principle of the Tier 1 scheme. The Government is keen to attract investment in the UK and it has been has said that “The UK will always be open to legitimate and genuine investors who are committed to helping our economy and businesses grow”.
Since the announcement last Thursday, it has now transpired that we have had confirmation from the Immigration Law Practitioners’ Association that the Tier 1 Investor visa has not yet been suspended. We will however see changes to the Tier 1 Investor scheme in early spring with the other potential changes which have been announced for the Tier 1 Entrepreneur visa. We will however keep you posted on any further developments.
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