07 Mar Tier 1 Investor Visa – what is it worth?
The government took a closer look at the current Tier 1 Investor visa scheme questioning its efficacy in terms of direct benefits to the UK economy and how the system can be renewed offering wider opportunities for investors.
According to the system in place, a minimum investment in the amount of £1 million is required in order to be eligible to apply for the Tier 1 visa. The funds have to be invested in the UK listed public companies. The programme is very popular among wealthy individuals, especially from emerging economies such as China and Russia. It offers considerable advantages to it beneficiaries, who are mainly looking for long term security and financial stability, high quality of life standards and access to top education offered by the UK.
The Migration Advisory Committee (MAC) published a report with recommendations for future reforms. The main novelty is the suggestion to increase the current minimum threshold from £1 million to £2 million. This recommendation is based on the fact that the threshold of £1 million was not revised since its establishment in 1994 in line with earnings growth. On a more positive note, it was suggested to widen the investment options so the applicant will have more freedom and choice as to where to invest his/her funds. For example, the MAC proposes to introduce the possibility to invest in infrastructure bonds and start up business which will be more beneficial both for investors and British economy.
In addition, a very positive recommendation was made to remove the “topping up” rule from the Tier 1 Investor programme. According to the current Immigration Rules, in case of shortfall due to market fluctuation, the investor has to top up the funds in order to continue satisfying the conditions attached to his visa. The removal of the “topping up” rule will enable the applicant to invest the initial funds without worrying as for the future impact of the market changes on his/her investment.
MAC also suggests relaxing the residence requirements for accelerated settlement for investors choosing the premium route on the basis of the auction system (currently under consideration). At present, applicants who choose to invest £5 and £10 million are eligible to apply for settlement after respectively 3 and 2 years provided that they spend a minimum of 185 days during each 12 months period in the UK preceding the submission of the application.
Many applicants consider the residence requirement a burden because of their business activities which require them to travel extensively. MAC recommends relaxing the residence requirement for the applicants using the premium route as they will be able to apply for a settlement after spending only 2 years in the UK with a minimum of 90 days residence requirement per year. It is not yet clear if this suggestion will affect the current £5 and £10 million routes.
The government has not yet responded to MAC’s recommendations; however, we understand that it is currently working on measures to improve and renew the current Tier 1 Investor visa scheme that will benefit both investors and the UK economy.
If you have any questions regarding the Tier 1 Investor visa please contact us on +44 20 3384 3075 or via email [email protected].