Withdrawal of Tier1 Investor Visa, UK and Its Implications

The Tier 1 Investor visa is being withdrawn by the UK authorities in December, 2017. This is sad news for the foreign investors looking to invest and expand business opportunities in UK and also for UK businesses who are dependent on foreign investment and capital. Currently, the Tier 1 Investor visa provides unique benefits to its holders. These benefits include, that the holder does not need to meet the English language requirements, meet any age or education criteria, their dependents including spouse and children can reside in the Uk, they can enter and exit the country in an unrestricted fashion, they are eligible to make land investments, their spouse can seek employment in the country, also they are eligible to apply for Indefinite leave to remain depending on their investment and completion of five years in UK. Also, they can apply for

British citizenship one year post obtaining the indefinite leave to remain in UK.

This visa is increasingly used by high net worth individuals to conduct business in the UK in a flexible and expedient manner.

What is the reason behind the withdrawal of this visa?

Firstly, there is a widespread notion that this visa is a gateway for the super rich to purchasing themselves a European passport. Thus, questioning the credibility of the immigration rules and regulations.

Secondly, there is an emerging concern for granting entry to individuals with dubious wealth in the country.

These two factors seem to be the prime reason for driving this movement of bringing an end to the investor route.

To combat these, earlier in 2014, the visa had undergone evolvement to include few changes. These changes included:

1. Investment funds requirement was raised from £1 million to £2 million.2. All of this investment had to be invested in UK, earlier the investment limit was at 25% of the funds (in UK property, which could be used for residential purposes).3. Applicants were not permitted to borrow any part of the funds.4. Visa can now be refused if the immigration authorities find the investment funds have been procured illegally or the investor is of dubious character.

With these reforms in the Tier 1 visa application and eligibility rules in 2014, it was observed that there was a significant decrease in the volume of high net worth individuals applying for this visa, thus achieving the purpose of the reform. Thus, it also ensures that there are enough safeguards put in place to minimise ‘dirty money’ from coming into the UK, particularly using this route.

Need of expert immigration legal advice

This change in regulation has impacted the advisors, wealth managers and high net worth intermediaries to immediately advise their clients. Clients should be informed of the increased fund amount and that it should have been in the applicants account for more than 90 days and shouldn’t have been borrowed. It is necessary to have all paperwork in order, as any enquiry and investigations initiated by the UK border agency may lead to prolonging of the process.

This news of withdrawal has naturally raised concern among investors as more and more high net worth individuals want to return to the stable economies of UK and US especially post the downturn in emerging markets.