By Uglobal Staff
The United Kingdom’s controversial decision to leave the European Union made headlines around the world, but what some see as a mistake, could create new opportunities for others. Among them, those looking to become Scottish residents, and later citizens, through a Tier 1 (Investor) visa. It’s a relatively straightforward way for people with money to become British citizens in comparison to other visa categories where applicants have to be sponsored by an employer and have less control over their immigration status.
“Since the UK voted to leave the EU, we have seen a gradual increase in the number of visas issued, and this is potentially because the lower value of Sterling means it is easier for investors to meet the financial requirements, or it could be because investors anticipate growth in the market,” said Stuart McWilliams, accredited specialist in immigration law and senior associate for Morton Fraser LLP.
The Scotland-based lawyer said most of the applications come from Chinese nationals and, until not so long ago, Russians. Americans have also shown more interest in Scotland recently, which McWilliams speculates could be due to the low value of the pound against the dollar.
“I have also spoken with a number of U.S. nationals who are interested in using the visa route but are waiting to find out if Scotland will have another independence referendum before they decide to invest here,” he said.
McWilliams said some of his clients delayed their move to the UK until referendum results became known, and he anticipates another referendum would invoke a similar reaction.
While Scotland has a separate legal system, its immigration rules are the same as any other part of the UK. Anyone from outside of the European Economic Area and Switzerland who wants to invest at least 2 million British pounds, can prove the money belongs to him/her or a spouse or life partner, and has a UK bank account can apply for the Tier 1 Investor visa. The money must be “held in one or more regulated financial institutions” and available to spend in the UK. On top of the minimum investment, the initial visa costs 1,561 pounds.
Investing more money speeds up the residency process. McWilliams said the 2 million pounds investment can lead to the right to stay in UK after five years of living in the country.
“If someone invests 5 million pounds, they can apply for indefinite leave to remain after three years, and if they invest 10 million pounds, the qualifying period is two years,” McWilliams said. “In all cases, someone has to be in the UK for at least six years before they can apply for British citizenship.”
The overall process seems straightforward, but McWilliams warns it is very technical when it comes to how and when the funds are invested, and often problems go unnoticed until it is too late. He said he advises his clients to hire a financial advisor to avoid unpleasant surprises.
“In my experience, because the rules are so strict on how funds should be invested and there are complex rules about what happens if the value of an investment falls, investors will often invest in government bonds or low risk shares,” he said.
Those who don’t have millions at their disposal can still apply to become UK residents through the Tier 1 Entrepreneur visa, which requires an investment of at least 50,000 pounds and meeting several other eligibility criteria. The fee for applications submitted outside of the country is 982 pounds, in-country applications are 1,806 pounds. Just like with the investor visa, the process can be complicated.
“There are risks. A requirement for these applications is to demonstrate from the outset that a large sum of money is held (or held in conjunction with supporting venture capital firms) for the purposes of investment,” Liam Gallagher, an immigration lawyer at Immigration Advice Service, said. His firm handles both Tier 1 Investor and Tier 1 Entrepreneur cases. “Although it may seem a bit harsh, we adhere to the idea that the Home Office staff presiding over the application are trying to fail it. It is crucial that the business plan is constructed in as robust a manner as possible.”
Gallagher said his firm takes on about 10 cases a week.
“We find that in spite of the difficult and cutthroat market environment, there are far more people willing to take bigger and bolder risks,” he said.
Gallagher said historically, most investments happened in or around London but developments in transport and technology eliminated the need to physically be where all the businesses are.
“This is particularly prevalent in Scotland as the major cities are diversifying quickly, often encouraged by the high-caliber of potential employees leaving university who are ready and willing to take larger risks in pursuit of success,” he said. “Individuals benefit from the hard work they put in. Over a short period of time, they will have made numerous contacts and established lasting personal relationships which can lead to other interesting routes being followed.”