By Salman Siddiqui
The UK home secretary has announced the shutting down of the Tier 1 Investor visa route for foreign investors with immediate effect citing national security concerns – a move that caught many British investment immigration professionals by surprise. The move could end up creating more challenges for genuine HNWIs who want to get a British visa, professionals say.
Immigration advisor Henan Zhang, who works as a business development manager at Migra & Co, said many foreign investors who were eyeing this visa route are impacted.
“This afternoon [on February 17], the home secretary has announced the closure of this visa category with immediate effect. We have been in communication with a number of prospective clients interested in Investor visas who will no longer be able to rely on this route,” Zhang said.
“It all comes as a surprise although the UKVI [UK Visa and Immigration under the Home Office] was considering closing this route before.”
More immigration reforms in the cards for UK
The British Home Secretary Priti Patel did not cite the ongoing Ukraine-Russia crisis as one of the main reasons for ending the Tier 1 Investor visa, and instead called out unnamed “corrupt elites” for the abrupt measure as she hinted that more immigration reforms were in the cards, according to a statement.
“I have zero tolerance for abuse of our immigration system. Under my New Plan for Immigration, I want to ensure the British people have confidence in the system, including stopping corrupt elites who threaten our national security and push dirty money around our cities,” Patel said.
“Closing this route is just the start of our renewed crackdown on fraud and illicit finance. We will be publishing a fraud action plan, while the forthcoming Economic Crime Bill will crackdown on people abusing our financial institutions and better protect the taxpayer.”
Visa route move ‘leaves gap’ in options
Oliver Westmoreland, who is a senior immigration adviser at Get UK Visa, said the UK government’s move has created a gap in the visa options for HNWIs.
“I think it is fair to say that this visa route has been in danger for some time, because of political concerns about dishonestly obtained Russian money coming into the UK. Matters may have been sparked off by events surrounding Ukraine, but these concerns have been around for the last few years.
“This leaves rather a gap in visa route options, because it was the only route that is a ‘pure’ investment route. It rather looks as though high net worth people who want to come to the UK and eventually acquire settlement may have to apply for entrepreneur visas and run a business in the UK, which is a rather different kettle of fish,” Westmoreland told Uglobal.
Innovator visa route set for reform
Immigration advisor Ruslan Kosarenko, a principal partner at Sterling Law Group, said the UK’s Innovator visa, which is mainly for foreign entrepreneurs who can implement unique and innovative business ideas, was expected to see some changes soon.
"Right now, the UK is reviewing the innovator route and is likely to introduce certain changes to it to make alternative provisions for investment-related migration. We expect those changes to be announced in autumn 2022 together with other amendments to the immigration rules," Kosarenko said.
The UK Home Office statement also confirmed that “improvements will be made to the Innovator visa.”
Passive investments no longer eligible in the UK
Zhang said the Tier 1 Investor visa had appealed to many foreign investors because it offered them the freedom to choose the UK businesses they liked best.
“Although over the past years, the Home Office substantially increased the threshold of investment and applied a higher degree of scrutiny when assessing the source of funds, this category remained a fairly appealing visa option for high-net-worth migrant,” she said.
“For instance, the applicants were free to invest in a UK business they believed is best suited for their investment in terms of viability, returns and area the business operates in and without having to meet the English language requirement or be involved in the business receiving the funds. Closing this category will obviously make it more challenging for high-net-worth investors to obtain a visa for UK which will give them similar flexibility. However, in my opinion, the Home Office might have been under pressure to review this category,” Zhang said.
The Home Office makes it clear that it is going to get harder for foreign investors to gain settlement in the UK.
“Settlement will now be conditional on applicants executing an investment strategy that can show genuine job creation and other tangible economic impacts, passively holding UK investments will no longer be enough to obtain settlement,” according to the official statement.
Not all believe investor visas boosted UK economy
While it is true that some immigration professionals point out that the program had not significantly boosted the British economy despite several steps taken to make it more robust over the years, they did go as far as to call for the scraping of the program altogether.
UK immigration advisor Yana Tyler, a senior immigration consultant at Chan Neill Solicitors LLP, said the need was to make the program more beneficial to the British economy.
“Having assisted a number of applicants with their Tier 1 Investor visas throughout the last decade, I personally do not think that the UK economy significantly benefits from the scheme,” she said.
“It is a good idea to have such a scheme in place, however, the rules ought to be worded in a way that would benefit the UK economy.”
Impact on UK investment immigration industry
The UK government’s latest move is going to hit those investment immigration firms the hardest that have a sizeable chunk of investor visa clients; however, since many such as Zhang’s firm also deal with other type of clients, they are expected to survive the changes.
“The new change will have small impact on our business as we have managed to build a strong client base amongst private and corporate clients who rely on other visa categories,” Zhang said.
About what other options remain available to foreign investors, she added: “There are many visa categories that lead to settlement after three or five years, such as the Skilled Worker, Sole Representative, Innovator and Global Talent.
“We are also expecting later this year the introduction of two new visa categories which are Scale Up and High Potential Individual.”
Westmoreland added that the new rules would only apply to new applicants.
“The Tier 1 (Investor) route has now been removed for new entrants but those already on the route are still able to extend their visas and apply for settlement,” he said.
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