By Uglobal Staff
Investors are still showing a strong interest in immigrating to the United Kingdom despite the upcoming Brexit, which has England on a course to leave the European Union by 2019 after a historic referendum last year. The event might put an end to the free movement and ability to work and live in any EU county for British citizens.
There has been a steady quarterly increase of Tier 1 Investor visa applicants since last June, when the vote took place, according to government statistics. The number of applications has grown from 190 to 240, a 26 percent increase from 2015 to 2016. The first quarter of 2017 set a record high in quarterly applicants with 80 applications under the Tier 1 Investor category.
“Actually, Brexit has resulted in more queries regarding investment visas. UK will always be an attractive choice for investors,” said Mona Chawla, founding member of Clarus Law Group, a UK and US based law firm focusing on business and family immigration practices.
BREXIT AND THE UK INVESTMENT IMMIGRATION MARKET
Despite the announcement of the UK vote on June 23, 2016, the Tier 1 Investor market remains optimistic. Since the minimum amount of investment doubled in November 2014, the number of Tier 1 Investor applications dove from 510 of the last quarter of 2014 to 39 of the first quarter of 2015. The market stayed stagnant for 1,5 year with about 55 investors applying quarterly until the referendum, when applicants started to gradually increase, bringing the market back to a 47.5 percent growth in the first quarter of 2017 compared with the same quarter the year before.
APPLICANTS OF THE UK PROGRAM
Historically, Chinese and Russians have been the largest groups of investors the UK Tier 1 Investor visa program. Government data still shows Chinese investors as the largest group of Tier 1 investors even after the referendum. However, with Brexit plans under way, a new group of individuals -- EAA (European Economic Area) nationals -- whose rights of free movement and their ability to stay in United Kingdom could be jeopardized are expected to become a new booming market for the UK investment immigration.
“There will be numerous EU nationals who wish to live in the United Kingdom once immigration control is imposed in March 2019, unless the transitional provisions provide for a longer period of transition,” said Philip Trott, Partner and Head of Immigration of Bates Wells Braithwaite, a London-based law firm providing consultancy and legal services. “It is likely that EU nationals with adequate funds will find this (investment immigration) an easy route to obtaining permissions to remain in the UK.”
Philip Barth, Counsel and Head of Immigration at Withers Worldwide, an international law firm with offices in three continents, agreed.
“We are already advising EEA nationals on investment visas,” he said.
For nationals from outside EEA countries, Brexit doesn’t seem to have impacted their interest in seeking settlement in the UK through investment.
“Most of our Tier 1 clients are young families and they come to seek for education opportunities for their kids…Brexit is just a political situation,” said Angelina Yap, Client Director of Church House’s investment service for wealthy Tier 1 visa applicants.
THE UK TIER 1 INVESTOR VISA ROUTE AND RECENT POLICY CHANGES
Under the Tier 1 Investor route, individuals from countries outside EAA and Switzerland, who invest £2 million into UK government bonds, share capital or loan capital in registered UK companies, would be able to get a visa and are able to apply for residency (also called “indefinite leave to remain” or ILR) after 5 years. After another year, they would be eligible to apply for UK citizenship.
The investor immigration program also offers premium routes which grant applicants the eligibility to apply for permanent residency after 3 years with a £5 million investment and after 2 years with a £10 million investment. It is recommended by the UK Home Office that investors start their application process 3 months before their arrival and it typically takes about 3 weeks for the Home Office to make a decision.
The significant change of the Tier 1 Investor Visa route, which doubled the minimum investment threshold from £1 million to £2 million, followed recommendations by Migration Advisory Committee (MAC), an independent body that provides migration advises to the UK government.
“The absence of direct benefit, and limited benefit associated with indirect expenditure, suggested that on current terms the Tier 1 (Investor) visa is underpriced and the UK could look to derive greater value from the initial investment,” wrote MAC in its report. Other major revisions included the introduction of criminal check and the requirements of a UK bank account for investment.
The new policy caused a sharp decrease of applicants with an 85.6 percent reduction in the first quarter of 2015.
THE UK TIER 1 ENTREPRENEUR VISA ROUTE
For foreign entrepreneur investors who want to manage the business they invest in, the Tier 1 Entrepreneur visa route is an option. Applicants from countries other than EEA and Switzerland with provable capital of at least £50,000 will be able to apply for a Tier 1 Entrepreneur visa by starting a new business or investing in an already established business in the UK.
Applicants must also meet the minimum English language proficiency requirement and pass an entrepreneur test that includes a comprehensive business plan and evidence of source of funds. The recommended time period to prepare for this visa is 3 months and it normally takes 3 weeks for applicants to get a decision.
THE INVESTOR VISA ROUTE VS THE ENTREPRENEUR VISA ROUTE: WHICH SHOULD I CHOOSE?
In addition to a current passport and criminal record certificate, applicants on the Investor visa route only need to provide evidence of the £2 million investment funds to prove accessibility. Entrepreneur Visa applicants will have to go through a scrutiny by the UK Border Agency that requires an extensive business plan, market research as well as a detailed CV describing previous education and business experience.
After the filing of petition, the two routes render different challenges to investors. A significant amount of capital from Investor Visa applicants will be tied up in government bonds or registered companies for several years. Entrepreneur visa applicants must keep compliant with the regulations after the filing stage. This includes running the business, creating two jobs or more and assuming duties and liabilities of a director’s role.
Trott suggested that investors carefully evaluate their situation to make an informative decision about which visa would be most beneficial for themselves and their families.
“The program (Tier 1 Investor) permits easy access, from a documentary perspective, to gaining ILR as there is no English language requirement,” he said. “However, the Tier 1 Entrepreneur visa is very document heavy and require the applicant to actually start running a business and employ a minimum of two individuals who are settled. A detailed analysis of the individual client’s situation is required to actually make a merit based decision.”