Hazar El-Chamaa and James d’Aquino comment on the story so far
The Tier 1 investor visa scheme, sometimes referred to as the "golden visa", is to be suspended as the Government sets about tackling the use of "illicit and corrupt" wealth to enter the UK.
Newspaper reports have suggested the route will be suspended from Friday 7 December and insider sources confirmed this. However, a written statement to the House of Commons made by the Immigration Minister Caroline Nokes on Thursday confirmed that reforms to the investor route will be introduced in the spring but provided no information on whether the route will be suspended in the meantime or not, leaving those currently making applications in limbo. It is expected that details on the suspension, together with the statement of changes, will be published “soon”.
Anticipated changes to the investor route will include more robust assessments of the applicant’s business interests. Checks by independent, regulated auditors will assess applicants' financial and business interests and check they have had control of the funds for at least two years. In addition, it is expected that the popular investment option of government bonds, which the Migration Advisory Committee has concluded offers little benefit to the UK economy, will be removed. Instead, shares will have to be bought in active and trading UK companies with a provision made for pooled investments, supported by the government, to back projects with a "clear economic benefit to the UK" such as supporting small and medium-sized businesses.
The move is said to form part of an ongoing crackdown by the Home Office on money laundering and proceeds of organised crime coming into the UK. However, the cases of wrongdoing that have made press headlines were in relation to visas issued before the reforms were introduced by the Home Office in 2015. Since then a requirement of the visa has been for applicants to first open a UK bank account. To do so, an applicant will have had to undergo all of the usual anti-money laundering and source of funds checks required by an FCA regulated bank or financial institution. It therefore seems at odds with this regulation for the Home Office to raise such significant concerns about whether these existing safeguards and obligations are sufficient and require suspension of the route altogether.
The Tier 1 investor route, in line with similar programmes offered by many other countries, has been successful in attracting high net worth individuals and their families to the UK for over 20 years. The current iteration has been in place for over 10 years with the total number of applicants coming to approximately 3000. Many of these individuals have contributed a great deal to the UK culturally and economically. Whilst this suspension is seemingly based on a few cases of wrongdoing, it must be remembered that such cases are few and far between We are hopeful that the Home Office will use this opportunity to review the existing safeguards and engage with key intermediaries about the reformed visa route to ensure that the UK remains a world-leading destination for investment and innovation.
If you are a Tier 1 investor visa holder or a HNW individual considering relocating to the UK please contact Hazar El-Chamaa (immigration partner) and James d’Aquino (private client partner) of our private wealth team.