On 17th February 2022, Home Secretary Priti Patel announced abruptly that she had closed the Investor visa category to new entrants. She enthusiastically tweeted, “I’ve closed the Tier 1 Investor visa with immediate effect following our review of all those granted. This is just the start of our renewed crackdown on fraud and illicit finance.”
The move came as quite a shock to many of us UK immigration practitioners due to how quickly it happened. Usually, changes are announced 21 days before they occur but the shock and awe approach was deliberate due to concerns from the Government that announcing an end to the category would lead to an influx of applications. The Home Secretary’s wording regarding a review of existing visa holders was particularly concerning as a large number of international investor clients work extremely hard to comply with the Home Office’s already stringent rules, with a genuine wish to invest in the UK.
The Investor visa category first emerged in 1994. Applicants were required to have a minimum investment of £1 million, with at least £750,000 to be invested in UK government bonds or active and trading UK-registered companies. The remaining £250,000 could be held in a UK bank account or used to purchase UK-based assets such as property.
Over the years the requirements were adapted to include the ability to access loan facilities if the applicant had £2 million in personal wealth, fast-track access to Indefinite Leave Remain, depending on higher levels of investment and in 2014, an attempt was made to make the route more profitable to the UK by raising the minimum investment threshold from £1 million to £2 million, with an added requirement that 100 percent of the funds be invested. Loan-based investments were also disallowed.
Between then and the changes last week, there have been concerns about the potential to abuse the visa category, with an increase in applications from Politically Exposed Persons (PEPs) and funds acquired illegally being used for the application, thus concerns of money laundering through the UK immigration system.
While these concerns are legitimate and there are no doubt individuals who have attempted to use the system to their benefit, there are also a significant number of investors who are genuine, who have only looked to boost the UK economy and are attracted to the UK and all it can offer for their families including top schools and a way of life. For those, the change is disappointing.
Many clients have already jumped through the numerous compliance hurdles, including criminal record checks, evidencing the source of funds, demonstrating these funds have been held for two years, ensuring they already had funds in a UK bank account, the opening of which should have triggered a high level of “know your client” due diligence as an additional level of protection to the Government.
For these clients and their families who are already in the UK on the visa route, it will be possible to extend their status for a further two years, apply for settlement, or for their family members to join them in the UK, however with potentially more rigid conditions.
The Government have said that a new version of the category could be introduced but following the replacement of the Entrepreneur visa with the Innovator/ Start-up schemes, which have not been as popular as their predecessor, it remains to be seen how the Government will attract investors, particularly those who may have been going through the expensive steps of the initial process before the category was so brutally shut without notice.
If you are an existing Investor visa holder and have a query about your status, or if you wish to receive advice about alternative visa routes following the closure, you can contact Rhona at [email protected] for further guidance.