On 29 March 2019, the Home Office released its guidance on applications for UK Tier 1 (investor) Visas. The guidance follows the Home Office statement of changes setting out its planned amendments to UK immigration Rules. The statement, released on the 7 March, contained the changes to the Tier 1 (investor) Visa.
The best London immigration solicitors awaited the statement of changes and guidance with interest, as back in December 2018 the Home Office announced the scrapping of the Investor Visa. Within a matter of days, the Home Office had backtracked and said the Tier 1 (investor) Visa route would remain open but changes to the visa category were planned. These were announced in the March 2019: Home Office statement of changes, together with announcements about the new Start-up visa and innovator visa. The new guidance has finally been rolled out.
The changes to the Investor Visa came into effect on 29 March 2019. The top London immigration solicitors advise that the main changes to the Tier 1 (investor) Visa are mainly aimed at ensuring that the investor funds are “clean”, and more emphasis is placed on the value of the benefit of the investment into the UK economy.
The changes to the Tier 1 (investor) Visa
The best London immigration solicitors advise that the major changes to the Investor Visa include:
• A requirement that the source of the investment funds has to be disclosed where the funds have been held for less than two years prior to the date of the visa application (an increase from the previous 90 days rule), ¬or the applicant has to be able to demonstrate that the investment funds have been held by him or her for two years or more; and
• A requirement that the UK bank confirms they have carried out due diligence checks and “Know Your Customer” enquiries prior to the applicant being authorised to open a UK bank account; and
• The removal of UK government bonds as an investment option under the Investor Visa; and
• Increasing the investment options to add pooled investments. These pooled investments receive funding from a UK or devolved government department or its agencies; and
• Tightening the definition of “active and trading” UK companies for the purposes of the investment. Evidence will be required that a company into which the applicant wants to invest the £2 million has a substantial presence in the UK. The best London immigration solicitors advise this includes the company having to be registered with Companies House and HMRC for tax purposes. Furthermore, the company must have at least two UK-based employees who are not appointed as company directors; and
• The “price of the investment” is defined as the price actually paid for investments rather than their face value. This is to avoid an applicant not actually investing the £2 million in the UK.
What are the basics of the Tier 1 (investor) visa?
The best London immigration solicitors advise that the primary criteria for an application for an Investor Visa is the ability to invest at least £2 million in qualifying UK investments, for example, share capital or loan capital in active and trading UK companies.
Home Office rules continue to state that investment in property or management of property is not classified as “investment” for the purposes of a Tier 1 (investor) Visa.
The Investor Visa was soundly criticised in the media, with it being said that for a price or an investment of £2 million, an individual could settle in the UK by applying for Indefinite Leave to Remain in the UK after five years. However, some said money pays, as with an investment of at least £5 million, the period before being able to apply for settlement reduces to three years. With an investment of at least £10 million, the period before being able to apply for settlement reduces to two years. The Home Office changes to the immigration Rules in relation to Investor Visas do not address the criticism that the Investor Visa is a means of buying entry and settlement. Furthermore, investors have waited for months for clarification of the changes to the Investor Visa.
The top London immigration solicitors advise that there are transitional arrangements for investors who applied for the Investor Visa before the 29 March 2019. The Home Office intention is that those investors are not adversely affected by the new immigration Rules.
The transitional rules say the current Investor Visa rules continue to apply to existing investors until the 5 April 2023 for extension applications and the 5 April 2025 for settlement applications.
What will the Tier 1 (investor) Visa changes mean to investors?
The best London immigration solicitors consider that the Home Office changes to the Tier 1 (investor) Visa will make the visa application process more complicated. In December 2018, when the Home Office announced that it would be changing the rules on the application process to apply for an Investor Visa, it planned to introduce an audit of an applicant's financial and business interests. The March 2019 statement of changes and new immigration Rules do not impose the heavy burden of an audit process on applicants, but the changes do add to the paperwork and documents needed to successfully apply for a Tier 1 (investor) Visa.
In addition, the removal of the opportunity to invest the £2 million investor funds in UK government bonds as an eligible investment may make the Tier 1 (investor) Visa less attractive to investors. That is because the use of government bonds was the most commonly used investment under pre March 2019 visa rules.