UK Investor Visa Suspended

The UK’s Tier 1 Investor Visa looks set for positive change after the Home Office announced it is suspending the visa programme from today pending review.

The UK programme has been criticised for being one of the most liberal in the world when it comes to due diligence on applicants. It led to accusations of the programme being used for illicit purposes and changes introduced several years ago (before which applicants needed to be of good character and hold a UK bank account), do not appear to have addressed this issue. Immigration Minister Caroline Nokes announced the suspension stating “We will not tolerate people who do not play by the rules and seek to abuse the system. That is why I am bringing forward these new measures which will make sure that only genuine investors, who intend to support UK businesses, can benefit from our immigration system.”

The Tier 1 Investor Visa has been in existence for over 10 years and has in this time period along with the Tier 1 Entrepreneur Visa “contributed” more than £6.5 billion to the UK economy. However exactly what this contribution to the economy is, is questionable. Tier 1 Investors can invest in public equities or government bonds. Buying equities has no direct effect on the UK economy and loaning money to a government that can meet its debt funding obligations irrespective has little value. As for the Entrepreneur Visa there is no data to highlight just how effective any businesses set up by such entrepreneurs have been in helping the UK economy. The government does not appear to track or monitor such benefits.

The Home Office is intending to carry out a full review of the programme. La Vida welcomes this and the UK government would do well to look at residency and citizenship programmes elsewhere in the world that either have a direct effect on the economy (for example the Ireland Immigrant Investor or the US EB5 Visa) or those that channel funds directly into government as contributions (for example St. Kitts or Dominica) to be allocated for business or infrastructure projects.

With the UK being one of the most desirable residencies or citizenships in the world the UK government should take this opportunity to build a world class programme that sets the standards for due diligence and economic benefit. We hope to bring positive news on this to our clients following the government review.

While applicants already in progress are not affected, the action by the UK government, with just 24 hours notice, demonstrates how any government can change a programme at short notice.