As we head closer to Brexit, we continue to see appetite from global high net worth individuals (HNWI) for investment migration solutions within the UK. The UK’s Tier 1 categories have proved resilient against Brexit uncertainties and continue to fare well.
The number of Tier 1 Investor Visas granted was up 11% from last year with HNWI investing a minimum of £2 million in return for residency. This is significant as, unlike programmes in Malta or Cyprus, the UK does not provide a fast route to EU citizenship and the statistics show that the UK remains a choice destination in itself, rather than a stepping stone to broader movement. Lifestyle, stability, location and in particular education all contribute to the UK’s growing popularity amongst global investors.
As global investor migration solutions go, the UK has one of the most stringent programmes. The investment amount is comparatively high and there are limited choices available as to how the minimum £2 million is invested (they must invest this for five years in the UK by way of government bonds, share capital or loan capital in UK registered companies), and there is no option to qualify for the visa through a property investment. Those who invest in property in the UK do so over and above their visa requirements. An applicant cannot apply for this visa without first opening a UK bank account, with all the due diligence processing that entails. The UK also expects investors and their families to commit significant time to the UK. And in order to be granted Indefinite Leave to Remain (ILR), they must not spend more than 180 days per year outside the UK. There is also the Immigration Health Surcharge. Legal advisors need to be aware that this may double later this year and remain applicable even to those who hold private medical insurance. Significantly more onerous requirements apply to those seeking citizenship after 5 (or in most cases 6) years in the UK.
It is right to question legitimacy and to demand the highest regulatory standards within the investor migration industry, but some of the negative headlines we read can be misleading. Public debate in the UK around the Tier 1 Investor visa has intensified following the Salisbury incident. A review of the visa is in place but the scope is unknown, although parliamentarians have expressed particular concern about visas granted before changes saw applicants having to open a UK bank account prior to applying.
In the UK, the Home Office issued their immigration statistics last week and the total number of non-British nationals living in Great Britain is 6.2 million, up 4%. Proof that 21st-century residency and citizenship has become a complex phenomenon, with many permutations and expressions now possible. Set in that context, investor volumes are relatively low with approximately 300 applicants each year. However, Oxford University research shows that “These programmes have the potential to advance two important policy objectives … first, by attracting new financial and human capital to support government budgets and developmental agendas” and second, “cultivating economically engaged citizen entrepreneurs who can drive economic growth and innovation”.
As the UK looks to new trade partnerships and continues its drive to attract innovators and tech entrepreneurs into the UK, it is hoped that the review works in synchronisation with the governments mission to attract foreign direct investment (FDI) into the UK, which has fallen by 92% since 2016. In this new landscape, investor migration should be seen as part and parcel of that FDI drive, and perhaps the review would do well to focus on how best to apply and divert the monies invested in the UK for public benefit, as well as ensuring the highest regulatory standards are in place.
Nadine Goldfoot is a partner at Fragomen and Member of the Governing Board, Investment Migration Council