The UK’s New and Improved Tier 1 Visa Programme –
The UK recently ‘repaired’ its Tier 1 high net worth investor visa programme in a direct response to European lawmakers criticizing “golden visa” programmes in a number of countries, including the UK, for facilitating money laundering.
› Statement of Changes to the Tier 1 Investor Immigration Rules
- Going Forward … Applicants will now need to have held their investment funds of £2 million for a minimum period of two (2) years prior to the date of their application. Previously, this period had been three (3) months.
- Going Forward … Where the funds have not been held for a period of two (2) years, applicants will be compelled to demonstrate the source of their funds. Therefore, additional documentation will need to be provided as a due diligence exercise in order to verify the source of these funds.
Applicants will need to provide an affirmation from their UK bank to establish that the bank has carried out its relevant due diligence checks on the applicant and the source of their funds.
Previously, applicants were only required to show that they held a UK bank account. The Home Office will now be able to refuse a Tier 1 application where there are reasonable grounds to believe that funds have been obtained illegally or transferred to the United Kingdom unlawfully.
- Going Forward … Applicants will no longer be able to invest their funds in UK government bonds. The reason behind this change is that it has long been considered that such investments do not contribute any meaningful economic benefits to the UK.
- Going Forward … Applicants who wish to invest their funds in ‘active and trading UK companies’ will need to show that the company is genuinely trading and has a substantial presence in the United Kingdom.
Previously companies must have:
- had a registered office or head office in the UK;
- had a UK bank account showing current business transactions; and
- been subject to UK taxation.
However, the definition now states that an “active and trading UK registered company” must:
- be registered with Companies House in the UK;
- be registered with HM Revenue and Customs for corporation tax and PAYE;
- have accounts and a UK business bank account, both showing regular trading of its own goods or services; and
- have at least two UK-based employees who are not its directors.
The Home Office confirms that the intention of this rule change is to allow it to seek further assurances, only where an investment into a company gives particular cause for concern around its genuineness as an active and trading UK entity.
The Home Office further confirms that, where an entity has a publicly verifiable status as a major listed UK company, with nationally significant operations of the sort seen in blue chip companies, it is very unlikely to request further evidence to show that it is active and trading.
Going Forward … provided that: the listed company is registered with Companies House in the UK; it is not undertaking an activity which is prohibited under the Tier 1 (Investor) immigration rules, such as investing in property; and if it does not have employees itself, clearly has employees in other companies within the structure, it will be deemed to be a qualifying investment under the UK immigration rules.
› Impact of changes to the Tier 1 investor route
In short, only legitimate and genuine applicants who wish to secure residence in the UK on the basis of their investments need apply for the Investor Visa.
The Home Office’s concerns regarding the background of certain Tier 1 applicants and the source of their funds are meant to be addressed by these changes, all the while ensuring that the UK is protected against financial crime and that the investments will hopefully have a greater economic benefit to the UK.
› How will existing Tier 1 Investor visa holders be affected?
Tier 1 Investors, who were granted their Tier 1 Investor Visas before 29 March 2019, will not be affected by the Statement of Changes.
These applicants will still be able to reside in the UK under the prior rules, they will be able to apply for extension applications until 5 April 2023, and apply can for settlement applications until 5 April 2025 under the prior rules in place before 29 March 2019.
SOURCE: WealthBriefing (10 May 2019)