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Published 10 December 2018
The proposed reform is a bid by the Home Office to tackle organised crime and money laundering in the UK, in an effort to sift out genuine investors from rich individuals looking to launder unlawful wealth. It has also been recognised that most investors under the scheme were providing little economic benefit to British citizens as they were effectively loaning the government money in the form of gilts, to qualify for permanent residency.
The new rules to be implemented will place increased restrictions on who can apply for the Tier 1 (Investor) visa, and how money can be invested to qualify under the scheme. It is expected that the Home Office will require applicants to provide comprehensive audits of their financial and business interests, and show that they have had control of the £2 million of investment funds for at least two years before making the application.
It can therefore also be expected that what qualifies as an investment under the scheme will be subject to reformation when the new rules are introduced in February, although no announcement has been made so far. The reform is expected to provide pooled investments which will support small and medium sized businesses and provide a “clear economic benefit to the UK”.
Shahjahan Ali, partner and Head of Immigration at DAC Beachcroft, comments “For a long while, the Tier 1 (Investor) visa was seen as the darling of the UK’s immigration system. Introduced in 2008 as part of a raft of changes collectively known as the Points Based System, and succeeding the previous Investor visa regulations, the Tier 1 (Investor) visa allowed those with significant capital available for investment to come to the UK and gradually settle. The message was one of promoting inward investment and, given the economic climate at the time, very few (if any) argued against having such a visa route. However, as the rhetoric on net migration statistics has ramped up, even the Tier 1 (Investor) visa has ceased to be immune to change.”
Ali continues “Many people were attracted by the Tier 1 (Investor) visa category, particularly those who wanted their children to benefit from the world-class education that the UK has to offer. And in return, they were prepared to invest significant amounts of money into the UK. Unlike the student visa, the Tier 1 (Investor) visa allowed the parents to remain in the UK and stay close to their children for significant periods, as well as engaging in economic activity if they chose to.
“The impact or focus of further changes is likely to manifest as a higher refusal rate being applied by the Home Office, and similarly to the crackdown on Tier 1 (Entrepreneur), this is likely to catch many genuine applicants who are either going to have their applications refused, or will have to wait significantly longer for their applications to be processed.”
For more information on the impacts, or discuss this in more detail, please contact Shahjahan Ali, partner and Head of Immigration at DAC Beachcroft on +44(0)117 918 2677, or email email@example.com.
Bristol, London - Walbrook
+44 (0)117 918 2677
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