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Expat Briefing Editorial Team
20 May, 2016
For a variety of reasons, London is not usually to be found gracing the top end of the numerous league tables which attempt to measure the most attractive location for expats in terms of quality of life. The weather is bad; the cost of living is high; the cost of property is even higher; the transport system is expensive and overcrowded; the public health service is creaking at the seams; and crime is higher than in many peer nations. Yet, as recent figures show, wealthy foreigners continue to beat a path to its door. And, with a special investor visa in place, the UK is only too happy to let them in.
London – A Haven for the Super-Rich
According to a recent study by Wealth Insight, which provides data on high net worth individuals that, in the firm's own words, "we would otherwise not have visibility of," London is now home to 4,400 of the world's "super-rich" – individuals with a net worth in excess of USD30m (GBP20.5m) – more than any other city, including the financial powerhouses of New York, Tokyo, Hong Kong and Singapore. Indeed, London has pulled out something of a healthy lead (depending on which way you look at it!) between itself and its closest rival, Tokyo, in wealth stakes. There are now 25 percent more super-rich residents of London than Tokyo whereas last year, the gap was 22 percent.
Surprisingly, given the rapidly rising levels of wealth in China, we don't see a Chinese city occupying one of the top spots in the league table. Perhaps this is because significant numbers of wealthy Chinese people seem to prefer London to Beijing, Shanghai or Shenzhen. According to international law firm Pinsent Masons, there was a 25 percent jump in the number of investor visas issued to foreigners in 2013. Of the 530 visas issued that year, 32 percent for Chinese applicants.
However, there has been a sharp decline in the total number of investor visas issued since the minimum investment threshold was doubled to GBP2m at the end of 2014. Figures published by Smith Stone Walters, a law firm specializing in immigration issues, show that only 136 individuals applied for entry into the UK via the investor visa route in the nine months to September 2015, compared with 780 in the corresponding period in 2014. China's slowing economy has also taken its toll on investor visa numbers, according to Smith Stone Walters, with the first six months of 2015 seeing a 93 percent decrease in applications from Chinese nationals compared with the first half of 2015.
Nevertheless, it seems likely that the investor visa, which was introduced in 2008, has helped to boost the numbers of wealthy foreigners living in London, as well as other parts of the United Kingdom. And if you've got at least a couple of million burning a hole in your pocket, here's a summary of how to obtain one.
UK Investor Visa: A Summary
The UK investor visa is for people from outside the European Economic Area (the European Union plus Iceland, Liechtenstein and Norway) and Switzerland. Seemingly, only those from North Korea cannot apply!
As its name suggests the investor visa is aimed at high-net-worth individuals. Applicants must have at least GBP2 million available to invest in UK government bonds, share capital or loan capital in active and trading UK registered companies. However, investor visa holders cannot invest in companies mainly engaged in property investment, property management or property investment. They also can't work as a professional sports person or coach, and cannot receive public funds.
Other eligibility requirements include that applicants are at least 16 years old, and can prove that they own the money they intend to invest, or their husband, wife, unmarried or same-sex partner does. Funds must be deposited in at least one regulated financial institution and "disposable" i.e. free to spend. The money can be either in the UK or abroad at the time the application is made.
Evidence that the applicant has the required investment will need to be presented in the application process. If this is to be the applicant's money, they must show:
how much money they have and where it's being held
where the money came from if they haven't had the money for at least 3 months (e.g. they inherited it from a relative)
that the money can be transferred to the UK and converted to sterling (if it's not already in the UK)
If the money belongs to a partner, the applicant will need to provide the following documents:
a certificate of marriage or civil partnership, or in the case of unmarried or same-sex relationships, proof that the relationship is long-term (at least 2 years)
a statement from their partner confirming that they will allow the applicant to control the funds in the UK
a letter from a legal adviser stating that the declaration is valid
However, additional documents may be required depending on the applicant's circumstances.
Any documents that are not in English or Welsh will have to be accompanied by a certified translation.
Students with financial sponsorship may also be eligible for an investor visa if they are already in the UK and are:
a Tier 4 (General) visa holder
a student nurse
studying, writing up a thesis or re-sitting an exam
a postgraduate doctor or dentist
an overseas qualified nurse or midwife
a student sabbatical officer
However, applicants falling into these categories must have unconditional agreement in writing from their financial sponsor to re-enter or stay in the UK if their course fees and living costs were paid by either a government or an international scholarship agency.
Those applying for an investor visa must do so online. However, applicants will need to have their fingerprints and photograph (known as 'biometric information') taken at a visa application center as part of the application process.
An investor visa entitles the applicant to remain in the UK for a maximum period of three years and four months. It is possible for a visa to be extended for an additional two years, but different rules apply depending on when the first successful application was made.
For visas applied for prior to November 6, 2014, the individual must meet the following requirements:
have at least GBP1 million under their control in the UK
have invested at least GBP750,000 (or 75 percent) of that in UK government bonds, share capital or loan capital in active UK companies
invested this sum within 3 months of the 'investor start date'
This sum should include the GBP750,000 (or more) investment and GBP250,000 (or the balance needed) to bring it up to at least GBP1 million. These funds can be either the applicant or their partner's money, or in the form of a loan from a UK-regulated financial institution provided that the minimum GBP2 million asset threshold is maintained.
A successful visa application made after November 6, 2014 can be extended if the applicant has at least GBP2m under their control, has invested it in UK government bonds, share capital or loan capital in active UK companies and has invested it within three months of the visa start date.
An investor visa holder can apply to settle in the UK after two years if they invest GBP10 million, and after three years if they invest GBP5 million.
Dependents, defined as a husband, wife or child under 18, can also accompany the investor visa holder and enter the UK. However, they must also undergo an online application and have their biometric information taken at a visa application center.
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