UK Seeks Greater Returns From Investor Visas

By Editorial 05 March, 2014

A public body that advises the UK Government on immigration has set out proposals for reform of the investor visa program, including a higher minimum threshold, the tightening of permissible investment instruments, and a limitation to the number of "premium route" visas offered, which it proposes should be auctioned to the highest bidders.

Since 1994, Tier 1 (Investor) Visas have offered indefinite leave to remain in the UK and a pathway to British citizenship in return for a five-year investment, 75 percent of which must be in the form of UK Government gilts, or loan or share capital in UK-registered trading companies. The minimum amount has always been GBP1m (USD1.67m), although in 2011 two higher investment thresholds, of GBP5m and GBP10m, were also introduced. These provide for settlement within three years and two years rather than five years, respectively, and for citizenship within five years rather than six years. In all instances, applicants must be resident in the UK for 185 days each year.

In the year ending mid-2009, around 100 out-of-country Tier 1 (Investor) Visas were issued, rising to around 500 a year in 2013. However, the Migration Advisory Committee says that it is unclear to what extent the UK taxpayer currently benefits from the scheme. Introducing a new report, Committee chairman Sir David Metcalfe said some "straightforward reforms" would make it more likely to be beneficial to the UK.

The report recommends that the minimum investment threshold of GBP1m should be raised to GBP2m, and that investors should be required to make more meaningful investments. Currently, many investors seeking residence in the UK will do so through gilts (fixed-interest loan securities issued by the UK government), which are preferred because they are seen to involve less risk. The Committee suggests that investors could be encouraged to invest in private companies, venture capital schemes, or property development.

Further, a limited number of around 100 "premium route" visas should be made available through a single sealed bid. The minimum price should be GBP2.5m, of which the amount above GBP2m would take the form of a donation to a "good causes fund." Applicants who pass due diligence checks would be eligible for settlement within two years, and would have to reside in the UK for just 90 days a year under this program.

Metcalfe also warned against a "race to the bottom" by matching special offers recently introduced in other countries. In Europe, Spain and Portugal recently introduced "Golden Visa" schemes for non-EU citizens who invest in property. Visas in return for investment are also available in Cyprus, Greece, and Latvia. Malta, meanwhile, recently announced that it would sell citizenship to investors.

A Home Office spokesman said the Government would "carefully consider [the report's] recommendations." However, the Government has previously rejected the idea of auctioning visas.

Tags: Investment | Interest | United Kingdom | Venture Capital | Expats | Visas And Passports | Invest |


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