Abolishing Tier 1 Investor Visa
UK Golden Visa
4 Common Myths
On 17 February 2022 the Home Office abolished Tier 1 Investor visa over security concerns effective immediately.
Tier 1 Investor visa in the UK is commonly referred to as the UK Golden visa.
What is the UK Golden Visa?
Tier 1 Investor visa is popularly known as the UK Golden visa. Golden visa was originally associated with Portugal and a visa scheme, which allows for easy relocation of ultra high net worth individuals to Europe.
Why is the UK Golden Visa being Abolished? What are the Common 4 Myths?
There are at least 4 myths that surround Tier 1 Investor visa and application process. There are also valid money laundering concerns that need to be appropriately addressed. Let’s explore these 4 myths in a greater detail.
Myth 1: It is easy to launder money to the UK under the Tier 1 Investor visa arrangement.
High value transactions need to be initially cleared for anti-money laundering purposes and can be potentially suspicious. However, a number of checks have been introduced over the years to make it more and more difficult to utilise the Tier 1 Investor UK immigration route for money laundering purposes.
For instance, the new requirement is for the bank account to be opened in the UK before Tier 1 Investor visa application is submitted for processing.
Nevertheless, the Home Office is correct to open investigations in previous application processes where not sufficient checks were required to be carried out.
Myth 2: It is very easy to open a bank account in the UK and banks are competing for Tier 1 Investor visa business in the UK.
Perhaps, there is nothing more difficult than opening a bank account in the UK. Extensive checks need to be carried out before this type of business is considered.
Therefore, it is not surprising that a number of well-performing banks decided to forego the business. Tier 1 Investor visa applications, especially, if applicants are originating from Russia or China are considered very high risk not worth taking. Due to elaborate sanctions connected to war in Ukraine, regulated legal and financial professionals are no longer allowed to entertain Russian clients.
In order to be successful and not to create unnecessary financial, criminal and fraud risks, the financial institutions participating in Tier 1 Investor visa arrangements need to adequately protect themselves by investing in highly specialised teams that conduct continuing monitoring of banking relationships.
It is no wonder why some of the financial institutions would choose that the risk is too expensive and not worth taking and would not entertain Tier 1 Investor visa applicants.
Myth 3: It is all rosy for the Tier 1 Investor visa applicants in the UK.
The popular discourse is missing around the pains the wealthy applicants need to endure when applying for Tier 1 Investor visa in the UK.
It is true that a high level financial investment may create a bargaining power for Tier 1 Investor visa applicants. However, it is very limited as the requirements are strict and clear.
For instance, a wealthy applicant is not permitted to make just any investment in the UK in order to successfully secure a Tier 1 Investor visa application. They are also not free to choose in relation to what type of investment they will be making and how their investment is going to be used. In fact, often it will be explained to the applicant that the investment to be made for the purposes of securing a Tier 1 Investor visa is not at all profitable.
Sometimes, the applicants will come to terms with the fact that they need to make a substantial investment in order to satisfy their UK immigration requirements. However, the applicants may have to come to terms with a potential shock that their Tier 1 Investor visa may not be extended because the investments made did not meet the prescribed Home Office’s requirements.
Should this be the case, this most often means that the applicant and their family members may need to leave the UK and hope that they will be permitted to apply again and make it a better job next time round.
Myth 4: You are buying your British citizenship as you apply for a Tier 1 Investor visa.
It is often misconstrued that when one is applying for the Tier 1 Investor visa, one is to be granted British citizenship almost immediately and automatically.
The reality is that unlike some of the jurisdictions that offer citizenship by investment, British citizenship needs to be earned.
In citizenship by investment schemes run outside the UK, it is clear that the first and ultimate result is citizenship.
In the UK, the application process may consists of 5 different steps before the stage of applying for British citizenship is reached:
Step 1: application for limited leave to enter the UK;
Step 2: application to extend the limited leave to remain;
Step 3: application for the indefinite leave to remain;
Step 4: wait for 1 year after the indefinite leave to remain was granted;
Step 5: apply for British citizenship after 5 years of continuous residence in the UK and 12 months after the indefinite leave to remain was granted.
The initial successful application for Tier 1 Investor visa may put you on the path to successfully apply for British citizenship, but does not guarantee it.
In fact, a number of applications fail because they do not meet the continuous residence requirement.
Why does the UK need Tier 1 Investor visa and why should it not abolish it?
Media appears to vilify Tier 1 Investor visa UK immigration route as it appears to be a lucrative proposition to Russian and Chinese investors.
However, this UK immigration route is useful for other nationalities as well, such as US nationals just as one of the examples.
Tier 1 Investor visa creates a number of useful advantages for applicants:
- It is a specific UK immigration route devised to meet the needs of overseas investors who are ultra and high net worth individuals to make specified investments in the UK that may help achieve some of the government’s policy goals;
- It paves the route to live legally in the UK by making investments and not operating a business;
- It puts on the path of securing long-term residence in the UK and possibly, British citizenship.
UK Tier 1 Investor visa if abolished, would leave a considerable gap in UK immigration policy, such as:
- Create difficulties when bringing non-British parents to the UK because stringent requirements can not be met;
- Ability to join a British partner in the UK, when such partner cannot meet the financial requirement in order to bring an overseas partner to the UK;
- To join your studying child in the UK;
- Accelerate your UK immigration status as a student;
- As a consequence of Brexit, EU/EEA/Swiss nationals are no longer able to come and live in the UK without the appropriate visa.
Although, anti-money laundering concerns may be noteworthy and there is a brewing international pressure as the result of Russia’s continuous sights on the territory of Ukraine and Russia’s strong relationship with China, there is a strong case to be made for a UK visa based on investment that may help meet some of the UK’s financial goals.
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Saule Voluckyte, M.A.E.S, LL.B, FAIA
I have been working exclusively with UHNWI in Mayfair, London since January 2008. I built specialist knowledge and expertise required to serve ultra high net worth individuals investing, operating and relocating to the UK or Switzerland.
Within the industry, I am the single adviser who is able to traverse the different areas of expertise and bring a comprehensive approach across: global structuring, UK immigration, international taxation and FOREX to develop their global wealth strategy, while they build, grow and expand their wealth worldwide.
Previous experience as one of the senior advisors for the government, made me a go-to person when delicate and uncomfortable scenarios involving heads of state need to be handled with care and preserve privacy.
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