After the shambolic suspension and reinstating of the UK Tier-1 Investor visa in just a few days in December 2018, Britain’s Home Office has introduced stricter rules for the investment immigration program.
The new rules are apparently aimed at deterring Russian investors after the controversial Skripal nerve agent attack incident.
New UK Tier 1 Investor Visa Rules
Investors must have investment funds under their control for at least two years as opposed to the earlier requirement of 90 days.
If funds have not been held for two years, then the application must include proof of source of funds.
UK banks will have to carry out comprehensive due diligence and Know-Your-Client checks before allowing the applicant to open a bank account to make their investments. Banks will have to confirm the completion of such checks and processes in a formal statement.
Government bonds are no longer an eligible asset class for qualifying for the UK Tier 1 Investor visa program.
The program requires investments into ‘active and trading’ companies in the UK Fulfilling this requirement now includes incorporation and tax registration in the UK and employment of two UK-based employees in non-director positions.
Demand from Russian investors had plummeted before the introduction of these rules. From 46 investor visas in 2017, only 29 Russians qualified for this program in 2018, the lowest number since the program’s introduction in 2008.
Critics Question Absence of Wealth Audits
The new rules drew criticism over the lack of wealth audits of applicants granted investor visas prior to 2015.
Setting up an independent body to assess the source of wealth of around 3,000 Tier 1 investor who applied before 2015 is considered an important step in securing the program from money laundering risks.
The program had virtually zero checks on the source of income between 2008 and 2015. This means the country has little information on the legitimacy of the £3 billion brought into the UK by wealthy Russian and Chinese investors during that time.
The Home Office indicated that the wealth audit issue was still being considered. If implemented, it would be the first instance of a government applying new rules retrospectively on investment immigrants.
Emphasis on Startups and Entrepreneur Visas
Underlining the government’s intention to shift emphasis to startups and entrepreneurs over investors, the Home Office relaxed conditions of entry for its other two Tier 1 visa categories.
Formerly the graduate entrepreneur visa, the Startup Visa has been expanded to include all foreigners seeking to start a business and not just recent graduates. Applicants will now have two years to set up a successful business in the UK, as opposed to the earlier requirement of one year.
The Tier 1 Entrepreneur visa, now called the Innovator Visa, is open to experienced entrepreneurs with minimum investment requirement cut from £200,000 to just £50,000.
Further, applicants will now have their business plans assessed by professional bodies and business experts instead of Home Office officials.