IMPACT – MEDIUM

What is the change? Effective immediately, the U.K. government has suspended the Tier 1 (Investor) Visa category for new applications due to concerns about corruption. The visa allows foreign nationals to apply for visas and is a path to permanent residency in the U.K. if they are able to meet investment thresholds and criteria. The route will remain open for extension applications.

What does the change mean? The visas will be suspended until 2019, when stricter rules will be introduced to prevent fraud, including audits of applicants’ business investments and evidence that they have controlled a minimum of £2 million in funds for at least two years. Additionally, their investment under the Tier 1 Visa must be in an active U.K. company; investment in government bonds will no longer be considered.

  • Implementation time frame: Immediate.
  • Visas/permits affected: Tier 1 (Investor) visas under the points-based system.
  • Business impact: Foreign investors intending to apply for Tier 1 (Investor) visas will need to wait until the program reopens and should anticipate having to provide additional evidence that their business investments will benefit the U.K. economy.
  • Next steps: The Home Office is expected to release new guidelines at the beginning of 2019. The rules will require independent auditors to review applicants’ business investments.  

Background: The Tier 1 (Investor) program was introduced in 2008. In 2014, following a Migration Advisory Committee report which found that the route provided little economic benefit to the U.K. labor force, the investment minimum was doubled from £1 million to £2 million. Until now, applicants could meet the investment thresholds through holdings in a regulated financial institution in the U.K. or overseas for 90 days before the application, or if the funds were already invested in the UK, through holdings in U.K. government bonds or share capital or loan capital in active and trading companies registered in the U.K.

Analysis & Comments: Foreign nationals will not be able to apply under the Tier 1 (Investor) Visa route until further notice from the Home Office. Applicants intending to apply when the program reopens should anticipate greater scrutiny, stricter investment criteria, and an audit of their businesses and investments.

Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.