The Tier 1 (investor) visa, often called a “golden visa”, offers residency to those investing £2m or more in the UK, and allows their families to join them. Holders of these visas can then apply for permanent residency in the UK, at a speed depending on how much they invest. A £2m investment allows an application within five years, shortened to three years with £5m or two years if £10m is invested. But the route to residency is now being closed with immediate effect, with the government saying it “failed to deliver for the UK people and gave opportunities for corrupt elites to access the UK”.
-The timeline of the closure –
UK’s Tier 1 (Investor) visa scheme closed to new applications due to security concerns on 17 February 2022. Applications for leave to remain as an existing Investor migrant must be made before 17 February 2026, and applications for indefinite leave before 17 February 2028. Pending applications for Tier 1 (Investor) visas are unaffected.
History of the ‘Golden visa’ route:
October 1994: Immigrant Investor scheme launched, with a minimum threshold of £1 million.
June 2008: Tier 1 (Investor) introduced.
February 2014: Migration Advisory Committee review finds limited economic benefit to Tier 1 (Investor) and makes various recommendations for adjustments.
November 2014: minimum investment raised to £2 million; caseworkers are empowered to refuse applications if there are reasonable grounds to suspect that the money was obtained unlawfully.
April 2015: investors required to open UK bank account, with associated money laundering checks, before applying.
March 2019: government bonds removed as qualifying investment.
February 2022: route closed to new applicants with immediate effect.
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-The legality of the closure
The Investor visa route was closed to all new applicants with “immediate effect” by the Home Office citing “security concerns” and “wider corruption”. Normally such action would require a notice period of 21 days. The notes provided by the Government about the closure say that giving the usual 21 days’ notice would have triggered a ‘closing down sale’ effect (ie a rush by applicants to apply before closure). The home office argued that some of these hasty applications would be from “individuals that represent some degree of potential harm”. The action should be viewed in the context of the build-up to the Russian invasion of Ukraine when there was increased pressure on the UK authorities to deal with the problem of ‘dirty’ Russian money in the UK. The route has been controversial throughout its lifetime however and has long been suspected of providing a route through which illegally or unethically obtained wealth is laundered in the UK. Around half of all Investor visas ever issued are reportedly under review. The explanatory notes on the actions say that, Russians aside, “it remains an ongoing concern that the route is vulnerable to exploitation by those marketing complex investment arrangements in order to facilitate entry under the route without making any genuine investments in the UK”. Last year, the Court of Appeal held that a scheme for effectively loaning migrants the money needed to secure an Investor visa was within the rules.
UK Home Secretary Priti Patel was been accused of ‘undermining democratic procedures of accountability and any sense of legal certainty, stability, and predictability’ by an influential group of barristers, lawyers, and immigration advocates after she closed a visa route without warning. A letter from the Immigration Law Practitioners’ Association (ILPA) described how members were blindsided by the decision. The organisation received no advanced notice and there was no formal public consultation regarding these changes. While the body accepts concerns that the route is being used to move illicitly obtained wealth into the UK, it criticised what it called ‘reactionary rule-making, undertaken without consultation and in contravention of convention’ and claimed the Home Secretary’s actions undermine the possibility for adequate Parliamentary scrutiny. Several ILPA members, which includes immigration solicitors, barristers, academics and NGOs have clients ‘unconnected to any security concerns or abuse’ who were in the process of applying for one of the visas, for which there is no similar alternative.
“There is a real human impact in the closure of any route, particularly when there is no alternative,” explained the letter.
ILPA member Yash Dubal, Director of A Y & J Solicitors said: “There is wide support for the letter, mainly to respect the democratic process. Genuine investors who planned their move many months in advance now face a hard stop through no fault of their own. The decision to close the route without any consultation, warning or notice is autocratic.”
The ILPA is now calling on Patel for 21 days grace for applications to be submitted and processed ‘to avoid any unfairness to applicants who were close to submission at the time of the route’s closure’. It also wants assurances that cases currently under consideration will be assessed fairly and that future substantive changes follow protocol and are announced at least 21 days before they take effect.
-The impact on existing visa holders –
This route is now closed to new applicants. Individuals who already have entry clearance, leave to enter or remain as a Tier 1 (Investor) Migrant may apply under these rules to extend their stay or for indefinite leave to remain. The changes preserve the ability of those who already have leave to enter or remain as a Tier 1 (Investor) Migrant to extend their stay in the route, including an applicant’s ability to make an application for entry clearance outside the UK if they have held leave as a Tier 1 (Investor) Migrant in the 12 month period preceding the date of application, and to apply for settlement.
-The impact on Immigration –
Overall the closure will have a negligible impact on UK immigration. There were only 835 Investor Visas issued in 2021. 630 in 2020 and 911 in 2019. It was not a widely used visa, due to the amount of money needed to obtain one.
-The impact on investors wishing to enter the UK
They now have to consider other options to entry. The closure took immediate effect, so they have to rethink their plans.
-The alternative ways for investors –
Currently there is no direct replacement and each alternative presents challenges and limits.
- Innovator visa – available to migrants planning to launch a new ‘innovative’ business in the UK that delivers new products or services to the market. This scheme grants a three year visa which can be extended for another three years. The UK Government intends to make future alternative provision for investment-related migration through reforms to the existing Innovator route. This will make more targeted provision for investment-related migration, offering a route for entry and stay for overseas nationals with a track record of investment activity overseas and credible plans to engage in such activity. It is expected that these new arrangements will be delivered through further changes to the Immigration Rules in Autumn 2022.
- Global talent visa – available to leaders in the fields of academia and research, arts and culture or digital technologies. This scheme requires an endorsement from an approved organisation and grants a five year visa which can be extended each time it expires.
- Scale Up visa – this scheme has not yet been launched, but is aimed at helping UK start-up stage businesses employ migrants who are ‘very highly skilled’ or ‘academically elite’. Businesses will need to meet criteria including evidence of fast growth and a minimum of 10 employees.
What next?
A Y & J Solicitors believes that a better alternative for wealthy individuals hoping to benefit from commerical investment in the UK is through a method it calls ‘self sponsorship‘. Self-sponsorship is an innovative idea that hardly anyone knows but that can be the perfect solution for entrepreneurs who are hampered from taking the better-known routes to international expansion in the UK. Self-sponsorship is also simple. If you have a genuine intention to open a business in the UK and want to run an active trading company in the UK, you can follow this route. It is open to anyone who has experience in the field they wish to run their business and enough money to fund their expansion. Applicants must also be proficient in English to a level set by the UK government.
There are no strict rules on the type of business that can be run in the UK under the scheme, and you can own 100% shares of your UK company and be the director.
It is an easy three stage process.
Stage one is to establish a UK company, and then apply for a sponsor licence, which allows that company to sponsor an overseas worker on a Skilled Worker visa. That skilled worker will be you. In effect you will be sponsoring yourself to come and work in your own company. The process is completely legal and within the rules.
Overseas nationals are legally allowed to set up companies in the UK although this should be done with the aid of a registered UK accountant, as there are certain stipulations that must be adhered to.
Once the UK company is established, the next stage is to apply to the UK Home Office for a Skilled Worker sponsor licence. There are certain requirements a company must fulfil in order to be successful, for example the company must have the necessary policy and procedures in place. For this reason, the self-sponsorship process should be embarked upon under the guidance and advice of a UK legal expert. A Y & J Solicitors is the pioneer behind this process and offers the most comprehensive expertise.
Once your UK company has successfully been granted a Sponsor licence, you can proceed to the final stage of the process, which is employing yourself through your own company and applying for a skilled worker visa, using the job offer as the basis for the visa application. In order to hold a Skilled Worker visa you, and the role you are taking, must meet certain criteria including English language proficiency, salary and level of education. As long as you meet these requirements, you will be able to come and work in your UK company and enjoy the benefits of the UK’s booming economy.
If you’re curious about the costs, watch this detailed video that breaks down the fees for the entire process.
After five years you may also qualify for residency and after six, for citizenship. You can bring over your spouses and children under 18.
