The Future of the Tier 1 (Investor) Visa in 2018
By Saida Ahmed, of OTS Solicitors
It is a truth universally acknowledged, that a country about to leave the EU must be in want of foreign investment.
Thankfully, according to latest statistics, applications for the Tier 1 (investor) Visa rose by 61 per cent year on year, in the three months after the referendum, in anticipation of stricter rules on limiting Immigration.
This also represented a rise compared to the pre-referendum quarter of this year, as application numbers rose from 53 to 74 according to some of the City’s best Immigration lawyers’ analysis.
This is a sharp reversal following the plummeting of Tier 1 (investor) Visa applications in the second quarter of 2015, which was the result of reforms introduced in 2014, whereby the qualifying funds required to apply for entry under the Investor Visa route was raised from £1 million to £2 million.
At the time, the Governments policy on Tier 1 (investor) Visas was sharply criticised by wealth managers, Immigration lawyers and tax experts who noted an increase in competition between the UK and other EU nations offering improved terms under their Investor Visa programmes, leading to an EU passport.
For example, in Cyprus an investor applicant can obtain a full EU passport within three months. In the UK, an Investor Visa requires a five-year commitment from an applicant. Additionally, other European countries including Portugal request a much lower initial investment capital.
One of the key drivers for the jump in Tier 1 (investor) Visa applications, is the weaker pound. Following the June referendum, the value of Sterling has tumbled by around 18%. This is bad news for UK households, for whom inflation will start to bite hard in 2017. But for foreign investors, especially those whose currency is tied to the US dollar, the time for investing in the UK has never been better.
High-net-worth Individuals can invest in government bonds as well as in companies (except property investors), to gain access to Tier 1 (investor) Visas. Larger investments of £10 million entitle people to apply to settle in Britain, after only two years.
Big plans for UK infrastructure
It seems that for the US and UK governments, the policy of austerity, which has been in place since the 2008 crash, is well and truly over.
The UK government recently published its infrastructure-investment pipeline, detailing a record £500 billion ($634 billion) of projects scheduled to be undertaken in the coming years.
Government investment is behind about 40 percent of the pipeline after Chancellor of the Exchequer, Philip Hammond, announced plans for a £23 billion National Productivity Investment Fund (NPIF) last month. Projects include the Thames Tideway Tunnel, smart meters and upgrading the A14 highway in eastern England.
The strategy of accelerating infrastructure development is designed to circumvent the anticipated economic shocks to follow after Britain formally triggers Article 50 in March, beginning the process of leaving the EU.
The Treasury stated that private finance will make up more than half of the pipeline to 2020-21, helping to deliver projects ranging from transport and broadband to flood defences and housing.
In its press release, the Treasury stated that the NPIF will boost the UK’s productivity in the long-term – which is critical to help raise living standards and wages – while also improving living standards in the short-term by making passenger journeys quicker and more reliable, improving broadband connections, and building more homes.
It is estimated that if the UK raised its productivity by one percentage point every year, within a decade it would add £240 billion to the size of the economy; £9,000 for every household in Britain.
A combination of a weaker pound and a massive surge in the relatively low-risk investment opportunities of government-backed infrastructure projects provides solid opportunities for high-net-worth individuals who harbour ambitions of not only making a good return on their investments, but eventually gaining a British passport.
OTS Solicitors is one of the most respected Immigration law firms in London. By making an appointment with one of our Immigration solicitors, you can be assured of receiving some of the best legal advice available in the UK today. Our business immigration solicitors can assist you in obtaining a Tier 1 (investor) Visa and can refer you to financial advisors to advise you on suitable investments.
If you wish to discuss any of the points raised in this blog, please phone our London office on 0203 959 9123.