Changes to Tier 1 (Investor) Visa Rules
Following a report from the Migration Advisory Committee earlier this year, a series of changes to the Tier 1 (Investor) regime came into force on 6 November 2014. Most significantly, the minimum required investment has increased from £1 million to £2 million. Further, the amendments contain several important changes to the rules regarding the nature of the investment, the requirement to ensure that the investment amount remains at the necessary level and the powers of caseworkers to investigate the origins of an investment. Any application lodged before 6 November 2014 will be processed using the previous regime.
The value of the investment required for entry to the UK using the Tier 1 Investor scheme has increased from £1 million to £2 million. This increase to the investment amount is thought to be long overdue, as the rules have not changed since 1994.
Prior to these most recent changes, the investor could allocate 25% of the investment amount to assets based in the UK, such as a house or bank account. However, the investor must now invest all of the investment amount in active trading UK Companies or government bonds. An investor is no longer permitted to rely upon a loan in order to make up any part of the investment amount.
The requirement that the investment must be “topped up” if it fell below the required threshold value has been removed. However, investors who sell part of their investment must replace the part that has been sold within “the reporting period”. As such, it would seem that the focus has shifted from the “value” of the investment to the “quantity” of the investment, although it is not entirely clear how this new provision might work in practice. It is hoped that further policy guidance will clarify the rules regarding partial sale of the investment. We will provide further comment about this in due course.
The investment is intended to have the effect of fostering economic growth in the UK and it is hoped that the above changes will encourage investors to buy higher risk shares, rather than “safe” government bonds. The government intends to consult further regarding the type of investments that would best encourage economic growth within the UK.
Caseworkers will have the power to investigate the source of an investor’s funds if they have reasonable grounds to suspect that the funds are not actually in the investor’s control, that the funds were unlawfully obtained (or would be considered so, had they been obtained in the UK), or that the party who is providing the funds is not of good character, such that approval of the application would not be in the public interest. As a result, an investor may need to provide more comprehensive evidence in relation to the history of the investment amount, in order to show how the funds were obtained.
If you have any questions about the new Tier 1 (Investor) rules, please do not hesitate to contact San Chima to discuss how we can assist you with your application.