It is expected that the Tier 1 Investor Visa will soon be changed – following recommendations to the UK government made by the Migration Advisory Committee (MAC). The MAC, have just published their report on the Investor Visa, which focuses on whether the current investment thresholds of the scheme provide sufficient economic benefits to the United Kingdom.
The current Tier 1 Investor Visa awards UK residency to non-eu citizens, when making an investment of £1,000,000 in the UK. Permanent Residency can be achieved after 5 years with this investment, with the scheme currently offering a fast track route to Permanent Residency when investing £5 million or £10 million, although this option has rarely been used. It has however been suggested by the MAC, who advises the government on immigration policy, that the current system is not creating enough economic benefit to meet government objectives.
Increase in Minimum Investment Threshold
The MAC has recommended that the minimum investment should be doubled to £2,000,000. It has been argued that the threshold has remained the same since 1994 (£1M) and that an increase in line with earnings is fair. Despite strong competition from other countries with comparable investment based visa programes, MAC has stated that it does not believe this higher investment threshold will be a major deterrent to high net worth families wanting to live in the UK.
Proposal for Investment Rules
The current Tier 1 Investor Visa requires that the investment must be made in the form of UK Government Bonds or UK company shares, and maintained for the duration of the investors stay – or until Permanent Residency is achieved. To date, the majority of applicants prefer the stability of bonds, but MAC has recommended that the UK government widen the requirements, to encourage investment outside of Gilts. To make the increased risk of these options more attractive the ‘top up’ rule would be abolished, meaning there would be no requirement to top the investment up should its value fall below the threshold.
Fast Track Route to Permanent Residency
The current system allows investors to achieve Permanent Residence status after 5 years when investing £1M. A fast-track system was introduced by 2011 allowing investors to achieve this status in 2 or 3 years by increasing their investment to £10M or £5M respectively. The MAC has also suggested an alternative “premium route” to Permanent Residence, in the form of a yearly “ebay style” auction process. This proposed system would auction off 100 premium visas to the highest bidders, creating a new fast-track route to Permanent Residency in the UK. This new system would also potentially halve the amount of days required to stay in the UK to 90 days.
In 2012 – 2013 there were 560 investor visa applications, mainly from China, Russia and U.S.