From midnight Friday, 7th December, the Tier 1 Investor visa scheme will be temporarily suspended to new applicants pending the introduction of a new audit system and changes to the way the scheme will operate. Fearing that the Tier 1 Investor visa is open to abuse, the Home Office wishes to tighten its anti-money laundering protections to ensure that applicants’ funds are lawfully held, whilst also improving the financial benefit to the UK derived from their investment.
When the changes take effect, new applicants will be required to prove that they have had control of the required £2 million for at least two years. They will also have to have their financial affairs audited by suitably regulated UK auditing firms which have no involvement with any qualifying investments or the visa application itself.
Other changes to the scheme will aim to increase the benefits to UK companies by changing what will be a qualifying investment. Amongst the proposals are excluding investment in Government bonds and strengthening the rules to ensure investments are made in active and trading UK companies.
A type of investment which is presently excluded, pooled investment (where funds from several investors are pooled together by an intermediary and then invested, rather than invested individually) will be permitted. Such pooled investments must have Government approval which will be given where project demonstrates a clear economic benefit to the UK.
The changes will have an immediate impact on the ability of individuals to apply for a Tier 1 Investor visa. A date is not given for when the suspension will end leaving prospective applicants in limbo pending the introduction of the new rules. Once the revised Tier 1 Investor visa route has been set out, applicants will need to submit to the time consuming process of an independent audit of their financial affairs, on top of the need to demonstrate that they have held the funds for at least 2 years. Many current Tier 1 Investors elect to sell property to provide the £2 million funds needed under the scheme. We would assume that demonstrating ownership of property with £2 million in equity for at least 2 years will suffice once that equity is converted to cash on a sale.
If you need help with your Tier 1 Investor visa application, please contact our highly experienced solicitors and partners, David Robinson or Evan Remedios on +44 (0)20 7038 3980, or via email: firstname.lastname@example.org and email@example.com.