Number of UK investor visas issued down by 44 per cent
The number of Tier 1 investor visas issued in the UK has fallen by 44 per cent to 219 in the last year, down from 394 the year before, as international high net worths are prevented from travelling to the UK due to Covid restrictions, says City law firm Bates Wells.
Bates Wells says that while investor visa applications have fallen so far in 2020, the end of the Brexit transition period on 31 December could trigger another rise as European high net worth individuals will no longer be able to enter the UK under freedom of movement.
Worldwide lockdown rules have made it difficult for wealthy investors to move around freely and make investments into the UK. Bates Wells says a reduction in investment from ultra-high net worths will negatively impact the growth of UK businesses and in turn, the overall economy.
For the majority of countries, there has been an overall decline in the number of investor visas issued in 2019/20 in comparison to the previous year, these include:
China: 52 visas issued in 2019/20, down 71 per cent from 173 in 2018/19
Russia: 18 visas issued in 2019/20, down 25 per cent from 24 in 2018/19
United States: 16 visas issued in 2019/20, down 47 per cent from 30 in 2018/19
Saudi Arabia: 7 visas issued in 2019/20, down 30 per cent from 10 in 2018/19
However, Hong Kong was one of few countries with an increase in the number of investor visas issued, up 68 per cent to 52 in the last year, from 31 the year before, likely due to its political situation. Investor visas issued to individuals from India also saw a slight increase, up 30 per cent to 13 in the last year.
Bates Wells says it’s expected that following the end of the Brexit transition period and free movement, we may see an increase in investor visa applications from individuals in European countries, as it will be more difficult for them to enter the UK.
In addition, individuals from outside of the EU who were able to get a passport from another European country could easily come to the UK due to free movement. As of 1 January 2021, they have no longer been able to do this. As a result, an increasing number of overseas UHNWs and HNWs may look to use investor visas.
Foreign investors are often attracted to the UK as it is seen as one of the securest jurisdictions to hold assets, as well as, having a good reputation for private education for their children. It is common for a child under the age of 18 to be classified as a ‘dependent’ under their parent’s investor visa application which will allow both of them to reside in the country.
Under a Tier 1 investor visa, applicants must invest GBP2 million or more in the UK to reside here for three years and four months, with the possibility of a two-year extension.
Chetal Patel, Partner at Bates Wells, says: “The reduction in investment from wealthy individuals overseas comes as bad news for UK businesses who need a serious boost to inward investment.
“Investor visas are a popular choice amongst UHNWs and HNWs as they give them an opportunity to invest in a UK business**, which may be a family business, and their children a ticket into the UK’s education system.
“The end of free movement will mean European HNWs will need to carefully consider their options and those of their family members for living and working in the UK. Investor visas could be an attractive solution as a golden ticket to the UK.”