The number of applicants for UK investor visas from China has risen sharply - but the success rate has fallen, figures show.

The number of wealthy Chinese citizens applying to get a UK investor visa has surged but the number who get through has fallen because many of them don’t fill out paperwork correctly, figures show.

Three times more Chinese nationals applied for UK investor visas last year than in the year before, with 1,583 Chinese applicants in 2014, up from 507 in 2013, according to Radius Equity, the specialist investment house.

But the number of such persons getting through has dropped: The success rate of Chinese nationals applying for investor visas to live in the UK fell from 99 per cent in 2013 to 85 per cent in 2014.  Radius Equity says that this fall is likely due to some applicants not having received the best advice about how to apply at a time of such rapidly rising demand.

The increased desire of Chinese HNW individuals to use the investor visa regime is, at one level, paradoxical given China’s oft-mentioned economic prosperity, although a desire to live in the West, fear of a possible downturn and the brute fact of a Communist regime in their home country are likely motives.  China may be getting richer but many of its wealthiest people want to get out. According to last year’s report on wealth trends by Shanghai’s Hurun Research Institute, some 64 per cent of high net worth individuals whom it surveyed (393 HNW and UNHW individuals) were either emigrating or wanted to do so. Many of them are sending their children abroad to places such as the UK and US as well.

Whatever the motivation, the influx of Chinese HNW individuals is a boost for the UK economy, Gary Robins, director at Radius Equity, said. “This scheme is proving a great success in bringing large amounts of inward investment to the UK, helping to fund SMEs and the enterprise economy,” he said.

The influx is likely to continue particularly with the UK general election out of the way, he said. The opposition Labour Party, which had pledged to change the country’s non-domiciled system, impose taxes on high-value property and hike income tax – lost the election.

“With the uncertainties of the election cleared away the UK remains the destination of choice not just for Chinese investors, but for high net worth investors globally.  Investors are bringing huge amounts of money into the UK, but in the longer term demand for these visas could potentially outstrip the number of visas the new government is willing to supply,” Robins said.

The investment visa regime in the UK – part of a number of such “golden visa” schemes operated by jurisdictions around the world – has been recently changed; to qualify, a person must commit at least £2 million (the previous minimum amount was £2 million). That change took effect in November last year. Other rule changes mean cash or property holdings are no longer counted – the full £2 million must be invested in equity or debt capital of active UK firms, or held in government debt (gilts).

“From our experience, we have seen a decrease in Chinese clients applying for Tier 1 (Investor) visas following the changes to this route. We imagine that some investors experience difficulties transferring £2 million out of China into the UK.  However, we will have to wait and see whether this demand continues under the new Tier 1 (Investor) rules," Nick Rucker, partner, and Jessica Yu, solicitor, at Berkeley Law, told this publication when asked about the figures.