Why UK's Retirement Of "Golden Visas" Is A Mistake
Since the launch of the UK's Tier 1 investor visa regime in 2008, almost 5,000 high net worth individuals have taken advantage of it. The system has been scrubbed by the government amidst the Russian invasion of Ukraine and concerns that it was being abused. The author here argues that this step is foolish.
A few weeks ago the UK government retired the Tier 1 investor visa regime at a time when the use, or alleged misuse, of such “golden visas” became a pressing issue after Russia’s invasion of Ukraine in late February. A number of countries such as Canada have occasionally suspended their equivalent regimes, usually as a result of domestic political controversies. These systems have been variously attacked for being tools of the super-rich and for greasing the wheels of laundered money. However strenuous the denials, these charges won’t entirely go away. However, one concern for the UK has to be whether suspending or killing these visa programmes is a good look when the country is trying to encourage inward investment after Brexit. Policymakers in Westminster know that an inconsistent message is an ineffective one. Even so, geopolitics and worries about whether London became a cosy haven seem to be driving policy for the time being.
To consider the benefits of these schemes, and the arguments against them is Adeeb Chowdhry, director at Farani Taylor. The editorial team is grateful for these insights and invites responses. Jump into the debate! Email email@example.com
The Tier 1 Investor Visa (affectionately nicknamed the “golden visa”), launched in 2008, allowed foreign investors with a UK bank account and at least £2 million in investment funds to apply for residence in the country alongside their families. How much they were willing to invest had an impact on how quickly they could apply for permanent residence – those seeking to invest £2 million had a five-year wait, while those keen on investing more than £10 million were granted a speedy two-year wait. Since the Tier 1 visa was launched, nearly 5,000 investors from across all continents have relocated to the UK using the scheme, giving the UK economy a well-needed cash injection. It is for this reason that the government’s immediate scrapping of the Tier 1 visa scheme in February 2022 was such a misstep.
Foreign investment is a cornerstone of the UK economy – despite the challenges and trade concerns brought about by Brexit, UK businesses receive billions in foreign investment through the Tier 1 visa scheme each year. The government should take a step back, and reconsider what options are available without resorting to a blanket ban. It is imperative that stolen money doesn’t enter into the UK circulation, but surely there are more sensible alternatives to halting all top tier investor visas – alternatives where honest investors seeking to provide the UK with their business aren’t shut out. Any steps could involve enhancing vetting of Tier 1 investor visa applicants, or investigating foreign investors situated in the UK with links to financial crime.
So, with this blanket ban cutting off one avenue for foreign investors, what other options are available to these HNW individuals who want to invest in and relocate to the UK? The government does offer other forms of visa available for those relocating for business purposes. One of which is the global talent visa – this five-year visa is available for leaders in the fields of culture, technology, arts and academia, and requires an endorsement by approved organisations (such as the Royal Society, Arts Council England etc.). It can be renewed at the end of the five-year term.
Another route available to investors is the innovator visa, which is granted to experienced businesspeople who are planning to establish an enterprise in the UK. Those granted the innovator visa are permitted to stay in the UK for up to five years with their family, with a view to then applying for permanent residence at the end of the five years.
One exciting prospect on the horizon is the Scale Up visa, expected to be launched later this spring as a part of the government’s overhaul of the immigration system. For UK companies to avoid having to relocate abroad in order to gain access to top talent, this visa allows for “academically elite” and “highly skilled” individuals earning over £33,000 per annum to emigrate to the UK for work. This visa, which is widely expected to be used by sectors reliant on overseas skilled talent, such as the fintech industry, is only available for firms experiencing rapid growth (defined by having an employment growth rate of over 20 per cent in a three-year period, or three years of annual average revenue). With this visa, it is expected that visa holders and their families will be able to extend their residence in the UK for up to five years, to then be eligible to apply for Indefinite Leave to Remain.
The Tier 1 Scheme is thought to have brought £17 billion of foreign investment into the UK in the last decade. At a time where the cost of living is rising for millions, cutting off routes to boost the UK economy is certainly a shot in the foot from the government. Security is important, but a blanket ban for all HNW investors eligible for the scheme needs to be reconsidered.