UK to abolish tier 1 investor visa

The UK is set to scrap the Tier 1 investor visa scheme months after the Home Office carried out a legacy review of the scheme for ‘security concerns’.

According to BBCthe government is under pressure to scrap the ‘golden visa’ scheme over the UK’s ties to Russia – as tensions continue to rise over the threat of an invasion of Ukraine.

Visas have been popular with wealthy Russian oligarchs and Chinese investors.

Reports say there will be an announcement next week on visas.

International Advisor contacted the Home Office for comment, but did not respond in time for publication.

The visa is available to those who have access to at least £2 million ($2.72 million, €2.39 million) to invest in the UK from outside the European Economic Area ( EEA) and Switzerland.

Applicants had to prove they had control of the required £2million for at least two years, instead of 90 days, or provide proof of the source of funds.

Political decision

Antonia Torr, partner and head of immigration services at Howard Kennedy, said AI“Closing the Tier 1 investor visa route has all the hallmarks of a political decision.

“Following Home Office reforms a few years ago, investors have to prove the source of their wealth as part of the visa application process and so it is not entirely clear why there is would have money laundering concerns if all processes were followed correctly.

“It is also worth noting that the last few years have seen a drop in the number of Russians applying for this visa and so really it will be other nationalities that will be impacted by this decision.

“As a measure to put pressure on Russia, it may not have the impact that the Secretary of State anticipates.”

Bhavneeta Limbachia, immigration lawyer at Russell-Cooke law firm, said: ‘The current visa allows for a fast track to establishment in the UK depending on the amount of investment injected into the economy British.

“Foreign investors may now need to consider alternative routes to trade in the UK, such as the Innovator visa or the Scale-up visa, which are due to be implemented this spring. Overall, it is evident that the Government’s focus has shifted from investment to skills-based visas, in line with its aim of attracting the ‘best and brightest’ to the UK.

flip flops

The ‘golden visa’ scheme has come under scrutiny in recent years for its links to money laundering and organized crime, as well as a lack of due diligence in applications .

In December 2018 the UK decided to suspend the Tier 1 investor visa – but then reversed that decision within days and reformed the scheme in March 2019 to protect Britain from ‘illegally obtained funds’ .

At the time, the Home Office said it was seeking to separate money launderers from “genuine investors”, who should have access to a workable visa system.

But in July 2021, the UK said it was reviewing all Tier 1 investor visas granted before April 5, 2015.

A spokesman for the Home Office said in July 2021: “We reformed the Tier 1 visa pathway in 2015 and 2019 to crack down on dirty money and we haven’t ruled out bringing d ‘other modifications if necessary.’

Mandeep Khroud, immigration attorney at Irwin Mitchell, said AI“If the Home Office does announce the end of the investor drive next week, it can be assumed that concerns about financial crime persist.

“The Investor Class has provided a valuable and flexible pathway for those who intend to live, work, study and settle in the UK. People currently in the UK as investors are likely to Level 1 will be able to stay on this route to permanent residency.

“However, in the future, people who may have used the investor category will have to apply under more specific visa categories, limiting their activity in the UK. It will certainly be interesting to see if the Home Office offers an alternative route with a higher level of financial controls, or whether he intends to remove the concept of citizenship-by-investment entirely from UK immigration rules.

Dolphin

Financial companies have also encountered problems with the program.

In 2018, Quilter Cheviot closed its golden visa business to new customers.

But, in March 2021, the Financial Conduct Authority (FCA) imposed a number of restrictions on Dolfin Financial after it “identified a number of serious concerns about the way Dolfin conducts its business, including visa business activities. ‘level 1 investor in the company and financial activities’. crime control”.

A few months later, Smith & Williamson was appointed administrator of Dolfin Financial UK.

Fight against money laundering

Charlie Fowler, senior partner at Collyer Bristow, said: “The government is right to step up its efforts to tackle money laundering, and its drive to increase transparency is an important part of that work. However, let’s hope this doesn’t come at the expense of those who don’t exploit the system.

“It is questioned whether, rather than reversing the investor visa category, it can instead be revised to impose stricter requirements on applicants which ensure that only ‘clean’ money is invested in the UK. We await further details from the government on its intentions.

Danielle Reece-Greenhalgh, senior partner at law firm Corker Binning, added: “The Tier 1 visa regime has come under intense scrutiny since its inception, with Russian and Chinese investors making up the vast majority of its users.

“Concerns over illicit wealth led to a toughening of the regime in 2015, but the Home Office remained entirely dependent on the AML procedures of UK banks and financial institutions to ensure the system is not used to launder the proceeds of crime in the UK.

“The abolition of the ‘golden visa’ is a radical solution, but does not solve the underlying problem of the effectiveness of UK money laundering controls.”




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