Since its introduction in 1994, the Tier 1 (Investor) category has been a fundamental means of attracting high-net-worth individuals to invest in the UK.

Following the recommendations from the Migration Advisory Committee – an independent public body consisting of economists and migration experts – a number of significant changes are set to come into force later this year in relation to the investor category.

The rich and wealthy currently considering whether to invest in the UK in exchange for migrant status leading to settlement and British citizenship should think hard and fast. Delaying the decision could be a very costly price to pay as the new investor rules will require applicants to have £2 million.

THE EXISTING TIER 1 (INVESTOR) CATEGORY

An investment of at least £1 million into the UK must be made by high-net-worth individuals under the Tier 1 investor category.

Investors can later become eligible for settlement after 5 years by maintaining their investments. Settlement may be fast-tracked after 3 years or 2 years for those investing £5 million and £10 million respectively.

Key advantages of the investor category are that investors are not expected to meet the English language requirement, and also have the right to work in the UK.

THE PROPOSED CHANGES

Whilst the finer details of the rule changes are yet to be decided, it is all but confirmed that applicants must soon invest a minimum of £2 million. Potential investors are faced with the real possibility that prolonged hesitation could burn a sizeable £1 million hole in their pockets should they not act before the rule change is implemented later this year.

On the flipside, the proposed changes provide investors with a much greater level of flexibility over how they wish to invest their money. The rules relating to the maintenance of investments are also expected to be relaxed thereby allowing investors to have a greater say in how their investments are controlled.

The changes will also introduce an auction system for a set amount of premium route visas which will allow applicants to apply for settlement after two years. It is worth noting that there will be a reserve price of £2.5 million, of which £500,000 will be donated to the UK government as a gift for good causes. Controversially, it is planned that the auction system will replace the current fast-track routes to settlement and therefore introduces a degree of uncertainty to potential investors.

SANCTIONS

There are a number of countries such as Iran, Afghanistan, Egypt and Libya among others who are subject to financial sanctions imposed by the UK.

The sanctions are complex and vast in their scope. This is best illustrated by confirming that, for example, nationals of Iran wishing to make an investor application must ensure that they obtain the necessary permissions to make transfers of money to the UK before submitting their Tier 1 (Investor) application.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.