Closure of the golden visa route had been speculated for years. Now with the Ukraine crisis building to the inevitable climax, it finally happened: Home Secretary Priti Patel has closed the Tier 1 Investor route with immediate effect.
Decisive action in the immigration arena is an important image for a Government elected with the promise to “take back control of our borders”, and this was not a moment to be caught out.
Not so long ago, UK Government policy was to reflect our “intensely relaxed” view of personal wealth by offering residence rights to wealthy migrants in return for prescribed investment through Tier 1 Investor visas, often referred to as the UK’s “golden visas”. The assumption then was that the limited safeguards which supposedly established the source and directed the investment of funds would eliminate risk and ensure that only social and economic benefit followed. By contrast, this week’s Statement of Changes CP632 recognised Tier 1 Investor’s potential for facilitating the lawful presence of hostile but powerful migrants, setting them on a path to permanent residence and British citizenship despite money laundering and security concerns. It shut it all down, at once. This, Priti Patel confirmed, is “just the start of our renewed crackdown on fraud and illicit finance”.
It has taken some time to shut down the Investor route. Opposition politicians have pointed out in Parliament that more than a few Tier 1 Investors have been close to ministers and party-political fundraising in the past 14 years.
There are run-off arrangements in place for those already holding Tier 1 Investor status, and going forward changes to the Innovator route are planned to ensure that the UK does not eliminate the perceived benefits of Investors in addition to the potential dangers.
How Tier 1 Investor used to work
Tier 1 Investor allowed access to the UK for non-visa nationals investing a minimum of £2 million (originally, £1 million) into UK registered companies. The route ultimately led to settlement in five years, with ‘fast-track’ routes available for individual’s investing £5 million or £10 million into UK businesses.
First launched in 2008, the Investor route was “reformed” in 2015 and further amended in 2019. The changes aimed to help prevent abuse of the route, particularly where there was heightened risk that wealth had been acquired by illicit means. It appears that these reforms have not had the desired impact, hence the scrapping of the visa type.
What happens to Tier 1 Investors now
Individuals (and their dependant family members) who already hold Investor visas, or applied for extensions before the route closed, will continue to hold valid leave. The deadline to extend immigration permission under this category (leave to remain) is 17 February 2026 and the deadline to apply for Indefinite Leave to Remain (ILR) is 17 February 2028.
The new Innovator route
The Home Office continues to adjust the UK immigration system. Changes to the Innovator route under the new points-based system are expected in Autumn 2022. The apparent intention is that the reformed Innovator route will only lead to settlement where there is tangible evidence of genuine job creation and positive economic contribution to the UK, rather than allowing for the passive holding UK investments. The concept isn’t new; the mechanism may be.
The Innovator visa is for those who intend to set up and run an “innovative” business in the UK. Put simply, the new business or business idea needs to be unique to the UK market, endorsed by an approved body and have the potential to grow. To create a new business in the UK and be granted an Innovator visa, you will need a minimum of £50,000 of investment funds available.
The Government is not going to give up on attracting high-net worth individuals to the UK. It wants to re-focus on ‘overseas nationals with a track record of investment activity overseas and credible plans to engage in such activity’ in the UK.
The devil will be in the detail: how will the Government require this track record to be measured, evidenced and monitored? We shall be watching developments.