The United Kingdom has a points-based system for foreign nationals who wish to move to the UK. This system is divided into a number of different tiers. The investor visa is within Tier 1 and is often referred to as Tier 1 (Investor).
It has recently been announced that certain changes to the investor visa scheme will take effect from 6 April 2011. These changes are beneficial to potential investors in a number of ways, and can be summarised as follows:-
- There is no longer a requirement to demonstrate any proficiency in the English language, either on entry into the UK, to extend the time of permitted residence or on settlement;
- The number of days which an applicant can be absent from the UK in any calendar year while still qualifying for the UK residency condition for settlement/extension of leave to remain has doubled from 90 days to 180 days;
- Those who invest £10 million in the UK will be allowed to settle in the UK after two years compared to the previous five year requirement. For those who invest £5 million they will be eligible to settle here after 3 years.
Entry Clearance
In order to qualify for the entry visa under the Tier 1 (Investor) category visa you must either:
- Have at least £1 million of your own money (and held under your control) in a regulated financial institution (i.e. a bank or building society) which is freely disposable in the UK; or
- Have:
-
- Net personal wealth of at least £2 million (joint assets held with a spouse or partner or held in your spouse or partner's own name may be taken into account); and
- Money borrowed from a financial institution regulated by the UK Financial Services Authority (FSA) and freely disposable by you held in a regulated financial institution of not less than £1 million.
Detailed evidence of your ability to qualify for an entry visa will be required (for example bank account statements and statement of funds generally). If the money used to demonstrate this has not been held in a portfolio or bank account for at least 3 months, you will need to establish the source of these funds.
The money which has to be freely disposable in the UK will only be taken into account for the purposes of these rules if, on the date of the application, it has not been invested in the UK for more than 12 months.
The entry visa will allow you to enter the UK and will allow you to stay in the UK for 3 years and 4 months.
Extension Applications (also known as Leave to Remain)
If you intend to stay in the UK for more than 3 years and 4 months and you are not eligible to apply for indefinite leave to remain after 2 or 3 years (see below), you will need to make an extension application for permission to remain in the UK. Your eligibility for the extension will depend on how you have used the funds available for investment.
You will have to provide evidence that within 3 months of your entry into the UK and until the expiry of your visa you have
- invested at least £750,000 in UK Government bonds, share capital or loan capital in permitted active and trading UK registered companies (companies whose main business is property investment will not qualify, neither will investments made in open-ended investment companies, investment trust companies or pooled investment vehicles "permitted companies"); and
- invested the balance of the £1 million in the UK by the purchase of assets in the UK or by maintaining the money on deposit in a UK regulated financial institution
Regular monitoring is required to ensure that investment levels do not dip below these thresholds, especially in view of the recent volatile markets experienced in the UK.
If the extension application is granted, your visa will be extended for 2 years.
Indefinite Leave to Remain (also known as Settlement)
If you meet certain conditions, you may now be able to settle in the UK once you have lived in the UK for 2 years as an investor.
Eligibility to Apply for Settlement after 2 years of Residence in the UK
You can apply for indefinite leave to remain in the UK (or settlement) after having lived in the UK for 2 years if you meet the following conditions:
- You have money under your control in the UK of at least £10 million; or
- You have
-
- net personal wealth of at least £20 million; and
- money borrowed from a FSA regulated financial institution and freely disposable by you held in a regulated financial institution of not less than £10 million.
And
- You invest
-
- at least £7.5 million in UK Government bonds, share capital or loan capital in active and trading UK registered permitted companies; and
- the balance of the £10 million in the UK by purchasing assets in the UK or by maintaining the money on deposit in a UK regulated financial institution.
- And throughout the 2 year period you spend less than 180 days in any calendar year outside the UK
Eligibility to Apply for Settlement after 3 years of Residence in the UK
You can apply for indefinite leave to remain in the UK (or settlement) after having lived in the UK for 3 years if you meet the following conditions:
- You have money under your control in the UK of at least £5 million; or
- You have
-
- net personal wealth of at least £10 million; and
- money borrowed from a FSA regulated financial institution and freely disposable by you held in a regulated financial institution of not less than £5 million.
And
- You invest
-
- at least £3.75 million in UK Government bonds, share capital or loan capital in active and trading UK registered permitted companies; and
- the balance of the £5 million in the UK by purchasing assets in the UK or by maintaining the money on deposit in a UK regulated financial institution.
- And throughout the 3 year period you spend less than 180 days in any calendar year outside the UK
Eligibility to Apply for Settlement after 5 years of Residence in the UK
You can apply for indefinite leave to remain in the UK (or settlement) after having lived in the UK for 5 years if you meet the following conditions:
- You have money under your control in the UK of at least £1 million; or
- You have
-
- net personal wealth of at least £2 million; and
- money borrowed from a FSA regulated financial institution and freely disposable by you held in a regulated financial institution of not less than £1 million.
And
- You invest
-
- at least £750,000 in UK Government bonds, share capital or loan capital in active and trading UK registered permitted companies; and
- the balance of the £1 million in the UK by purchasing assets in the UK or by maintaining the money on deposit in a UK regulated financial institution.
- And throughout the 5 year period you spend less than 180 days in any calendar year outside the UK
In addition, you will have to provide evidence of the required investments as stated above to show that such investments have been maintained for the required period of time. These investments must generally be made within three months of entry into the UK . As with extension applications, regular monitoring is required to ensure that investment levels do not dip below the relevant threshold.
British Citizenship (Naturalisation)
It is speculated that the changes in settlement will be reflected in the naturalisation rules. The hoped-for changes would allow an investor who has been living in the UK for one year without any time restrictions (ie from the first anniversary of being granted indefinite leave to remain (or settlement), which may only be 3 years after having arrived in the UK) and who intends to continue living in the UK to apply for British citizenship. This has yet to be formally proposed, however.
A number of countries do not allow their citizens to become citizens of another country. In such cases the grant of British citizenship may trigger the automatic renunciation of his or her original nationality, which may not be desirable.
General
We would be pleased to advise and assist on all aspects of your move to the UK. Our award-winning private client department, one of the largest and best regarded in the UK, is able to advise you on all aspects of a move to the United Kingdom from the optimum way to structure your assets for tax purposes to our "family office" team who can assist with the more practical aspects involved with a move (from locating a suitable home to setting up bank accounts and accounts with utility providers).
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.
