Proposals to reform the way high net worth investors can gain fast-track entry to the UK, including an eBay-style auction of 100 visas, has been met with skepticism by immigration specialists.
The proposals for changes to the Tier 1 investor visa programme from the Migration Advisory Committee (MAC), a non-departmental public body, included:
· Raising the investment threshold from £1 million to £2 million
· Encouraging alternative investments to include infrastructure bonds and venture capital
· Auctioning visa slots with a reserve price around £2.5 million, with the excess over £2 million going to charitable causes
· Accelerating the settlement process after two years for those with an auction slot and relaxing the residency requirements for these investors.
Alastair Collett, a partner at law firm Bircham Dyson Bell, said the original intention of the Tier 1 investor visa programme was to attract investment and wealth from abroad. That money was then meant to enter the British economy in the form of taxation and increased employment.
Collett questioned whether this original aim had been achieved.
“[The British public] might find it hard to swallow a system in which visas are auctioned off to the highest bidder in the style of eBay,” he said.
“The real debate will centre on what price should be charged for permanent residence in the UK and whether the amount of money diverted to worthy causes should be fixed, rather than simply depend on the success of each auction," Collett adds.
Rose Carey, partner and head of immigration at Speechly Bircham said under these plans investors would effectively be buying a two-year visa that could lead to settlement.
Carey said an accelerated route to settlement under the current scheme already exists. In the current scheme, if the investor invests £5 million it will take three years to get settlement and two years if they invest £10 million. Carey said the take-up of this initiative had been very low.
She said it would have been better to have kept the accelerated settlement for the £5 million or £10 million investments and have allowed dependents to settle at the same time.
Chinese investors leading visa applicants
Despite these objections, London & Capital said 38% of its investor visa cases were Chinese clients and the trend was set to continue.
Clients typically invest in high quality UK corporate bonds and large British brands, such as British Airways and Tesco.
London & Capital said about 50% of its Chinese investors were young entrepreneurs, with children, searching for good education options in the UK. The other half were university students who look to remain in the UK after graduating, but find attaining a work visa increasingly difficult, so instead look to an investor visa.
Research from the Office of National Statistics, published by London & Capital, found Chinese entrepreneurs accounted for 32% of all investor visas.
The UK government is now considering whether to implement the MAC proposals.
It is likely the UK government will indicate what changes it will make in March with those changes implemented in early April.