UK’s high potential Tier 1 Investor Visa can be reintroduced with systematic due diligence: Experts

The United Kingdom’s golden visa programme, launched in 2008, was extremely popular with the global High Net Worth community. To qualify under the scheme, an investor was required to make a substantial investment with no other criteria required. Despite receiving much scrutiny, it was only in February this year that this route was suspended due to the government’s concern that dubious characters had taken advantage of the programme.

However, many practitioners are waiting for a review of the status of this programme as it seems a sensible route to revive the programme. The press statement issued at the time of suspension of the visa category suggested that the Home Office would return to the drawing board for this category and maybe publish specifics of a reformed route in the fall.

On October 18th, the most recent statement of changes to the Immigration Rules was published amid great anticipation from the immigration legal community. However, there was no mention of the reformed investor route, and only modest changes were announced.
Notably, the Tier 1 investor visa allowed foreigners with a minimum of £2m in investment funds in a UK bank account to apply for residency rights, along with their family. The scheme brought substantial revenue into the country. This route also provided for a fast-track residency if the applicant produced 10 million GBP.

Associates Times reached out to 50 prominent lawyers and immigration consultants to seek their views on the future of the Tier 1 Investor visa scheme. Many believe that the closure of the golden visa has been damaging to the UK’s economy, thus asking the new government to rethink the decision, and relaunch the programme, but with necessary mechanisms in place to ensure that national security is at the forefront of the process. The golden visa was scrapped mainly due to security concerns and questionable background checks by banks on applicants. One of the major reasons was that the banks lacked the proper infrastructure to do thorough due diligence on the applicants.

The UK-based immigration lawyers all seemed to agree that if a multi-layered due diligence structure was put in place it would ensure robust background checks involving both online and on-ground investigations thus reducing the risks involved in such schemes. When there is a large volume of applications, the process is overburdened therefore making effective due diligence difficult. The government should consider the establishment of a dedicated department or engaging independent firms to undertake the checks abroad.

For instance, the Caribbean region, which birthed these economic citizenship programmes, deals with due diligence checks in an organized manner. All applicants and their dependants over the age of sixteen undergo a thorough background check. The process is clear and managed by charging the applicant an additional due diligence fee to manage the cost of the background checks. The amount is often USD 7,500 depending on the country, which is paid to authorized third-party firms to run checks on the applicant. The island nations collaborate with well-known firms generally based in the United States and the United Kingdom to ensure that only people with the highest reputation and no criminal background are granted citizenship. These firms engage with INTERPOL and other agencies and also do on-ground checks on the person’s place of birth, and place of residency, check financial documents, verify all claims and then prepare a report that is handed over to the citizenship unit for a final decision.

Leading residency advisors suggested that the UK may also establish a similar or perhaps more advanced process to do cross-examinations on golden visa applicants. Previously the investors had to park £2m in their bank accounts for a five years, which could be withdrawn once the applicant achieved permanent residence. However, if the investment amount was reduced, and a non-refundable donation introduced, the national economy could benefit handsomely. The funds could be utilised for useful programmes such as welfare programmes or even to the NHS to ensure quality and timely medical treatment.

There is significant demand from foreign investors to invest in the UK economy, whilst also obtaining residency rights to live and work in the UK. Given the present economic situation in the UK with increased cost of living, as well as the volatile political situations globally in many countries where HNWI are seeking alternative options both for financial and personal reasons, reintroducing the UK investor visa would have significant mutual benefits both for applicants and the UK government and economy.

The diverse, inclusive and progressive culture of UK society is one of the particular drawcards for many highly skilled and wealthy foreign individuals to seek to invest and reside in the UK and provide opportunities for their dependants to be able to make the most of the quality educational and career opportunities the UK offers.

Associates Times communicated with major stakeholders and industry leaders of the United Kingdom’s golden visa industry to understand their viewpoint on the Tier 1 visa.

Micha-Rose Emmett – CEO of CS Global Partners, a world-leading legal advisory that specializes in intelligent citizenship solutions, said that her firm supports the idea of the UK reintroducing the investor visa option if restructured in a way that would mutually benefit the country.

“The previous model did not provide notable benefit to the country. The government should earmark key areas that could be uplifted from the revenue derived through the programme.” She noted that potential areas that would benefit from the inflow of funds should include educational projects, healthcare, R&D projects, and the arts and culture sector.

Furthermore, she said that CS Global agreeded with the former Home Secretary Priti Patel’s concerns regarding due diligence and said “carrying out comprehensive and effective due diligence is essential for maintaining the integrity of an investor immigration programme”.

“If the UK Investor Visa is to be reintroduced, due consideration to stricter background checks needs to be carried out on prospective applicants and their dependants, especially in relation to their source of wealth.”

“We would strongly recommend that the UK consider introducing such practices to protect the integrity of their programme.” said the CEO of CS Global Partners, remarking that obtaining residency status in the UK is a significant privilege.

Carter Thomas – A specialist law firm providing expert legal advice on UK immigration, said they also support the reintroduction of the programme and a new route for those wishing to invest in the United Kingdom.

“Strong due diligence checks are essential in our view, and we believe that checks by independent organizations such as those registered with the FCA is the best way forward. UK banks, investment houses and other organizations connected to the financial system already have to adhere to a very high threshold of anti-money laundering and other due diligence checks,” said Carter Thomas.

Vanessa Ganguin – leading immigration firm based in the United Kingdom, also responded to the questions. The firm said the government must establish a route within the immigration rules which permits high net worth individuals (HNWIs) to come and settle in the UK, adding that the HNWIs have always brought benefits to the UK through Investment, spending and tax revenues.

Experts on residency and immigration reaffirmed that regardless of the visa category for investors, the government must take procedures to conduct thorough due diligence checks on all investors spending over a limited amount of funds in the UK. They suggested that if any wealthy foreigner, irrespective of their status, invests over £100,000 in property, real estate or any other investment, they should be subjected to extensive background checks; this will significantly lower the threat to national security. Similar to island nations in the Caribbean, the UK must also establish a system and charge these investors additional non-refundable due diligence fees.