Is the UK still open for business?

On 17 February, UK Home Secretary Priti Patel announced on the closure of the Tier 1 Investor route for new applicants with immediate effect “following our review of all those granted.”

The investor route allowed overseas nationals to obtain a visa to live and work in the UK in exchange for investing in the UK economy. Following the scrapping of the Tier 1 (Entrepreneur) route in 2019, it was the only route for which the applicant didn’t have to rely on anyone else to obtain the visa (or the country of their birth). It was an attractive route for a number of reasons; it required no endorsement from a third party or sponsorship from an employer. It could be used for those looking to relocate to the UK full time on a self-sufficient basis and bring dependant family members with them (who could then live and work and/or study in the UK). It could equally be used by those only looking to use the UK as part of their international business portfolio, without the restrictions of the visit visa.

The entry level for an investor visa was £2m. After five continuous years of living in the UK and two further visa applications, investors could then apply to settle in the UK. As with other routes, the investor route encouraged additional investment in exchange for accelerated settlement. An applicant investing at least £10m in the UK could settle after living in the UK for two continuous years. For a £5m investment you could settle in the UK after three continuous years.

Investor visas have long been a part of the UK immigration landscape, first appearing in 1994 before being brought within the old points-based system in 2008. This visa route hasn’t been universally popular and it was reformed in 2014 following a Migration Advisory Committee report and again in 2015.

The route has also made the headlines for its use by Russian oligarchs and concerns around the legitimacy of the funds invested. Following the Salisbury poisonings in 2018, a review of the visa category was confirmed. Spotlight on Corruption believes that over 6,300 Investor visas granted between 2008 and 2015 were being investigated. However, to date, nothing has been published. In December 2018, as ties with Russia soured, mainstream media reported that the route would be closed immediately. It did not. A further reform did follow in 2019 before the route was abruptly shut on 17 February.

Closing the route

Closing the route to new applicants solves none of the problems highlighted and such reasoning makes little sense. Those already holding the visa and currently under review won’t be affected by the route closure. In fact, the Home Office already has wide powers to refuse applications from these individuals including on the basis of the individual’s character, conduct, or associations or where the invested funds have been acquired unlawfully. The only people affected by the closure of the route are those looking to make an application now.

Home Office statistics published in November 2021 (for the first three quarters of 2021) suggested for that period, as applications started to recover following the pandemic, 211 investor entry clearance visas were granted. Of that, just 22 were made by Russian nationals. In that same period 22 applications were also made by US nationals. 51 investor visas were granted to Chinese nationals.

There were more concerning aspects around legal certainty of the UK immigration routes. The change to the Immigration Rules was published without warning at 4:04pm, taking effect four minutes earlier at 4:00pm rather than the usual 21 days later.

Relocating to the UK takes time and planning. It’s not something that simply happens overnight. Many potential investors would have been in the middle of preparing their applications and expended great cost in doing so, only to find out that the route is now closed with no current alternative category for applicants potentially until Autumn 2022.

As a number of other countries like the USA, Ireland and New Zealand offer similar investor routes, the UK could miss out on the global race to attract foreign investment.

Chetal Patel is a partner at Bates Wells. Matthew James is an associate at Bates Wells bateswells.co.uk