There has been a 46 per cent increase in the number of the global super-rich prepared to invest £2 million (US$2.65 million) for the privilege of living and working in the UK despite Theresa May’s ordering a crackdown on a wealthy visa scheme to root out “illicit and corrupt” money flowing into the UK.
More than 400 very wealthy overseas investors applied for tier 1 investor visas in the year to March 31, a 46 per cent increase on the number of applicants in the previous 12 months, with Chinese continuing to be the most common applicants. The tier 1 investor scheme, widely described as the “golden visa”, allows visitors to stay in the UK for 40 months if they invest more than £2 million in the UK economy.
The increase in applications comes despite the government introducing tighter rules in 2015 requiring applicants to prove the source of their wealth. Earlier this year the Chelsea FC owner, Roman Abramovich, had his application to extend his tier 1 visa delayed as part of a government review of previously granted visas to root out suspect funds. There is no suggestion that Abramovich, who has a £10.5 billion fortune and is a friend of Vladimir Putin, has been involved in any wrongdoing.
The delay to Abramovich’s visa caused him to miss his Chelsea team lift the FA Cup, and he subsequently delayed plans for a £1 billion redevelopment of Stamford Bridge. He has since been granted Israeli citizenship and is understood to have withdrawn his UK visa application.
The then-home secretary, Amber Rudd, had ordered a review of the tier 1 visa scheme as part of a government crackdown on concerns that the UK was being used to launder money. “I have asked my officials to look what reforms we might continue with and also to take a look at previous ones over the past few years,” she told MPs in March. “I have asked them to look at the cohort of previous [applicants] to see if any action that needs to be taken.”
Research by Collyer Bristow, a law firm that advises the global super-rich, found that 405 people applied for tier 1 visas in the year to 31 March, up from 278 in the previous 12 months. The number of applicants from Russian citizens increased by 46 per cent to 52, Chinese interest rose by 26 per cent to 123. The biggest rise in applications was from Turkey, where the number rose 85 per cent to 24 following the government making it harder for Turkish citizens to apply for permanent residency.
James Badcock, a partner at Collyer Bristow, said: “Despite Brexit uncertainty, the UK is attractive to many HNWIs [high net worth individuals] as a place to live and invest in.
“For many overseas investors, the UK offers an international platform from which to grow their investments or businesses on an international stage. In addition to the financial and investment opportunities, the strong cultural appeal of the UK and London as well as its private education system attracts many overseas HNWIs.
“With political uncertainty surrounding investor visas in the US, a growing number of HNWIs are looking to move to and invest in the UK. However, some HNWIs may have concerns that the government could tighten visa rules after the formal Brexit date in March 2019 and may be looking to enter before then.”
There are more than 8,500 Russians listed as directors of UK companies, according to research by the accountancy firm Moore Stephens. Stuart Daltrey, a director at Moore Stephens, said the visa crackdown could harm the UK economy if Russians with legitimate businesses decide to relocate to other countries.
“Positioning the UK as an attractive location for internationally mobile entrepreneurs to set up and invest in businesses is vital to driving economic growth and creating jobs, so there is little sense in making it more difficult for them to do that.”