17 February 2022

The BCC has reported that a government source has confirmed reports of an announcement next week on the Tier 1 (Investor) route. It is being widely reported that the Tier 1 (Investor) route will be scrapped. Whether these rumours are true or not, we cannot yet say. What we do know, however, is that there are a lot of inaccuracies about the Tier 1 (Investor) route being published in the media. So let’s get a few points straight.

Fast track to British citizenship
The Tier1 (Investor) route is not a ‘fast track to British citizenship’ as some have reported. Tier 1 (Investors) are required to meet the same rules to obtain British citizenship as any other applicant. This includes the requirement that they must have resided in the UK for at least 5 years and must have held indefinite leave to remain (‘ILR’ – also known as ‘settlement’) for at least 12 months (unless they happen to also be married to a British citizen). So, a 6-year path for most, or 5 years for those who may qualify for accelerated ILR.

The Investor route does allow a faster route to ILR if the investment level is higher – but so do some other immigration categories, such as Global Talent and Innovator (both 3 years). The vast majority of Investors follow the standard 5-year route to ILR.

Origins of Tier 1 (Investor)
The route was not introduced by Labour in 2008 – it was introduced by the Tories in 1994. However, in 2008 it was repackaged as part of the so-called Points-Based System (don’t get me started on that). The core criteria were fundamentally the same however the evidential requirements were simplified – over-simplified, resulting in less rigorous evidence of the provenance of funds being required – subsequent reforms have sought to remedy this.

‘Golden visa’
Call me a pedant (you wouldn’t be the first), but it is not and has never been called ‘the Golden Visa’. More seriously, the abuse tail should not wag the compliant dog; the Tier 1 (Investor) route requires further amendment to screen out unsuitable applicants, not abolition affecting the compliant majority.

It is of course right for concerns to be raised about flows of illegitimate funds into the UK through individuals relying on this route, and indeed any other UK immigration route, however this should be dealt with through robust criteria, procedures and enforcement. The Home Office already has wide powers to refuse Tier 1 (Investor) applications, including where it considers that the funds have been acquired by unlawful conduct. It can also refuse applications where any of the money has been made available by another party, whose character, conduct or associations are such that that approval of the application would not be conducive to the public good.

This is in addition to the General Grounds for Refusal (applicable to almost all UK immigration categories). These include where the Home Office considers that it is not conducive to the public good to grant immigration permission, including by reason of the applicant’s character, conduct and associations. Before scrapping the route, it would be interesting to know how many times those powers have been exercised to refuse Tier 1 (Investors).

Source of funds
Under the current Rules, Investors are required to provide evidence from an FCA-regulated financial institution in the UK that they hold an account in the UK for the purpose of making the investment and that the bank has carried out all the required due diligence. They must also provide evidence of the source of funds (only if they have held the funds for less than 2 years). Whilst there have been reforms in this regard, more robust evidential requirements as to the source of funds, particularly regarding gifts, are needed.

It would seem appropriate to publish the long-awaited report on the operation of the Tier 1 (Investor) route, before decisions are made on its fate. In 2018, the government announced plans to suspend the route:. However, it subsequently did a U-turn. Instead, it introduced reforms to the route, which is perhaps what is needed in this instance.

Reform or removal?
The Tier 1 (Investor) route attracts a diverse range of international talent (eg business leaders, entertainers and philanthropists) attracted by the flexibility of the category, which does not tie the holder to a single activity/role like many other immigration categories. With the erosion of other independent routes (including the Tier 1 (Entrepreneur) – replaced by the barely fit for purpose Innovator route) the loss of the Investor route will impact the attractiveness of the UK to such talent.

See here for an overview of the Tier 1 (Investor) route.

Get in touch
To learn more about forthcoming changes to UK immigration law, see our website, contact your assigned LDI lawyer or email enquiries@lauradevine.com.