As a part of ongoing reforms in the Tier-1 Investor visa program, the UK has decided to review more than 6,300 visas issued to investors between June 2008 and April 2015.
This move comes amidst recent controversies that forced Cyprus to suspend its citizenship by investment program and Malta to crackdown on violations of physical residence requirements by investors.
EU and Investment Immigration: Troubled History
Until Brexit, the UK was among a select group of countries that offered fast-track permanent residence visas to wealthy investors.
Due to the Schengen Agreement, golden visas offered by one member country of the EU grant, for all practical purposes, visa-free access to the entire EU for the investor. This was the primary reason why EU golden visas were so popular among investors and so controversial among other EU member states.
While countries with golden visa and investment immigration programs benefited, other EU countries remained concerned about potential national security, money laundering, and other criminal misuses of these programs.
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Regular Reforms and Focus on Better Due Diligence
Despite intense pressure from other countries as well as the European Parliament, EU countries have refused to terminate their golden visa programs. Instead, they have focused on continual reforms and improved due diligence to plug gaps in their investment immigration programs.
The UK Tier 1 Investor visa has been a target of criticism, especially for accepting investments without proper verification of legal source of investors’ incomes.
The Tier-1 Investor visa program was setup in June 2008 and the first batch of reforms was implemented by the authorities in April 2015 followed by another set of changes made in March 2019.
There was also a short-lived termination where the program was simply shut down before being revived in just a few days.
Changes introduced in 2015 and 2019 included:
- Banks and financial institutions to carry about additional due diligence checks prior to opening accounts of Tier-1 Investor visa applicants.
- Applicants were required to demonstrate ownership of at least £2m for at least two years prior to the application. Earlier, this period was just 90 days. Those not fulfilling this requirement had to provide detailed evidence of the source of their funds.
- Government bonds excluded from the list of eligible investments.
- Investors required to invest only in active and trading UK companies;
- Banks had to explicitly inform the Home Office of completion of all requisite customer due diligence and KYC checks prior to opening the applicant’s account
- General increase in documentary proofs to be submitted by those routing investments through intermediary companies.
Despite these reforms, concerns lingered over Tier-1 Investor visas issued prior to the reforms. The UK has issued around 9,500 visas since June 2008. However, more than 6,300 visas were issued between June 2008 and April 2015, which means two out of every three visas issued to date did not have to comply with the stricter rules related to legal source of funding.
Appropriate due diligence and proper Know Your Customer verifications are key to maintain the sanctity of any investment immigration program. While the review is certainly a good step, it remains to be seen whether it will result in any real change.
Considering the investors have been living in the UK for more than six years now, it seems unlikely this review will actually result in a Tier-1 Investor being stripped of their residence in the UK.