The recent dispute between the UK and Russia over the alleged poisoning of a former spy is likely to affect the number of wealthy Russians using the popular Tier 1 Investor visa to acquire UK permanent residence.
The Tier 1 Investor visa, which is the UK’s investment immigration program, offers permanent residence within six years to those investing at least £2 million. Those investing more can acquire PR faster with the shortest route offering the status in just two years. The latter option comes with a hefty price tag of £10 million.
UK Tier 1: Investment Requirements
|Apply for indefinite leave to remain after 5 years and 4 months||Invest £2 million in UK government bonds, share capital or loan capital in active and trading UK registered companies|
|Apply for indefinite leave to remain after 3 years||Invest £5 million in UK government bonds, share capital or loan capital in active and trading UK registered companies|
|Apply for indefinite leave to remain after 2 years||Invest £10 million in UK government bonds, share capital or loan capital in active and trading UK registered companies|
The Tier 1 Investor visa, like many of the world’s investment immigration programs, has proven popular among wealthy citizens of China and Russia.
While governments often have disagreements, this is probably the first instance of a country mulling the introduction of retrospective rules to target investment immigration applicants from a specific country.
The UK authorities have indicated they may apply money-laundering prevention rules, which came into force in 2015, retrospectively. Considering the data released by Transparency International which indicates more than half of successful investment immigrants in the UK between 2011 and 2016 were from Russia or China, the retrospective application of the rules are clearly targeted at a specific applicants.
Review and Reform
These rules may hit Russians because the Tier 1 Investor visa, prior to its review and reform in 2015-16, granted permanent residence against investment of just £50,000 into a business in Britain.
Further, applicants were not required to disclose the source of their funds. In fact, applicants were not even required to have a bank account in the UK as a part of the application process.
This resulted in a situation where the government would grant PR and banks would permit applicants to open accounts without any money laundering checks. The presumption on both sides was that the other party would take care of required due diligence. This encouraged many applicants to obtain PR through property investment, which could be used to fund criminal activities within the UK.
New rules introduced in 2015-16 – which included a significant increase in the minimum investment requirement – saw applications fall by around 85 per cent, which, according to critics, confirmed the view that such programs were being blatantly misused.
The roughly 700 Russians who obtained the Tier 1 Investor visa between 2008 and 2015 may now face action if they are found to be guilty of violating rules.
Action could include revocation of the permanent residence. This means applicants cannot presume their financial records and other details related to their investment immigration applications will remain free from scrutiny.
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