Global Migration Digest

April 2014 (Vol. 2, No. 3)

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www.aila.org 6 www.aila.org 6 by Jessica Churchman I n these challenging economic times, high-value investor migrants are a sought aer commodity and the UK government is keen to encourage investors to its country. e United Kingdom faces stiff competition from other nations that also wish to attract these investors—the most recent being from its former colony Malta, which has drawn heavy criticism for its controversial proposal to sell Maltese passports (and therefore EU citizenship) to migrants who invest €650,000. What is the Tier 1 (Investor) route? e Tier 1 (Investor) route has been in existence since the introduction of the UK's Points Based System in 2008, and provides a mechanism for high-value migrants outside the EEA to come to the United Kingdom provided they bring at least £1m and invest at least £750,000 in the country. e types of investments that the migrant can invest in have been restricted to UK government bonds, share capital or loan capital in active and trading UK registered companies. As there is a requirement for the investor to maintain a minimum level of investment throughout their stay in the UK, this has led to most investors choosing to invest in government bonds that are a safer form of investment. ere are currently routes for these investors to achieve accelerated settlement in the UK if they invest £5m or £10m (settlement being achieved in three or two years respectively). ere are strict residency requirements relating to settlement, and the investor must not have been absent from the UK for more than 180 days per year. Does the UK need to change its approach? Since 2008, the number of investors under Tier 1 has increased, but has remained relatively modest, with only 560 out of country main investor applications being approved in the year ending 2013 Q3. e majority of the investors are from Russia, China and the United States. In October 2013, the Migration Advisory Committee (MAC) was asked by the UK government to review the Tier 1 (Investor) route and to make recommendations on how it might be changed. On 25 February 2014, MAC published its response to its call for evidence on the Tier 1 (Investor) route aer consultation with various industry partners, including our associated UK office. e main recommendations were to: • raise the minimum investment from £1m to £2m (the £1m investment threshold has remained the same since the early 1990s); • relax the rules on permissible investments to encourage investments that may result in a greater wider benefit to the UK; • remove the requirement to have to top up the investment if the value of it has fallen due to market fluctuations; • relax the residency requirement for investors using the accelerated settlement route to 90 days per year; and • auction off accelerated settlement visas. Candidates would make sealed bids, with a reserve price of £2.5m (with £500,000 of this being donated to a specified good cause). What next? While the MAC report is advisory only, it is likely to be persuasive. e UK government is currently reviewing the report and is expected to announce changes to the current rules shortly. High value migrants rightly view the UK as an attractive place to reside because of, amongst other things, the rule of law, security of assets, and access to high quality education. Given that the minimum investment threshold may well double in the near future, we strongly advise any potential investor clients to contact us as soon as possible and to submit their applications without delay. Jessica Churchman is an Associate Solicitor at Laura Devine Attorneys LLC in New York. Major Changes on Horizon for UK's Tier 1 (Investor) Route

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