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Immigration

Golden Visas: Scrapped within weeks

Officials have announced that the Government is preparing to scrap UK Investor visas within weeks.

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Overview:

Sometimes known as “golden visas”, Investor visas allow access to the UK for wealthy foreigners who invest at least £2m in UK businesses. However, there has been a long-standing perception that the route is open to abuse for those looking to launder money, and it appears that the threat of a Russian incursion into Ukraine has expedited plans to bring the route to an end.

It is worth remembering that the Government did previously announce plans in 2018 to scrap Investor visas, only to row back from that position almost immediately. Instead, stricter rules were introduced in March 2019 specifically to tackle concerns over money-laundering and the source of funds invested, and a further review has been underway more recently.

Still, the perception has remained in some quarters that the Investor visa route is being exploited, in particular by applicants from Russia and China. After an understandable lull in 2020, 100 Investor visas were issued in 2021, of which 23 were granted to applicants from mainland China and 12 from Russia. Of the 56 Investor visas issued in the final quarter of 2019, 48% went to individuals from the same two countries.

The problem for the Government is that many Investor visa holders have, of course, acquired their wealth by legitimate means. They are happy to secure access to the UK by investing significant sums in UK businesses, at a time when inward investment is vital to an economy still coming to terms with Brexit and the impact of the Covid-19 pandemic. The concern for those individuals (and the family members they have brought with them to the UK), is what will happen to them if Investor visas are indeed scrapped. The expectation is that their rights will not be affected by any changes in the rules, but the latest updates from the Government must offer reassurance on that front.

More broadly, an overseas national does not require an Investor visa to invest in the UK, so the visas are unlikely to be the only means of laundering money through UK investment. However, the Government appears to be concerned that it has very little control over which individuals are able to use the visa as a route to UK residence.

Comment:

The Government is right to step up its efforts to tackle money laundering, and its drive for increased transparency is an important part of that work. However, hopefully, it will not be to the detriment of those who are not exploiting the system. One wonders whether, rather than reversing the Investor visa category, it can instead be revised to place greater requirements on applicants that ensure that only ‘clean’ money is invested in the UK. We await further clarification from the Government about what its intentions are.

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Charlie Fowler

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