Lawyers doubt wisdom of scrapping 'golden visa'

Immigration lawyers are expressing unease over the wisdom of the UK government's abrupt decision to abandon the ‘golden visa’ route aimed at attracting multi-millionaire investors to the country.

Home Secretary Priti Patel announced on February 17 that the no more Tier 1 (Investor) visas would be issued because of the Ukraine crisis. She said the immediate closure of the scheme was aimed at “corrupt elites who threaten our national security and push dirty money around our cities”.

Visa halt could risk investment 

More than 12,000 of the visas have been granted since the scheme was launched in 2008, including more than 2,500 to Russians.But increasing numbers of immigration lawyers are expressing concerns that ending the route without proposing a new visa system for wealthy entrepreneurs risked stopping wealthy, legitimate entrepreneurs from investing in the UK economy.

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'Billions jeopardised'

Kyra Motley, a partner at law firm Boodle Hatfield, said the UK was jeopardising billions of pounds in overseas investment “because of a popular myth that foreign money is dirty money”.“On a conservative calculation, the investor visa scheme has brought in over £17 billion of investment into the UK over the last decade,” she said.“That is a substantial success. With the UK economy struggling to recover from the impact of Covid it seems very counter-productive to cut off wealthy overseas investors from the UK.“Almost every major economy wants to attract foreign capital and skills. Scrapping the investor visa will severely undermine the UK’s ability to do that."Ms Motley added that under new financial controls introduced in the UK two years ago it was now "almost impossible" for 'dirty money' to enter the country.

New visas for wealthy investors 

In an article by Kingsley Napley's Katie Newbury and Robert Houchill, the government's decision to close the scheme to new applicants "appears to have been a hot-headed moment responding to political tensions with Russia".They said that it was possible that new immigration routes being introduced by the government this year - such as the global talent and innovator visas - could present opportunities for wealthy investors to come to the country.But they added: "One of the most appealing features of the investor route was that individuals could invest money into the UK and did not have to work or have UK earnings."Following the removal of the investor category, the bottom line is that for those who wish to potentially acquire immigration status in the UK without working, there really is currently no longer an immigration category that provides the same level of flexibility."Gulcin Kashano, senior associate (immigration) at Teacher Stern, said it was currently unclear what changes the Home Office would be making to the immigration system to enable the UK to continue to attract these overseas investors."They (the Home Office) have, however, indicated an intention to reform the innovator route, a route that is already considered by many to not be fit for purpose, to hopefully attract higher value strategic investment in a way that is more beneficial to the UK economy and targets specific growth needs," she said."One thing that is clear however, is that it will no longer be possible to qualify for settlement or permanent residence in the UK by simply holding investments in UK-registered businesses." 

Stringent checks on funds likely

In a statement, Lewis Silkin said the Home Office appeared bent on reforming the innovator route this autumn. "Provisions will be introduced for individuals with a track record of investment activity abroad, and who can demonstrate credible plans to engage in qualifying investment activity in the United Kingdom," said the firm."A Home Office press release suggests that it will involve genuine job creation and other tangible economic benefits over and above passively holding UK investments. It is also highly likely that there will be stringent checks on the source of investment funds."

Read more news and views from David Sapsted.

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