As global wealth is on the increase, the UK remains an attractive destination for HNW individuals where investment from overseas is actively encouraged. Increasingly, HNW investors are looking for places where their assets and family will be safe. The UK Investor visa route has been around since the early 1990s and allows HNW individuals to reside in the UK in return for investment in certain prescribed investments such as gilts or UK equities.
Earlier this year saw the first major review of the Investor visa route since 1994. As a result, the Migration Advisory Committee prepared a report which will almost certainly lead to significant changes to the current Investor visa route.
The most significant change could be an increase of the minimum investment required from £1 million to £2 million. The current threshold has not changed since 1994 and this increase is based on earnings inflation.
In addition, it is highly likely that the current permissible investment options will be changed to permit wider investment activity in order to deliver greater and more tangible benefits to the UK economy. This would allow investors to make investment decisions as they would generally – based on a desire to maximise return against acceptable risk rather than artificial investments into bonds which create little benefit for the government or the investor.
These may come into force in autumn 2014 with the intention of attracting greater wealth and producing more tangible benefits to the UK from this route.
We act for HNW clients from all over the world who are entrepreneurial and have properties and business interests in many different locations. We have found that, should the investment options increase, our clients would have an appetite to invest in wider (even higher risk) investments which would be of a greater benefit to them and to the UK.
I have lost count of the number of clients, be it a prominent Russian business person or Lebanese art collector, who have said that the current rules simply do not fit the lifestyle of the international entrepreneurial set.
Our clients are usually time poor and cash rich and there is a very real desire to invest more in return for faster citizenship rights, and this potential additional investment could be channelled into bonds which support British business, regeneration and create employment. Our clients are often anglophiles with a genuine wish to make a significant personal and commercial contribution to the UK. These personal contributions include significant donations to UK charities and philanthropy which creates high social impact.
There is also a move to attract younger investors, especially those who are already studying in the UK and therefore already consider UK as their home and are integrated personally, professionally and culturally. The government have therefore recently reduced the minimum age to apply under the Investor visa route from 18 to 16 years of age.
Moreover, following an improvement in relations between the UK and Chinese governments in recent months, we have noted a substantial increase in the number of HNW Chinese immigrants coming to the UK, often by way of the Investor route.
As a result the UK has introduced VIP Mobile Visa Services in China, which provide the convenience of visa staff coming directly to them to collect the biometric data necessary for a visa, and a Super Priority 24-hour visa service, which will expedite the process for those who want to have a visa issued quickly. Chinese tourists will now also be able to apply for a UK visa, as well as a Schengen Area visa by completing a single online form.
The commercial and cultural opportunities that the UK affords, as well as a desire to own a piece of London real estate, are often cited as primary drivers underpinning this migration. Other countries are already falling over themselves to attract investors and their investments.
It will be interesting to see how the UK will respond to this competition for investors. For the UK to continue to flourish economically and be a major commercial player on the world stage, it is important that it remains open for business and an attractive option.
Sarah Gogan is an associate at Mishcon de Reya
(firstname.lastname@example.org, 0207 440 7482)