Investor visas: a cause for no concern.

Type the words ‘concern investor visa’ into a well-known search engine and a single news story is returned: “Concern grows over checks on ‘investor’ visa applicants”, a piece in the Financial Times by two ladies who are clearly deeply concerned. How deeply? Apparently not deeply enough to do any research.

The main thrust of the article is that the trickle of investor visa applicants to the UK has become a veritable tsunami of mainly Russians and Chinese flooding into lovely Blighty with their probably ill-gotten filthy lucre, since the investor category was (apparently) introduced in 2008. Just 43 in 2008, and a whopping 470 in 2012. All made worse by the fact that the Home Office does not check where these inscrutable orientals got the money from in the first place.

The authors fail to mention in their article the following:

  • The investor category was actually introduced in October 1994.
  • Applicants were required to show £1 million under his or her control and disposable in the UK, the intention to invest not less than £750,000 in bonds or UK-based company shares,
  • and to make the UK his or her main home – accommodating themselves without recourse to public funds.
  • Changes were made to the scheme in January 2004 allowing the applicant to rely upon £2m in assets and £1m in cash which could have been borrowed from an FSA regulated financial institution.
  • The current Points Based System (PBS) was introduced in 2008 with the objective of simplifying both the application and decision making process. The investor category was included, unchanged, in the PBS from the last quarter of that year.
  • Subsequent changes have included a ‘fast track’ to indefinite leave to remain for those prepared to invest larger sums of money.
  • Leave can be curtailed (visa cancelled) for those who fail to maintain their investment at the minimum required level.
  • A requirement that initial applicants provide evidence of the source of their funds was introduced in November 2012.

And their numbers are wrong too: under the new PBS, 45 investor visas were granted in the final quarter of 2008 alone. Prior to the introduction of PBS, the Home Office recorded numbers of innovator and investor visas as one. In 2008, 1,644 innovator and investor visas were granted.

Under the current rules, the applicant must show evidence of the source of the funds, which must also be held in a regulated financial institution. If they fail to make the required investment within three months of arrival, they will be unable to extend their visa at a later date, and risk having their leave curtailed long before that. It is true that the Home Office does not (and cannot) forensically examine the source of the applicant’s funds – they are interested in how it arrived to the account that it is currently in and that it is at the disposal of the applicant, whilst, presumably, like the rest of us, hoping that the financial institutions looking after those funds have followed the law and conducted due diligence. They do run background checks on all applicants.

According to the Office of National Statistics, 497,000 people immigrated to the UK in the year ending December 2012. Compare this number to the 470 investor visas granted in the same period. Those people brought at least £1m, each, to the UK. For the hard-of-maths, that’s at least half a billion pounds invested in our sceptred isle. A cause for celebration, surely?

The prize for alarmist non-story of the year goes to the FT.

Ian Clarke

Immigration Advisor

September 26, 2013

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