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UK Urged To Overhaul Investor Visa Regime; Controversial "Auction" Idea Is Floated
Tom Burroughes
25 February 2014
In a move highlighting how a number of countries are bringing out visa programmes to attract wealthy investors, a body advising the UK government says would-be entrants to the country must put down more money to qualify, and advocates a new auction regime, dubbed by one critic as putting citizenship on "eBay".
Another law firm, Taylor Wessing, was more positive, but had reservations.
"Despite strong competition from other countries with comparable investment based visa schemes, the doubling of the investment level is unlikely to be a deterrent to high net worth individuals and their families who wish to live in the UK and enjoy all that it offers. The UK will continue to be an attractive destination for such individuals due to its political, democratic and economic stability together with our internationally renowned education and legal systems,” Sanjvee Shah, private client partner at law firm Taylor Wessing, said.
Withers, the law firm, urged interested parties not to jump to hasty conclusions on the committee’s proposals.
The Migration Advisory Committee, a body of the UK Border Agency, has called for current minimum of £1 million for an investment visa to be doubled to £2 million. In a potentially controversial step, it has also called for £5 million and £10 million investment visas to be scrapped and replaced with a premium route in which the government auctions a limited number of visas on a sealed bid basis, with a reserve price of £2.5 million. Auction winners would put at least £2 million into the UK economy; the excess would be transferred by the government to causes similar to those backed at present by the UK National Lottery.
In its 108-page document, the committee said that the standard minimum of £1 million for an investment visa has not changed for 20 years, during which time inflation has eroded the sum and therefore needs to be increased. The chairman of the committee, Sir David Metcalf, said the alleged benefits to the UK from the current programme were not self-evident; he pointed out that most applicants buy UK government bonds although there were few signs that such purchases were vital to the public accounts.
Under the idea of the blind auction proposal, incentives for investors to enter this blind auction would be faster permanent residency after two years rather than five years for all other investors, and generous absence limits which would allow these migrants to be outside the UK for up to nine months per year.
The issue of how the investor – and entrepreneur visa – programmes should be reformed to bolster the economic boost to the UK have been aired for some time. A number of countries, such as Spain, Portugal and Malta have rolled variations on the lines of such visas, although with certain differences and financial thresholds. The growth of a specialist sector focused on immigration advice to high net worth individuals has even spawned its own awards event .
Nick Rollason, head of business immigration at Kingsley Napley, said the auction idea will lead to an “eBay culture” for visas. “It will also leave a bad taste in the mouths of the British public,” he said.
Charlie Pring, immigration senior counsel at the same firm, added: "Any donation under the investor visa programme which supports good causes in the UK is to be welcomed. However, the danger for the UK government if it accepts the auction proposals under the MAC report is the risk of a perception that it is trading British citizenship to the highest bidders without proper controls, particularly when the EU has criticised Malta for selling its passports like any other asset.”
“It remains to be seen whether the UK Government implements all or any of the recommendations published today, but as the MAC has recognised, unless settlement and British citizenship for the successful bidder's family is also accelerated, there may be little incentive for foreign investors to go for the `premium’ option,” he said.
“It must be remembered that the report is just a set of recommendations from the MAC. There is no obligation on the government to implement any of them and the outcome will be driven by the political agenda. It does, however, give a clear steer to the government through the fog of self-interested lobbying by various stakeholders. What is also clear is that a lot of work needs to be done in developing the detailed policy relating to any changes that may be implemented, in particular the widening of the class of permitted investments," Philip Barth, Head of Immigration , said.
National and local government policy recognizes the importance of infrastructure projects to drive economic growth and social regeneration Infrastructure projects are a readily understood asset class by international investors,” Invest UK, an organisation working in the HNW immigration area, said.
This publication is seeking comments from other immigration specialists in this field – do email the editor at tom.burroughes@wealthbriefing.com