Reformed Tier 1 Investor visa rules could be difficult to meet for some
Gone are government gilts and the 90-day rule, leaving the requirement to invest only in trading companies and the need to demonstrate control over assets for at least two years.
Increased paperwork may provide problems
The two-year rule could be difficult to meet for some legitimate clients as it increases the paperwork they need to provide.
Understandably the Government has removed the option to put money into gilts – they just sit there without doing much for UK businesses and the UK economy. However, the introduction of the need to demonstrate control over assets valued at £2m or more for a two-year period is troublesome.
Those with inherited wealth will have little or no problems meeting that requirement, but entrepreneurs wishing to invest in the UK may struggle. Assets are likely to have been used by a business or multiple businesses, particularly if growing rapidly, and this new requirement will increase the records such investors will need to provide to meet the requirements.
Also, in many cultures, assets tend to be held by a family rather than an individual, meaning there will be increased paperwork to be done.
Policing Home Office policy
The new rules, designed to combat dirty money entering the UK, also require assets to be placed into a UK bank with the bank completing all the background due diligence checks before an application can be made.
The Government is increasingly asking the wealth management and investment community to police Home Office policy. The rights and wrongs of this can be debated, but this is the reality.
I also have reservations as to how the Home Office will be able to deal with the significant changes to the Tier 1 Investor visa route. Given that the new regulations take effect on 29 March – the day we are supposedly leaving the EU – it is only likely to lead to serious delays. It does not give the message that the UK is open for business.