On 7 March 2019 the Home Office released its statement of changes setting out proposed changes to UK immigration rules which come into effect on the 29th March 2019.
In summary, The Tier 1 (Investor) Scheme has been tightened up in several ways:
There is now a requirement for investors to provide evidence of the source of any investment funds they have obtained within the last two years ( currently 90 days ) If funds have not been held for this period then applicants will have to verify source of funding providing evidence to support their capital position. That does not change the substance of the rule per se but will lead to an increased paper trail and audit of the funding flow.
It does need to be reiterated that whilst the substance of the amended rule indicates that funds must be held for 2 years, it does not prohibit investors who have not held funds for the required 2 year period from applying. In the statement of changes at A28 :
In paragraphs 64 and 64-SD, for “90-day”, substitute “2-year” in each place it occurs.
This means that from 29 March 2019 the revised paragraph 64 will read as follows:
64. In the case of an application where Table 7 applies, points will only be awarded if the applicant:
(a) has had the money referred to in Table 7 for a consecutive 2-year period of time, ending no earlier than one calendar month before the date of application, and provides the specified documents in paragraph 64-SD; or
(b) provides the additional specified documents in paragraph 64A-SD of the source of the money.
It is therefore perfectly possible to apply for a Tier 1 Investor visa where the investment funds have been held for less than 2 years prior to the date of application provided that mandatory evidence of source of funds as set out in paragraph 64A-SD is provided as part of the application. This position is further supported by the fact that the Statement of Changes do not propose any amendments to the specified evidence of source of funds requirements set out in paragraph 64A-SD . It is merely a vouching and audit exercise where investors fall short of the 2 year period.
UK banks must provide confirmation that they have carried out due diligence on the applicant and source of funding. Presently applicants require to have a UK bank account so the changes result in additional ‘know your client’ checks from the financial institutions which must be affirmed before any application can proceed.
Applicants will no longer be allowed to invest in UK Government bonds unless their initial grant of leave was as a Tier 1 (Investor) Migrant under the Rules in place before 29 March 2019 . This is unsurprising as the Home Office had indicated that it regarded such investments as bringing no meaningful economic benefits to the United Kingdom. This change is therefore intended to incentivise investor visa applicants to make other forms of investment which have a greater need to attract additional investment funds.
New rules relating to the use of intermediary vehicles will be introduced to increase transparency with regard to the investment of applicants' funds who will require to be authorised by the FCA.
The definition of 'active and trading' UK companies is to become more rigid with redefined definitions. Evidence will be required that a company has a substantial presence in the United Kingdom which will include but not limited to registration with HMRC for all business purposes, Having at least 2 UK based employees who are not in themselves Directors , having a business bank account in the UK showing both regular trading of goods and services. See Para 65A .
Existing Tier 1 Investor Visa Holders
Transitional arrangements are being brought into place to ensure the above changes regarding 2-year source of funds checks, investment in UK government bonds, FCA regulation of intermediary vehicles and the definition of ‘active and trading’ companies do not have an adverse impact on investors who entered the category under the rules in place before 29 March 2019. These transitional arrangements will continue until 5 April 2023 for extension applications and 5 April 2025 for settlement applications.
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