For decades, the UK has remained at the top of global investors’ lists as a desirable location to invest in a stable and prosperous economy. Among the largest routes for high-net-worth individuals has been the investment visa UK, which normally goes by the name and official title of Tier 1 (Investor) Visa. This provided entry to live and work in the United Kingdom, entailing the opportunity of UK citizenship through an investment visa. However, in February 2022, the category was entirely shut down due to security concerns, thus putting many prospective investors searching for alternatives. In this perspective, one such is the increasingly popular Self-Sponsored visa in the UK. The guide explores the history of the Tier 1 Investor Visa, its closure, and options for potential investors
History and Closure of the Tier 1 Investor Visa
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The Tier 1 Investor Visa was conceived and developed to attract high-net-worth investors ready and willing to invest a sum of money in the economy of the UK. Investors will have the opportunity to invest at least £2 million in UK bonds, share capital, or loan capital in active and trading UK-registered companies and, from here, gain residency rights to further proceed for indefinite leave to remain and citizenship applications. The scheme was most attractive, not just for the benefits of investment but even more so for the accelerated pathway to UK citizenship by investment.
The UK government suddenly closed the Tier 1 Investor Visa route on 17th February 2022. As reported, the UK Home Office describes that this came after threats to security and possible patterns of ill use of the scheme for illicit financial activity purposes and money laundering. At this point, the majority of the existing applicants and prospective investors’ targets for their future in the UK had been availed with uncertainty, finding viable options to replace the opportunities that were closed because of its closure.
Reasons for the Closure
Concerns leading to the necessity for shutting down the Tier 1 Investor Visa had been due to increasing evidence of the fact that the route was open to exploitation. Further, it was investigated that persons involved in corruption and other serious crimes willfully were being admitted and rented to national security. The government has tried very hard to emphasise and repeat the idea that it wants to secure the integrity of the UK’s immigration system and make sure it is open solely to only those genuine investors who can contribute towards the economy positively.
Alternatives to the UK Investment Visa
Since the closure of the Tier 1 Investor Visa, several alternatives have been recommended by the UK government and immigration experts. These include the Innovator Founder Visa and the self-sponsored visa in the UK.
Innovator Founder Visa
The Innovator Founder Visa is intended for experienced businesspeople who wish to establish an innovative business in the UK. Applicants need at least £50,000 as investment money, and an approved body must endorse the business idea. The visa will give the holder a three-year stay with the possibility of an extension and lead to settlement.
Self-Sponsored Visa
Self-sponsored visas are fast becoming an option for those who ordinarily applied for an investment visa. The visa will let individuals set up and run a business or businesses without a sponsor in the UK. Self-sponsorship would entail setting up a UK business, sponsoring yourself to work as an employee, and then meeting some specified investment and making criteria.
Innovator Founder Visa Vs. Self-Sponsored Visa
Innovator Founder Visa
- Investment requirement: This type of visa calls for a minimum of £50,000 as an investment amount.
- Business endorsement: The unique business idea has to be endorsed by an approved body
- Validity: Three years and extendable leading up to a settlement
- Scope of business: Caters to new, innovative forms of businesses that have high growth potential
- Control: The body endorsing the business operations and business decisions may control.
Self-Sponsored Visa
- Flexibility of investment: The minimum investment is not specified, but it has to prove sufficient capital for the business.
- Business autonomy: The applicant must have arranged and sponsored the business in this category. Complete control of the company stays in their hands.
- Validity: It is granted for three years in the first instance but can be extended and may lead to settlement
- Business scope: This should be any viable business; hence, liberty is accorded to nearly every business manner and how one chooses to run it.
- Job creation: Must demonstrate that UK resident jobs and economic benefits will be created.
The Self-Sponsored Visa Route
Among these, a self-sponsored visa in the UK is the most versatile and vests complete control with the applicant. In most cases, this alternative is convenient for high-net-worth individuals to exercise absolute control over the investments and running of businesses.
Process of Getting a Self-Sponsored Visa
- Establish a UK business: The first step is to set up a business entity in the UK. This could be a limited company or another legal business structure.
- Sponsor yourself: As a business owner, you can sponsor yourself as an employee. This requires creating a job position that meets the criteria set by the UK Home Office.
- Meet financial and employment requirements: Ensure that your business has sufficient capital and can support the creation of jobs for UK residents, demonstrating genuine economic benefit to the UK.
- Apply for the visa: Submit your application, including all necessary documentation proving your business setup, self-sponsorship, and financial viability.
The self-sponsored visa is the alternative, a rather safer and tailored way to long-term residence and UK citizenship through investment.
Benefits of the Self-Sponsored Visa
- Autonomy and control: Among the most critical advantages of the self-sponsored visa in the UK lies in the degree of control accorded to the owner. Unlike the innovator founder visa, where the endorsing body may have a word on business operations, the self-sponsored visa gives entrepreneurs full control over business decisions and operations.
- Flexibility in investments: Unlike the Tier 1 Entrepreneur visa, the self-sponsored visa does not set any minimum mandatory investment—thereby leaving the business owner to his/her choices in investing his/her funds at one’s will. Such businesses have a more significant gain towards investing money in installments.
- Broader business scope: This visa route does not restrict itself to only innovative businesses; hence, it has a broader scope of business. It covers new and traditional forms of business ventures under self-sponsored visas.
- Direct control over hiring: Since the business owners are sponsoring themselves, they will be in a better position to directly control the employment of employees who capitalise on meeting the job creation criteria for their business strategy.
- Pathway to settlement: Much like the Innovator Founder Visa, the self-sponsored visa allows an individual an apparent path to settlement and eventually UK citizenship through investment. This makes it highly attractive for long-term residency.
Conclusion
The Tier 1 Investor Visa closure has undoubtedly changed things for many wealthy individuals who aspire to attain residency and UK citizenship through an investment visa. Alternatives, however, exist in the form of the Innovator Founder Visa and, more importantly, the self-sponsored visa in the UK. These can make viable routes for an individual looking to invest and live in the UK.
Given the complexities involved in these visa routes and their requirements, it cannot be stressed enough how important it is that any prospective investor seeks professional legal advice. Experienced immigration lawyers may help at any turn of an application process, comply fully with UK immigration law, and ultimately achieve residency status or citizenship.