Wealthy foreign businessmen are increasingly using Immigrant Investor Programs to gain permanent residency in the UK.
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Wealthy businessmen from Russia, India, Pakistan, China and the Middle East are increasingly turning to Immigrant Investor Programs to secure a second passport and residency in the UK. “Investor visas” allow wealthy foreigners to effectively buy the right to live in the UK in return for investing at least £1m of gilts or shares and bonds in British companies.
The most recent figures from the Home Office show that more than 400 people applied to use the investor visa scheme in the 12 months to the end of June. This compares with a total of 331 people in 2011 and fewer than 200 in 2009- representing a 50 per cent increase in applications in just three years.
Armand Arton, chief executive of Arton Capital, a global financial firm that advises wealthy foreigners on investing and financing solutions in Britain amongst other countries, said political instability in the Middle East, as well as demand from China and Russia had driven the spike. “People want to take out a second option, similar to an insurance policy so that if the need arises they are free to relocate with their children to the UK,” he said.
There is already a large expatriate community living within the UK, with more than half of the resident population of Westminster, Kensington and Chelsea – the prime real estate boroughs- being from overseas, with a high percentage from the Middle East according to Bianka Hellmich, senior relationship manager at Gherson Solicitors, a leading British law firm that advises on immigration in conjunction with tax and property acquisition as well as assets structuring.
Hellmich says that although her client’s business interests remain in their country of origin, there priority is to give their children the best possible education, whether that is in the UK or Europe.
“ Our clients recognize that the UK has a prestigious education system. Eton, Harrow, Cambridge, Oxford-these are all names recognized instantly worldwide and their children can benefit from this at a lower cost than a non EU student.”
She added: “Clients who invest in Britain are thinking long term and are planning for their retirement, they want to enjoy it between the Middle East, UK and Europe while at the same time maintaining a very beneficial tax status.”
As per new policies being implemented by the UK immigration authorities, the British government is to prefer foreign investors and entrepreneurs to all other types of migrants from non-European Union (EU) countries. Although the initiative is being taken to reduce the net migration rate in the country, wealthy foreign nationals are eligible to speed up the process by investing greater amounts. “Investments of more than £5m and £10m mean permanent residency could be gained within as little as two years,” said Arton.
Firms such as Arton Capital in collaboration with FSA regulated financial institutions, offer different financing packages that are designed to leverage the capital of the required investments. And it’s not just new arrivals that will be entitled to this “accelerated settlement” – investors who are already in the UK and want to increase their investments will be able to benefit from the changes as well.
There is no language requirement for the entry clearance to be granted and increased flexibility means that the number of days that investors can spend outside of the UK has risen from 90 to 180, without impacting on their right to residency. “This level of mobility, together with the close proximity of the UK to the Middle East and the convenience in travelling from the UK to the rest of the world is seen to be crucial for investors, who tend to need to travel a lot,” noted Hellmich.
“People want to take out a second option, similar to an insurance policy so that if the need arises they are free to relocate with their children to the UK.”