The latest immigration statistics were published by the government on 27 August. Given the recent travel restrictions, there was a significant but unsurprising drop in the number of new UK visas granted in the twelve months to 30 June 2020, writes Charlie Fowler, senior associate at law firm Collyer Bristow
Still, there were some interesting subtexts to pick out of the general picture of migration stagnation.
One such picture relates to ‘high-value’ Tier 1 visas, principally represented by the Entrepreneur and Investor visa routes. According to the immigration statistics, the number of new high-value visas granted in that twelve-month period fell by 42% from the previous year.
Part of this decrease was naturally due to the restrictions caused by the global pandemic, but in fact it continued a decline in numbers that had started well before international borders closed and the government’s daily press briefings began.
The question is whether this downward trend will continue, or whether numbers will rise again to the levels seen in early 2019.
Requirements
By way of background, an Investor visa requires a successful applicant to invest a minimum of £2m ($2.67m, €2.25m) in qualifying UK investments.
What counts as a qualifying investment has changed in recent years, but broadly the visa holder can invest in share or loan capital of active and trading UK-registered companies.
The other main type of high-value visa was the Entrepreneur visa, through which someone could come to the UK to set up a new business here or join and invest funds into a UK business that was already up and running.
Both the Investor visa and Entrepreneur visa routes provide a pathway to settlement in the UK after five years, but where £10m is invested in UK businesses, settlement is possible after just two years.The number of high-value visas granted each year had been rising steadily since 2015, but the high-water mark came in early 2019.
Around this time though, the government introduced several changes to the immigration rules. For Entrepreneur visas, this route was closed completely for new applicants and was replaced by the Start-up and Innovator visa routes.
For Investor visas, the rules around qualifying investments were changed, not long after the government had caused confusion by announcing that it would be suspending the Investor visa route entirely before reversing this decision some 48 hours later.
Drop off
As a result, the number of high-value visas being issued started to drop off. No new Entrepreneur visas were being granted after the closure of that route, but Investor visa numbers tailed off in Q3 and Q4 of 2019 as well, ending the steady growth of the previous five years.
The question now is whether this marks the start of a general decline, or whether the numbers will pick up again whenever the covid-19 situation has improved.
Perhaps the decline in Investor visa numbers in the second half of 2019 was simply an adjustment following the rule changes that March. After all, the effect of the changes, principally, dropping government bonds from the list of qualifying investments, ought not to have had a hugely dramatic effect.
In any case, many successful applicants eschew the low-risk low-returns strategy of gilts in favour of potentially bigger returns from share or loan capital, especially where they can use their non-UK investments to balance their wider investment strategy.
Opportunities
Still, other options remain where the Investor visa route is not available. For example, entrepreneurs can navigate the Start-up and Innovator visa routes referred to above, or can (for now) apply for a Turkish Businessperson visa if applicable.
Alternatively, current or potential leaders in the relevant fields can apply for the new Global Talent visa, or anyone looking for long-term work can be employed by UK business holding a sponsor licence.
Brexit will have an effect here too: any EEA citizens not already in the UK by December will similarly need a job offer from a sponsor licence holder to be able to come here, though their position should be made easier when the government reduces the relevant skill and salary thresholds from January.
Still, UK employers should ensure that they have a sponsor licence in place by the end of the year in order to be able to access the wider workforce.
Despite recent figures, Investor visas remain an attractive route into the UK. Settlement is possible after just two years; visa holders can work or study in the UK with very few limitations; and the same applies to the main applicant’s partner and minor children, who can accompany them to the UK.
It’s too early yet to tell but, covid-19 aside, it will be interesting to see if the decline in Investor visa numbers at the back end of 2019 was an adjustment or whether it was the start of a new trend.
This article was written for International Adviser by Charlie Fowler, senior associate at law firm Collyer Bristow.
