28 Jan 2014 | 10:51 am | 3 min. read
- Over a third of investor visas issued in 2012-13 were to Chinese nationals - Number of visas issued to US investors more than trebles
There has been a 25% jump in the number of visas issued to wealthy foreign investors over the last year, fuelling investment in UK businesses and driving job creation, according to international law firm Pinsent Masons.
The number of investor visas issued has jumped from 423 last year to 530 this year*.
Investor visas are becoming an increasingly popular way for wealthy individuals to obtain UK residence. In order to qualify for an investor visa, the applicant must have at least £1m of their own funds, which must be invested within three months of arriving in the UK**. Unlike other categories of visa, individuals applying for an investor visa do not need to meet an English language requirement, and are able to bring their spouse and dependents to the UK to work or study. Direct investment in UK businesses creates thousands of new jobs every year.
According to Pinsent Masons, Chinese investors now make up the largest group of all successful applications, accounting for 32% of all investor visas issued this year. Investors from the USA received 12% of all visas issued.
Jill Turner, Senior Associate at Pinsent Masons, says: “High Net Worth Individuals continue to pick the UK over other major international cities as they seek a safe haven for wealth that they have usually worked very hard to build up.”
“The UK benefits from a very stable, liquid economy, and is free from any governmental interference in the assets of private individuals or any political instability. The UK government is also pro-business, with relatively low tax rates imposed on businesses and London has a reputation for being more welcoming of foreign nationals who benefit from the favourable tax environment.”
“By contrast, China and Russia, where so many of these investors now come from, has a fairly volatile stock and housing market that can make it a risky place to invest, and many of the Chinese investors who flock to the UK feel that their wealth is better protected in an democratic and transparent country.”
Jill Turner adds: “For US investors, the booming Silicon Roundabout is a major attraction. Many American investors have expertise in the IT and technology in their own country, and feel well placed to capitalise on the growing high-tech sector in the UK.”
Pinsent Masons adds that the number of investor visas issued to Egyptian nationals has nearly doubled in the last year, from just 10 visas issued last year to 19 this year.
Jill Turner explains: “The ongoing political and economic instability in Egypt has prompted many wealthy families to divert their funds into the UK.”
“The UK offers Middle-Eastern investors a settled lifestyle in a jurisdiction with economic and political stability. Investors with families are also allowed to bring dependent children under the age of 18 to the UK, where they can benefit from an education here. London’s existing established Middle Eastern community is also an attraction, as is the fact that unlike some other European countries, the UK does not impose any restrictions on the wearing of traditional Islamic dress in public.”
Pinsent Masons points out that even the recent announcement that the Government will be charging Capital Gains Tax on the sale of properties owned by foreign investors from April 2015; isn’t likely to discourage foreign investment into the UK property market.
Jill Turner says: “High Net Worth Individuals continue to be attracted to the UK to invest in property, especially at the moment with house prices and rents soaring. While the Capital Gains Tax levy may discourage some smaller investors from investing in UK property, the majority will not be put off by the charges.”
“With millions of pounds to invest in the UK, it seems unlikely that these individuals will be put off by a relatively low fee, especially as the benefits of investing here far outweigh the negatives.”
Number of investor visas issued by year (year ending June 30)
*12 month periods ending 30th June 2012 and 30th June 2013 – the latest information available.
** Must invest no less than £750,000 of their capital in the United Kingdom into Government bonds, share capital or loan capital in active and trading United Kingdom registered companies.
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