EDINBURGH — It has become increasingly difficult for individuals outside the European Union to live and work in the UK, with the notable exception of the rich. A commitment to spend millions on investing in Britain has ensured that wealthy individuals can secure a Golden Visa – a fast-track to residency and citizenship. But the programme, designed to stimulate economic activity, has proved more useful for money launderers, tax dodgers and shady operators than it has for the British government. It is going to make it much harder for the rich to gain a foothold in the UK. The New York Times reports on the changes, which sound a lot like the equivalent of Donald Trump building a wall to keep out high net worth individuals. – Jackie Cameron
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By Thulasizwe Sithole
The British government is preparing to suspend a special visa program that allows wealthy investors to fast-track their settlement in the country, part of a new drive to crack down on money laundering, The New York Times reports.
The Tier 1 visas will be suspended from midnight on Dec. 7 until the Home Office introduces tighter restrictions to tackle corruption and organised crime, says the US-based media outlet.
“We will not tolerate people who do not play by the rules and seek to abuse the system,” Immigration Minister Caroline Nokes reportedly said in a statement on Thursday.
Tier 1 visas, also called “golden visas”, provide a faster route for wealthy investors coming from outside the European Union and Switzerland to settle in Britain.
“The program was introduced in 2008 to attract wealthy foreign nationals willing to invest large amounts of capital in Britain. Billions of pounds have poured into London over the past decade, following an influx of global elites who have benefited from the program.
“It peaked in 2014, after 1,172 visas were granted.”
The visa program, continues The New York Times, has been especially popular among Russian oligarchs and wealthy people from China and the United Arab Emirates. More than 1,000 investment visas were granted in the 12-month period ending in September 2018, it notes
To qualify, foreign nationals must put down a minimum of £2m (about R36m or around $2.5m) as an investment in Britain.
“Such an investment in United Kingdom bonds, share capital or companies allows investors to apply for permanent residency within five years.”
Read also: Mauritius ‘golden passport’ scheme flagged on OECD blacklist
The more money investors put into Britain, the quicker and easier it is for them to gain a permanent foothold in the country. For a £5m investment, they can apply for permanent residency after three years; an investment of £10m can open the door to permanent residency after two years.
After that, the nationals theoretically could apply for citizenship, says The New York Times.
“The visa program has always had its critics, with anticorruption campaigners railing against Britain’s openness to ill-gotten riches from overseas and the foreigners who invest them. But it reached a fever pitch after a former Russian spy, Sergei V. Skripal, was poisoned on British soil with a nerve agent in Salisbury, England.
“Prime Minister Theresa May’s government signaled then that it would review the cases of 700 Russians who were granted visas to live in Britain under the Tier 1 visa scheme. Soon afterward, the visa renewal for the Russian billionaire owner of the Chelsea football team, Roman Abramovich, was mysteriously delayed. Mr. Abramovich later surfaced in Israel, where he had apparently immigrated under the law of return, which guarantees citizenship to any Jew wanting to move there.”
Golden Visa criticisms
In 2014, the government’s Migration Advisory Committee filed a report that said the scheme brought limited economic benefits because most of the investors had bought fixed-interest loan securities known as gilts, meaning that they were effectively loaning the government money instead of investing in the country, says The New York Times.
“While investors and their families spend money in Britain and generate revenue, the favourable impacts are typically exaggerated, the committee found. As the benefits were being questioned, the authorities grew concerned over the origins of funds being invested into the country.
“This year, the government introduced ‘unexplained wealth orders,’ forcing those suspected of serious crimes to explain the provenance of their wealth and assets.”
Britain has become a haven for criminals, with the National Crime Agency estimating that £100bn in “dirty money” was being funnelled into Britain each year, mainly from Russian, Nigeria, Pakistan and the Far East, according to The New York Times.
“After the visa program is suspended on Friday, the Home Office will conduct an investigation before reintroducing it with stricter regulations.
“Under the new rules, visa applicants will have to provide audits of all their financial and business interests using firms registered in the United Kingdom, and show that they have had control of their funds for at least two years, the Home Office said.
“Changes will also be introduced to increase the benefits of the investment to British companies,” it adds.
