Tier 1 (Investor) - what counts as an investment?
As set out in our post here, there have been some recent changes to the Tier 1 (Investor) category.
Government bonds? Property?
Government bonds and property are not qualifying investments for new applicants. One important change on the 29 March 2019 changes was to remove the option of investing in government bonds for applications made on or after 29 March 2019. The 2014 changes and introduction of the £2m route had already removed the option for applicants to invest in property. This leaves only one investment option – investment into UK companies.
UK Registered Companies
Investment now has to be in active and trading UK registered companies, by way of share capital or loan capital. The £2m (or £5m or £10m) investment must be maintained over the grant of leave, and applicants are required to maintain the qualifying capital within their investment portfolio. It is possible to buy and sell investments, so long as capital is not withdrawn and the gross proceeds are re-invested in qualifying ways before the end of the next reporting period or within 6 months of the sale being completed (whichever is the shorter period).
The definition of active and trading UK companies has been updated in the March 2019 caseworker guidance. This guidance now sets out that:
UK companies will only be considered to be active and trading if they:
- are registered with Companies House in the UK
- are registered with HM Revenue and Customs for corporation tax and PAYE
- have accounts and a UK business bank account both showing regular trading of their own goods or services
- have at least 2 UK resident employees who are not their directors
Where UK companies are genuinely active and trading they would have to be registered for taxes and would be likely to have a business bank account. The ‘two UK resident employees’ requirement is new, and presumably to prevent investment into a company set up for the purpose of meeting the Tier 1 (Investor) rules.
With the Tier 1 (Entrepreneur) route now closed to new applicants (other than graduate entrepreneurs who still have a short time to be able to switch), and the newly opened Innovator and Start-up routes not allowing investment into existing UK businesses, the Tier 1 (Investor) route is now the only route by which non-EEA investors can move to the UK to be involved in existing businesses other than as employees. This will presumably have a negative effect on incoming investment to the UK as the number of applicants with £2m to invest for five years is far fewer than those with £200,000 to invest.
Contact Our Tier 1 (Investor) Immigration Barristers
For expert advice regarding an application for entry clearance, leave to remain or settlement as a Tier 1 (Investor), contact our immigration barristers in London on 0203 617 9173 or complete our enquiry form below.