Brexit drama fails to diminish demand for UK investor visas from wealthy Chinese
Years of Brexit drama along with political gridlock have not deterred demand for UK investor visas from wealthy Chinese.
According to Home Office data obtained by private equity firm Growthdeck, applications from Chinese for Tier 1 investor visas jumped 19% to 144 in 2018 from the previous year. The number of applicants has nearly doubled since the 2016 UK Brexit vote.
Last year, 63 of the 228 applications were Chinese, up from 50% in 2017, according to Growthdeck. Hong Kong was in second place with 26%.
Early December saw the Home Office announce the temporary suspension of the visas to implement changes designed to tackle organised crime and money laundering. In less than a week, it backtracked, saying it had not imposed the freeze and did not explain why.
A Home Office spokesperson said in an emailed statement “All applications are considered on their individual merits. The Tier 1 route has been reformed to better protect the UK from illegally obtained funds and ensure only genuine and law-abiding investors can secure visas.”
Instead of discouraging wealthy Chinese migrants, the uncertainty may have actually inspired more applications.
Last year, Prime Minister Theresa May said that the government was reviewing the program considering Labour Party lawmaker Yvette Cooper’s questioning surrounding the origin of money from 700 Russians who were granted the visas. The number of applicants sharply declined in 2015 after the introduction by the government of anti-money laundering checks, as well as the doubling of the minimum investment for the permit to £2m.
Since the December reversal, last month the UK introduced changes which require applicants to prove that they have had command over the required £2m investment for at least two years, rather than the previous 90 days, or to provide evidence of the source of the funds. UK gilt investments are excluded.
Data show that applications from Russians dropped by 50% to 24 in 2018. The UK has been an attractive choice for wealthy Russians and a stable, safe place to conduct business, hold their wealth and provide education for their children.
This decline may be due to the government cracking down in the wake of the poisoning of former Russian double-agent and his daughter last year on British ground. Theresa May hit back by expelling dozens of people suspected of being spies. Russian tycoon Roma Abramovich was caught up in the debacle, his visa being denied renewal by the British government. He has since obtained Israeli citizenship.
The UK is still an attractive spot for other nationalities. The drop in sterling has made cheap UK assets and other areas of the UK’s economy provide attractive investment opportunities, according to head of overseas investors at Growthdeck, Samuel Hu.
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