Market for Tier 1 UK Visa Will Go Up as EU Nationals Lose Settlement Rights in the UK
The UK’s Tier 1 investor has always been granted to third country nationals outside the EU and EEA. European citizens having the right of settlement didn’t require a residence permit to remain in the UK. Now, the situation has changed, and Tier 1 may be targeting a new audience.
After the transition period expires on December 31, 2020, people from the EU will effectively become third country citizens. Only the Irish will retain the right of free movement due to Ireland’s direct treaties with the UK.
EU/EEA/Swiss nationals will be obliged to obtain a visa to work, live or study in the United Kingdom. The UK Tier 1 investor visas will now be issued to EU citizens as well. That is, EU investors channelling at least GBP2 million into the UK economy will have access to Indefinite Leave to Remain (ILR).
The question is if they’d be willing to do so. Affluent citizens of the EU and US have never been a target audience for the investment migration market. They have powerful passports and a high level of mobility. Europeans enjoy an opportunity to live in any EU/EEA state. They are not urged by the political or economical factors which is the case with Middle Eastern, CIS or Asian HNWI migrants. Hence, there were scarcely any stimuli for the EU or US citizens to engage into investment migration programmes.
How does Brexit impact the migration market?
US citizens have a freedom of travel, yet they’ve never had an inherent right to remain in the UK. From 2021 onwards, EU citizens will face the same issue. In this regard, the current US demand for the UK Tier 1 programme could be loosely extrapolated on the potential EU demand.
Last year, Americans made 7% of all Tier 1 visas, ceding ground only to the Chinese and Russians applicants. Given that the US is across the Atlantic and, say, France is just across the English Channel, we could expect ostensibly larger demand from European HNWIs.
Continental Europe boasts over 11,000,000 millionaires, which is more than China, CIS, the Middle East, Africa and Southeast Asia put together. Even a small fraction of this amount would translate into a huge number of Tier 1 applicants. The conclusion we may draw here is that the UK will experience quite an inflow of European capital.
A recent 2020 Wealth Report reveals that the number of affluent individuals residing in the UK increased by 3% in 2018–2019, from 2.17 million to 2.4 million. Between 2014 and 2019, the number grew by 19%.
The report predicts that the UK’s HNWI population will soar by an astounding 67%, up to 3.73 million, in the next five years. The only two sources would include an internal increase of wealth and an avalanche of rich foreigners. And these foreigners will not be coming from the third countries but from the European Union. The British HNWI ‘club’ has never enrolled so many members at such a quick pace in the past. Apparently, Brexit makes an enormous difference.
Where the global HNWIs will most likely purchase investment property in 2021? According to Knight Frank, in five out of ten regions involved in the survey, affluent respondents were inclined to buy an investment property in the United Kingdom. Based on the survey, the UK stands as the first or second most viable destination for real estate investment in eight out of ten regions.
The UK will offer international HNWIs a whole lot of perks, including non-dom status, safe property rights, common law and potentially lower taxes compared to Western European countries. At that, Europe will evolve from a secondary if not tertiary investment migration audience into a full-fledged market.
Astons is a leading global immigration advisory firm with offices in London, Beijing, Moscow, Dubai and Limassol (Republic of Cyprus) and offers residency & citizenship investment solutions worldwide including UK, Turkey, Vanuatu, EU & the Caribbean.
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