Update 2022: Previously known as UK Tier 1 Visa. As of February 16th, 2022 the UK has scrapped its visas offering foreign investors fast-track residency implemented with immediate effect.
There really is no other country like the United Kingdom in the world. Its abundance in history and culture is simply unmatched.
Sure, it might not be located in the best climate zone if you’re the ‘sunshine and blue skies’ type. But it’s nothing that its excellent connectivity can’t fix.
In the world of investment immigration, the UK is a highly desirable country to gain access to.
In fact, we always highlight if a certain passport gives one a chance to travel to the UK visa-free when a client of ours is considering citizenship by investment.
Such is the appeal of the UK and its investor visa. This visa is one of the top three most popular investment programs in the world. It’s also one of the most popular in Europe, jostling with Portugal’s Golden Visa for the top spot in the continent.
Thinking this might be due to the low cost? Quite the contrary.
If you’d like to take the investor visa route, believe it or not, you’ll need access to at least £2 million in capital.
The alternatives – the innovator and the startup (or entrepreneur) visa options – are considerably cheaper, but can be quite tricky to figure out.
There is also the Global Talent Visa, which may be suitable for you if you’re an exceptional talent in the fields of academia, research arts, and culture digital technology.
These are all visa categories that you can avail of.
So, what is an Investor Visa in the UK? Is the United Kingdom worth the investment to start with? What are the three ways of gaining residence in the UK in 2022?
We’ll answer all of the questions that you might have about the Investor Visa in this article.
Why Choose The United Kingdom?
Let us cut to the chase.
We don’t think that many people could be on the fence about investing in the United Kingdom.
Hands down, it’s one of the freest, richest, and most stable countries in the world.
The United Kingdom is a key player in many global organizations, it has one of the best developed public services (e.g., healthcare and education), and offers its citizens a passport that’s ranked 19th in the world according to the Nomad Passport Index 2021 in terms of its travel power.
The quality of life is also top-notch. You simply wouldn’t have access to some of the world’s best cultural and sports events in, say, Malta or Cyprus.
The United Kingdom is a great place if you’re an investor who wants to actually live in the country that he invests in.
All that said, the post-Brexit uncertainty is still high and it’s bound to affect the country in many ways.
For example, critics say its passport rank will drop and its restricted access to the European Union market will make some investors think twice.
Still, the country remains one of the leaders in the investment immigration world.
And it’s great that it offers not just one, but a plethora of ways to gain access to its market.
Investor Visa – Three Routes
The UK has a long history of offering foreigners routes into the country, either for work or for investing.
For years, it has welcomed high-value migrants from both the EEA and further afield. However, as the public pressure mounted about European workers ‘taking jobs from the British,’ the immigration services discourse has changed.
Saturated with workers who come from poorer European countries, the United Kingdom has now scrapped many of its past visa programs.
Post-Brexit, it’s become all about wealthy investors, innovative entrepreneurs, and highly skilled workers.
And that’s great news for you as a high-net-worth individual – there are now three ways for you to become a resident of the United Kingdom, develop your business, and make capital gains in this huge market.
The first option is for investors. The minimum investment sum required is a lofty £2 million, although you can throw £5 million or even £10 million at the country to speed up the process of getting settled status in the United Kingdom.
Second, the Innovator Visa is all about having established business expertise and wanting to develop a business in the UK. You must have at least £50,000 in investment funds to apply.
Finally, if you have a brilliant idea for a startup, you can apply for a UK investor visa as well. Your idea must have an appropriate endorsing body by a local organization and have high potential.
Let’s talk about each of these options in more detail.
Visa for Investors
- Invest £2, £5, or £10 million in UK business shares
- Gain residence for 3 years, with a possible 2-year extension
- No knowledge of the English language is required
- Application costs of approximately $2,200
Are you a high-net-worth or an ultra-high-net-worth individual? Then, the Investor Visa for Investors will probably make the most sense for you.
This path to temporary residence in the UK is designed for those who want (and can) make a substantial financial investment in the country. We’re talking about at least £2 million in funds invested or more.
It sure is no small sum, but if you’re looking for a way to access not just the European Union but also the Commonwealth, plus a way to secure UK residency and even citizenship, this is the most straightforward way to achieve it.
And investors from all around the world have taken notice.
In 2019, the Investor Visa generated about £1 billion and had become one of Europe’s most lucrative Golden Visas.
Chinese applicants account for nearly half of all applications – no surprise there – and Hong Kong citizens came second. Brazilians, Americans, and Iranians are some of the other most prevalent applicants for the UK’s investor visa.
The Investor Visa is much like any other investor visa.
You’ll be expected to invest in companies that are currently active and trading in the United Kingdom. This is a choice if you’d like to invest in share capital or loan capital, based on your financial standing and goals.
But what’s up with the different investment sums, we hear you ask.
Well, your permanent residence (known as settled status or indefinite leave to remain) depends on it:
- Invest £2 million to gain permanent residence in 5 years and British citizenship in 6 years
- Invest £5 million to gain permanent residence in 3 years and British citizenship in 5 years
- Invest £10 million to gain permanent residence in 2 years and British citizenship in 5 years
Whichever option you choose, you must hold the entire investment for as long as your visa is valid.
Visa for Innovators
- Have at least £50,000 in investment funds
- Ideal for highly experienced business persons
- Get your business idea approved by a local organization
- Need to have sufficient funds to support yourself in the UK
- Prove you can speak English at a B2 level
You might have heard of the Entrepreneur Visa that the UK ran in the past. However, it has since been replaced by the Innovator Visa – a scheme that requires a lower capital investment, but also an endorsement of a business idea prior to an application being made.
So, who is it geared at, specifically?
If you’re a seasoned entrepreneur, then the promise of setting up shop in the United Kingdom, especially London, will probably seem very exciting.
An international hub for business and finance, the United Kingdom also has a vast and relatively wealthy market ready to jump at the next innovative product or service.
The Innovator route is perfect for those with lots of professional experience, at least £50,000 in funds available, and a business idea.
But it’s not just any business idea that the UK government is after. If it’s going to admit you to reside in the country, your idea must be:
- New. You won’t be able to invest in a business that’s already active and trading. Pretty self-explanatory really. If you want to invest in an existing business, your only option is the Investor visa.
- Innovative. Do you have an original business idea, unlike anything you’ve seen on the UK’s market? Inventive and original are the main keywords here; you need to demonstrate that you’ll have a competitive advantage.
- Viable. To be deemed viable, it needs to have a high potential for growth. And as for yourself, you need to have the business experience and management skills to successfully run a company.
You will need to approach an organization that would be able to endorse your business as all three of the aforementioned things before you’re able to apply for an Investor Visa.
Needless to say, this is a much more convoluted option to obtain this visa in the United Kingdom. It also takes a while to get your business idea approved.
However, if you have a really great idea that you’re positive you can get approved and don’t necessarily have £2 million to invest via the Investor route, then the Innovator one is still a decent option.
Visa for Start-Ups
- No minimum investment
- Have a brilliant and innovative business idea
- Need to prove you speak English
- Must have enough money to support yourself and your family members
Perhaps the most obscure of all three Visa options is the startup one.
Do you have an early-stage, but high-potential startup and are looking to start a business in Britain for the very first time?
You, an ambitious entrepreneur, are probably eligible to apply for a Startup Visa.
It’s very similar to the Innovator Visa, but here’s the curveball – there is no minimum sum that’s required for you to apply.
You simply must be able to show that your business idea is the next Netflix or Spotify, with endless potential to grow. It also needs to bring a wider benefit to the British economy.
Another unique thing about the start-up route is that you won’t be able to extend it; this visa does not lead to settled status, nor can it lead to citizenship directly.
You will need to switch to some other visa, like the Innovator visa, once your business is up and running. If that’s the scenario, the investment required for the Innovator visa of £50,000 would be waived.
Furthermore, unlike the investment option, you do need to prove that you speak English and prove that you have sufficient funds to support yourself while you’re in the UK.
That’s because you wouldn’t be able to draw on the local social security system if you fell on hard times.
And, as with the first two Investor Visa options, those applying under the Start-up route are able to bring their partner and any dependents under the age of 18.
Each family member will need their own visa application (and must pay the visa application fee, too).
The Pros and Cons of the British Investor Visa
There’s no need to go on and on about the key benefits of applying for an Investor Visa to live and work in the UK.
However, sometimes it’s easier to weigh up a decision that’s as big as this when you see it all clearly written out.
So, here are the main pros of an Investor Visa:
Straightforward requirements. Unlike many other countries in the investment immigration world, the UK has a long-standing tradition of welcoming foreign investors. Its government website is also crystal clear on the eligibility requirements, application procedures, and everything in between.
It’s fast. Obtaining your Investor Visa will take just a few months. The entire process can be carried out online too, which adds to its speed.
Bring your family. Under every Investor Visa option, you’re able to bring your partner and children under the age of 18 with no additional investment needed. What’s great is that you can be in a civil partnership, be married, or unmarried. Same-sex couples are also eligible.
A great quality of life. The UK is one of the best countries in the world to live, work, and study in. It offers unmatched cultural heritage and it’s very well connected to the world.
Attractive tax regime. High-net-worth individuals who are resident in the country but are not domiciled there can take advantage of a very flexible tax regime.
But there are some negative sides to the UK Investor Visa too:
Brexit. A lot of uncertainty remains when it comes to Brexit and the UK’s withdrawal from the European Union. Whereas there is no dire and imminent threat to most UK businesses, only more time will tell how the country’s economy changes in general.
Passport losing power. The British passport has dropped in the world’s passport rankings due to its withdrawal from the EU. Brits will need a visa or a visa waiver to travel to the EU.
Tax Implications of The Investor Visa
Every financial move that you make has tax implications. Investing in the United Kingdom and becoming its resident is no different.
The good news is that you won’t get taxed on the initial investment that you’ll need to make (for both the investor option and the innovator option). Still, you will need to pay tax if you make money from the investment or the business that you used to immigrate to the UK.
If you’re considered to be non-domiciled, you also won’t need to pay UK tax on income that you don’t bring into the UK. You must report any foreign income or gains of £2,000 or more.
In other words, the UK offers an attractive tax regime if you are a resident of the country but are considered non-domiciled.
And the really great news?
If you’ve spent a long time in the UK and wish to become a citizen, you’ll be glad to hear that being a taxpayer in the country isn’t a citizenship requirement.
This is great news because most other countries that offer residence programs (i.e., Golden Visas), require one to be a tax resident for a set number of years before you would be able to apply for citizenship.
Seeing what heights tax rates reach in countries like Portugal or Greece, you really wouldn’t want to be doing that, no matter what pros their respective citizenships would give you.
Obtaining British Citizenship
Depending on which Investor Visa option you choose and how much you invest, at some point, you’ll become eligible to apply for UK citizenship.
Of course, you don’t have to go for it, but seeing as British citizenship holds many valuable benefits, we’ll briefly discuss the eligibility criteria.
If you’ve applied for an Investor Visa, you can apply for citizenship in five years if you invest £5 million or £10 million.
Meanwhile, those investors who make do with the minimum sum of £2 million will need to wait an additional year.
Under the Innovator and the Start-up visas, you would become eligible for naturalization after six years.
The first step will be to obtain your permanent residence in the country (known as the ILR). You cannot have spent more than 450 cumulative days outside of the UK in the five years to apply for your ILR.
Once you hold your settled Investor Visa application status for at least 12 months, you’ll be able to apply for citizenship.
Note that for the 12 months before applying for citizenship, you cannot spend longer than 90 days abroad.
In addition to the time spent abroad restrictions, people looking to get naturalized will need to pass the Live in the UK test (not required if older than 65 years), and prove that they speak English at a B1 level.
Dual citizenship is allowed in the UK, so you won’t have to renounce your original citizenship to reap the benefits of becoming not just a citizen of the United Kingdom, but the Commonwealth too.
Investor Visa – Frequently Asked Questions
What are the three UK Visa options?
You can gain access to the United Kingdom and become its resident if you get the Investor Visa, establish a tech-related business, or launch a startup. Each of these three options has different eligibility requirements.
What is an Innovator Visa?
It is a visa that’s geared specifically at non-EEA business persons and entrepreneurs who are looking to launch an innovative business in the United Kingdom. It’s a route that doesn’t require a high initial investment – the minimum is £50,000 – but your business idea needs to be endorsed by a professional organization.
What’s the minimum investment sum required to obtain the Investor visa?
You must invest at least £2 million to be eligible for the Investor visa. The cheapest option is the Startup visa, as it has no minimum investment fund requirement.
How many days can I spend outside of the UK to apply for ILR (indefinite leave to remain, or permanent residence)?
You can spend no more than 6 months per year outside of the UK in 5 years. This means you should spend 6 months per year living in the UK, at a minimum.
What’s the best UK Visa option for me?
It will all depend on your personal circumstances and financial standing.
If you’re a high-net-worth individual seeking residence in the UK and have at least £2 million that you can spare, you should consider the Investor Visa route. It’s the least risky of all options and doesn’t have an English language requirement.
If you want to start or invest in a UK-based business and are tolerant of more risk, then the Innovator or the Startup option could be suitable.
What types of companies can I invest in if I choose the Investor route?
You should invest in an active and trading UK company. It must be registered with the Companies House in the UK, as well as registered with HMRC for corporation tax and PAYE. Additionally, it should have UK business bank accounts that would demonstrate regular trade of its goods and services. At least 2 UK-based employees who aren’t directors must also be present. You can invest in global companies with registered offices or a head office in the UK. Finally, should you want to invest in services relating to property, hotels, and construction, you’re free to do so.
How long is the Investor Visa valid for?
The visa is valid for 3 years and 4 months if you apply for it and are abroad. It’s valid for 3 years if you receive the visa while already in the United Kingdom.
How can I renew my Investor Visa?
Just before your visa is set to expire, you can apply to extend your residency for an additional 2 years. You will be able to extend your visa online.
Is there a limit as to how many times I can renew my Investor Visa?
No. You can renew your Investor Visa as many times as you wish.
How can I become a permanent resident in the United Kingdom?
Depending on which visa option you chose, you can apply for and receive ‘settled’ status in the United Kingdom.
Does the UK offer a citizenship by investment program?
As per the traditional definition of citizenship by investment, the UK does not offer any such program. One of the best routes to British citizenship is to apply for an Investor Visa, reside in the UK for at least 5 years, and apply to be naturalized.
Can I invest in bonds to qualify for an Investor Visa?
Unfortunately, you cannot. While the appeal of government bonds is logical due to their lower risk, you will need to invest in a business in the UK if you’d like to apply for an Investor Visa.
Can I use real estate to prove that I have funds to invest in the UK?
No. Only money in a bank account can be used as evidence of funds available to invest in the UK.
Can my family come to the United Kingdom if I obtain an Investor Visa?
Yes. An investor can bring their partner (married or unmarried), and any dependent children under the age of 18 without making any additional investment.
What are the endorsing bodies for the Innovator visa?
The government of the United Kingdom has a list of organizations that are authorized to endorse businesses for the Innovator visa applications.
What can I do under the Innovator visa?
You’ll only be able to work on your own business venture while you’re in the UK under the Innovator Visa. You cannot hold any other job.
How is the Startup Visa different from the Innovator one?
Startup visa applicants do not need to have any investment capital, they can work in companies other than their own business, and they cannot obtain permanent residence or citizenship. Normally, Startup visa holders switch to the Innovator visa after 2 years.
For decades, the United Kingdom has been one of the most highly regarded countries in the investment immigration industry.
It’s easy to see why.
A huge domestic market, access to the entire Commonwealth and the European Union (albeit with some restrictions post-Brexit), its rock-solid international standing, and many more factors make it a great place to invest, do business, and live.
Unlike other countries, the UK has so many years of experience in administering its Investor Visa program (in its current iteration, as well as in its past versions) that the process is one of the shortest and the most straightforward too, among G8 countries.
Its eligibility criteria are very clearly set out, its application process is effective and quick, and the outcomes of the Investor Visa applications are predictable.
The UK isn’t going to go discounting its Investor Visa scheme (unlike many other residence by investment programs or citizenship by investment countries have done due to COVID-19).
But we have very few reservations when it comes to investing and residing in the UK, even if it comes at a high price for investors. That is if it’s the right fit for your particular needs.
We’ve guided many of our clients through the process of investing in the United Kingdom, obtaining their residence in the country, and even becoming citizens.
Receiving expert guidance will be essential if you successfully apply for an Investor Visa. Plus, advising you as to which is the best route for you to take and avoiding delays is something that we’re well versed in here at Nomad Capitalist.
If you, too, are keen to find out whether this is the country that could unlock both financial and personal opportunities for you, apply to work with the Nomad Capitalist team today.