Investor-Based Immigration: Should the route be re-opened?

On October 10, 2024, it was announced that a new Minister for Investment has been appointed to bolster the Office for Investment as part of Labour’s broader strategy to address a significant shortfall in UK investment. The role has been filled by Poppy Gustafsson, the former CEO of Darktrace, a British technology firm valued at £4 billion. 

To enhance its effectiveness, Labour’s Government plans to expand the Office for Investment and establish a new Office for Investment Board, which will be chaired by the Minister for Investment. This board aims to provide strategic oversight and facilitate the mobilisation of government resources to attract investment into the UK. Prime Minister Keir Starmer lauded these developments, asserting that the upgrade ensures the Office for Investment is “fit for purpose” and equipped to position the UK as the premier destination for investment and an optimal environment for business, which is vital to driving economic growth and improving the lives of citizens.

Background and Closure of the Tier 1 (Investor) Visa Route

Despite Keir Starmer's ambition to position the UK as a leader in attracting investment, the Tier 1 (Investor) visa route remains permanently closed to new applicants. This immigration pathway had previously drawn overseas nationals willing to invest a minimum of £2 million in qualifying ventures within the UK economy. However, it was shut down in 2022 amidst concerns regarding financial fraud, highlighted by the Supreme Court case R (on the application of Wang) v Secretary of State for the Home Department. The applicant in this case had entered into loan agreements totalling approximately £112 million, which were exclusively directed towards Russian enterprises following the invasion of Crimea.

Emergence of a New Investor-Based Immigration Route

Despite previous governments' assurances to reinstate an investment-based visa route in the UK, no such pathway has been introduced since the closure of the investor visa. The tarnished legacy of the previous investor route has understandably made governments hesitant about its revival. Consequently, public support for this visa option has significantly dwindled. 

It could be argued that the introduction of a new investment-based visa could potentially stimulate overseas investment in the UK. Such a visa could attract individuals with substantial financial resources to invest in the economy, while also permitting them and their families to reside and potentially work in the UK. Policymakers would need to adopt a cautious approach in its implementation to safeguard against past financial abuses and to garner public support. Effective financial protections must be established to prevent exploitation.

While the concept of ‘golden visas’ may seem inherently elitist, the potential economic benefits for the UK could be worth considering, especially in the aftermath of Brexit and the COVID-19 pandemic.

For more information contact Mandeep Khroud and Ewan Collett in Irwin Mitchell's Immigration team