Qualifying Investments Under The Tier 1 Investor Visa

Qualifying Investments Under The Tier 1 Investor Visa

If you are looking to move to the UK (or already have) as a Tier 1 Investor then you are likely wondering which investments qualify under the route. Unfortunately, regular rule changes have meant investments which qualified in the past may not do so anymore. In this article, we are going to cover the rules as they currently stand for qualifying investments on a Tier 1 Investor Visa. We will look at which investments you can make as well as highlighting ones you may not, alongside the reasons for it.

What Counts As A Qualifying Investment Under The Tier 1 Investor Visa?

As a general rule, you must invest your money (either the £2m, £5m or £10m) in an active and trading UK registered company. This investment can be either in shares or loan capital. Previously you could invest in government bonds, but this option was removed under a revision in 2014 which meant government bonds were no longer a qualifying investment. You can, of course, sell shares as and when you please but you must reinvest these funds within the qualifying period. You are not allowed to withdraw these funds so you must keep them within your investment portfolio.

The definition of active and trading has been updated as of March 2019 to clarify the Home Office's position:

  • The business must be registered with Companies House
  • The business must be registered with HM Revenue and Customs for corporation tax
  • The business must bank with a UK based financial institution and are able to show a trading history should it be required
  • The business must have at least 2 UK resident employees who are not directors of the business

These rules were introduced to remove the option of Tier 1 Investors starting their own business as a front for the investment of their funds. This ensures the funds are therefore being invested correctly as per the visa guidance.

What About Property?

Unfortunately, you can no longer rely on property investment as a qualifying investment for the Tier 1 Investor Visa. The was previously an option until it was removed in 2014. If you are looking to invest in property, you could, for instance, invest in an estate agent - this is due to their principal business being in the facilitation of buying and selling property, and not property investment itself. Investment in property is such a no-no these days under this category you cannot even invest (as a qualifying investment) in a Real Estate Investment Trust (REIT).

If you currently have a property in the UK, you could sell it and use the proceeds as your investment capital. This is often the way people access the funds to apply for a Tier 1 Investor Visa as they are not allowed to use the asset as a way of doing so. If you do use these proceeds as your investment capital, you will need to ensure you keep all of the paperwork in case you are asked where the capital came from. These days the Home Office is more interested than ever in the sources of funds (due to anti-money laundering) as they are aware of many laundered funds being taken abroad and invested there. Therefore, you will need to prove where your funds originate from if you apply for the visa.

What About Government Bonds?

Unfortunately, you can no longer use government bonds as a qualifying investment for the Tier 1 Investor Visa. While this previously had been possible, it was removed in 2014. The reasoning for this isn't entirely clear but it appears the Home Office was trying to push the investments into the private sector rather than buying up government debt. The change was one of several changes made to the Tier 1 Investor Visa in recent years as the government try to refine the process.

Can I Still Buy Property As A Tier 1 Investor Visa Holder?

Tier 1 Investor Visa holders can buy their own property as long as the money is not taken from their investment funds i.e. if they have £2m to invest, they cannot buy a home for £500,000 and invest £1.5m. You will be able to use your own non-investment funds to buy a home but this will not be able to be used as part of your qualifying investment. Property purchasing is a tricky subject with the Tier 1 Investor Visa and you must be sure that you remain compliant when it comes to satisfying the qualifying investment criteria.

If you fail to invest your complete investment funds into a UK based business which is active and trading, you will not be compliant with your visa conditions. It is vital that you ensure that your money is invested as quickly as possible and that you do not try to withdraw any of these funds during your stay in the UK.

Getting More Help

If you need more help with the Tier 1 Investor Visa then please get in touch. Our immigration specialists can help you to allocate your investments so they qualify, as well as help with any other facet of the visa to help you remain compliant, extend your visa (if required) and be able to apply for Indefinite Leave to Remain once you have satisfied your minimum stay. The Tier 1 Investor Visa is one of the best options for those looking to invest, so contact one of our solicitors today and they'll be happy to help.

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