This is a joint article written by our Head of Immigration, Louis MacWilliam and our Immigration consultant, Jennie Chau.
As the stock market tumbles and tough new security laws are passed, Hong Kongers are faced with two major challenges. The first one is to find a safer place for investments and savings. The second, perhaps greater challenge, is to secure the option of a safe escape route for if/when the security situation deteriorates further.
With the UK’s Tier 1 Investor visa, we think you might be able to kill two birds with one stone. In this article, our UK immigration lawyers give an overview of the Tier 1 Investor route and provide a Q & A on the key issues, for Hong Kong residents considering a Tier 1 visa.
What is the Tier 1 Investor visa?
The Tier 1 Investor visa is for people who are willing to make a substantial investment in the UK, of at least £2 million. Given the relative high levels of wealth in Hong Kong, this will be open to more than an elite few.
To qualify for the initial visa, you will need to show you have at least £2 million, ready to invest in a UK company, which can include those listed on the stock exchange. You will need to have opened a UK bank account for the purposes of investing this money. The investment in the UK must be in the form of share capital or loan capital.
There is no requirement that you work whilst in the UK, nor that you get involved in the running of the business. There is no requirement you spend a minimum amount of time in the UK, unless you want to qualify permanent residency (known as ‘indefinite leave to remain’ or ‘settlement’). There is also no English language requirement.
Why is this option particularly attractive to Hong Kong residents?
This option may be particularly attractive to people in Hong Kong who have £2 million to invest, as it provides a relatively easy way to secure UK residency in the UK. Yes, there are some restrictions on the types of investment you can make, but you should be able to invest freely in a UK company with a good track record.
Unlike with every other UK immigration category, there are no residency requirements for the visa. There is no requirement that you spend a period in the UK, to qualify for a visa extension. You just need to show you have maintained your investment of at least £2 million.
You should be aware, however, that if you want to qualify for the right to live in the UK permanently then you are required to spend a minimum of around half of your time in the UK, as we explain below. But you are not obliged to apply for permanent residency, and can simply keep extending your Tier 1 visa, without having to meet any residence requirement.
You can invest in an existing UK company. There is no expectation or requirement that you establish a company or that you become actively involved in running a company, or even that you work in the UK at all.
This gives Hong Kongers the flexibility they need, making the UK a ‘safety net’ to fall back on, depending on how bad things get in Hong Kong.
What kind of visa do I get and does the visa come with restrictions?
If your Tier 1 Investor visa succeeds then you will initially be granted a visa valid for three years and four months. This can be extended, as many times as you need.
You are free to take employment with any company, or study, although as noted, there is no requirement to do either.
Can I bring my family?
Yes, you can bring as your dependents your spouse/civil partner or unmarried partner, as well as your children that are under 18. Free education is available for dependants from the age of five, and your children will be eligible to enrol as a ‘home student’ if they are studying further education courses, including GCSEs, AS and A-levels (and their equivalents), NVQs, GNVQs, BTECs and Access courses in England.
Do I have to spend a certain period of time in the UK on my Tier 1 Investor?
No, there is no residence requirement under the Tier 1 Investor. When it comes to extending your visa, after your initial visa expires, you will have to show you have invested your funds as promised, and maintained that level of funding, but there is no requirement that you spend a certain amount of time in the UK to be granted an extension.
However, to qualify for indefinite leave to remain there are residence requirements, as we explain next.
Does Tier 1 Investor lead to permanent residency?
Yes, the Tier 1 Investor route does lead to permanent residency (known as indefinite leave to remain or settlement). The standard route to settlement is five years if you have invested at least £2 million. However, this can be reduced to three years if you invest at least £5 million, and just two years if you invest at least £10 million.
However, crucially, you will need to show that you have spent at least 180 days in the UK in any 12-month rolling period during your qualifying period (whether that is five, three or two years).
You will also need to pass an English language requirement and demonstrate your knowledge of the UK through something called the Life in the UK test.
Do I need to invest before I get my visa?
No. You will normally need to make the investment within three months of you arriving in the UK on your Tier 1 visa. However, if you have already made a qualifying investment before applying for your visa, then you can rely on this investment provided it was made within the previous 12 months.
What is a ‘qualifying investment’?
You must invest in an ‘active and trading UK company’. This is a defined term but is by no means onerous; the company must:
- Have at least two UK-based employees that are not company directors
- Have a UK bank account showing regular trading of its own good and/or services
- Be registered with Companies House in the UK
- Be registered to pay corporation tax and PAYE
Previously, investments could be in government bonds, but since 29 March 2019 the investment can only be in shares or loan capital.
You must not invest through an offshore company or trust and you cannot invest in open-ended investment companies, investment trust companies or pooled investment vehicles.
What are the rules about the funds for investment?
The funds must be held by the main applicant or by their spouse/civil partner/unmarried partner. Funds must be held in a regulated financial institution and, if not already in the UK, be freely transferrable to the UK.
The general rule is that you must have held the funds as cash for at least two years. However, it is permissible to have held the money for a much shorter period, if you received the funds as from a certain source, including as a gift, a sale of business or property, or an inheritance.
Can I invest in property?
You cannot invest in companies that are mainly engaged in property investment, property management or property development. However, you may invest in construction companies themselves.
Can I invest in a hotel?
The principle behind that Tier 1 visa route is that business income must be generated from the supply of goods and/or services and not derived from the increased value of property or any income generated through property, such as rent.
However, the income from a hotel business would usually be generated from the supply of service, not merely rental income, and so a hotel is normally a permissible investment.
If I am making a loss on my investment portfolio do I need to top up the value and maintain the £2million throughout the qualifying period?
If at any time you sell part or the entire portfolio such that the price you paid for the retained portfolio is less than £2 million you must correct the shortfall of your investments by purchasing further qualifying investments before the date of the next reporting period. However, you are not required to top-up the value of your portfolio if the market value of your qualifying investments fall.
Can I go to the UK as a visitor or BNO passport holder and change into Tier 1 Investor?
No, you cannot come to the UK as a visitor, or enter as a BNO passport holder, and then ‘switch’ from within the UK into the Tier 1 Investor route.
It is possible to switch into Tier 1 Investor if you are already in the UK on another type of visa, such as a Tier 4 student or Tier 2 worker. However, for most, the application will need to be made from Hong Kong.
Are these visas easy to get? Can I apply on my own?
These applications are not straight forward and require a thorough understanding of the relevant rules and Home Office guidance. We are UK immigration law specialists and are highly experienced in dealing with these applications. We know what the Home Office want to see. We strongly suggest you contact us to see if you are eligible, and then let us do the hard work of making your application successful.
How we can help
We see this as an excellent option for Hong Kong citizens that can afford it. We have highlighted what we believe are the key features and requirements of the Tier 1 Investor route. However, there is a lot of guidance and rules to meet, and evidence to provide, to make a successful application.
Read more about our UK immigration services here.
We have a proven track record of getting our clients Tier 1 Investor visas. If you would like a free, no-obligation discussion with an expert in our Immigration team, then contact us today.