Investing In a Global Britain
Immigration acts as a great catalyst for investment,” says Rupert Gather, Chairman of InvestUK, a firm specialised in Foreign Direct Investment (FDI) into the UK economy. Over the past six years, more than 50% of investments facilitated by InvestUK have been motivated by the opportunity to obtain a UK visa. “We have helped around 300 clients to build their businesses in the UK, and the total value of those investments is well over £100 million. This has created a big contribution to the UK enterprise economy.”
Despite Brexit and Covid-19, the UK has lost nothing of its immigration and investment appeal, says Gather. There are three different investment migration paths for foreign entrepreneurs. Investors can choose between the tier 1 (investor) visa, the sole representative visa route and the UK Innovator Visa. All those programmes have an investment component in them, which ranges from £2 million for the tier 1 investor visa to £50,000 for the sole representative and the innovator visa route. “What unites these three programmes is that they are all related to active entrepreneurship,” explains Gather. “They are not designed as passive investments programmes. The UK government has decided that it wants to run these programmes specifically for the enterprise economy.”
The majority of InvestUK’s clients chose the innovator visa. “There was a big surprise in the market when the UK decided to discontinue the quite successful entrepreneur visa in 2019,” he admits. “However, once we started working with the innovator visa, we found that it’s a very good solution both for the client and for the country. It is focused on immigrants starting their own business, and 80% of our clients want to start their own business, while 20% of clients are looking for a UK company to work for or to partner with.” Under the innovator visa rule, the applicant’s business proposition is tested by an endorsing body, which reviews the business plan and makes a recommendation to the home office to either refuse or grant the visa. “If the visa is granted, in just three years the client will get permanent residence.”
More than Tech
To qualify for the innovator visa route, the business has to be innovative, viable and scalable. Innovation, Gather says, is often simply thought of as tech innovation, but it’s so much more. “We have clients that focus on innovation in the service economy, while others have come up with new ideas and processes for the manufacturing or education sector.” Viability is a bigger challenge. Applicants who wish to stay in the UK need to come up with a new business idea within a reasonable timeframe if the first one does not materialise. “Businesses generally do not fail if there is a good business plan, and the client is willing to invest sufficient funds to give the business a good start. Even though the government only requires a minimum investment of £50,000, we recommend a minimum of £200,000 in order to help manage the risks.” The third condition is scalability. InvestUK often introduces clients to local partners to help them gain specialist knowledge on how to sell their products in the UK market.
Gather says there are a number of geopolitical developments that are currently driving interest in the UK. “Firstly, there is Brexit, which in a way forces people to make a decision. Those that wish to stay in the UK are required to formalise their residency, and many are doing this though an immigration programme.” The second development relates to British Overseas Passport Holders in Hong Kong and the new visa route being announced for them. “This is actually a free visa route. But in reality, it has a lot to do with investment migration because people have to prove they have a job, and the simplest way to do that is to create your own job.”
The UK is also benefiting from new visa rules in Dubai, which is not renewing certain visas for people who have not established roles there as a result of Covid- 19. “There is a large cohort of South Asians – among them many accomplished business people – who now have to leave Dubai and are looking for an alternative base. For them the UK is an obvious choice due to cultural and business reasons.” In addition, InvestUK is seeing a spike in applications from Lebanon. “Lebanon is a small country but with very entrepreneurial people whose decisions to emigrate are primarily a result of Lebanon’s political instability.” Lastly, Gather says, the UK is the biggest destination for Chinese students in Europe. “Their numbers are in fact increasing because many are not going to the US, which is obviously a political decision. Some, not all of them, are interested in investment migration.”
Investment migration has not only to do with money but Gather points out that it’s also about permission from society to run those programmes. “I think it is absolutely vital that any migration programme maintains popular support so that government can explain to its people why it’s offering a programme that is a pathway to citizenship.”
There are many reasons why investment migration can make a meaningful contribution to society. Job creation, says Gather, is certainly the most obvious one. “But I think we can go further than this.” He points to a report published by the Female Founders Forum, which found that the UK’s economic potential is being held back by low rates of female entrepreneurship. According to the report, only 6% of women in the UK set up their own business – and for every female entrepreneur, there are more than two male entrepreneurs. Closing this gender gap could add billions to the UK economy, help make up for jobs that have been lost and potentially aid a faster recovery from the coronavirus-induced recession. “I am proud to say that 42% of the businesses that we facilitated were founded by female entrepreneurs last year.”
Gather is confident about the future and certain that the “UK will stick to its business-led immigration strategy”. This, he says, is an important element in the country’s Covid-19 recovery plan as well as its post-Brexit strategy ‘Global Britain’. This strategy signals that the country will not become inward-looking after Brexit, but on contrary will have global aspirations that go beyond Europe.
Interview with Rupert Gather, Chairman of InvestUK