Why The U.K. ‘Golden Visa’ Leaves Britain Shortchanged
The number of people who received the U.K.’s exclusive ‘golden visa’ more than doubled last year, compared to 2018, creating almost $1 billion in foreign direct investment. However, many in the industry believe this money should be better spent.
A total of 360 people payed £2 million ($2.6 million) to receive the U.K.’s Tier 1 Investor Visa in 2019, over double the number that applied in 2018. An increase in both applicants and a doubling in price has meant the visa raised its highest ever investment in 2019: £720 million ($941 million).
However, most people applying to the visa put their £2 million ($2.6 million) into “safe” areas of the U.K. economy. Since the funds need to be invested to qualify for the visa, most opt for corporate or investment-grade bonds.
Last year, the U.K. Home Office excluded government bonds from the program in the hope of sending money to parts of the economy where it was more needed.
But this has not worked as expected says Farzin Yazdi, head of Investor Visa at Shard Capital. “There have not been a shift into high risk, small, or illiquid investments. This is mainly due to the fact that most applicants do not fit the suitability criteria, and the main objective is their visa.”
This is a waste, believes says Chris Kaelin, chairman of Henley & Partners, one of the world’s largest citizenship advisory firms. “This Tier 1 program here doesn’t really make much sense. It could do a lot more for the country.”
Published: 28 February 2020