The Golden Visa Scheme offered high-net-worth foreign individuals a quick route to residency in the UK, but concerns over the widespread abuse of the scheme have forced it to be disbanded.
Why was the scheme scrapped?
For some time, fears and concerns have been growing about how open the scheme was to abuse. Many believe the scheme allowed ‘dirty’ (illicitly or illegally obtained) money to be moved into the UK and laundered.
The majority of these concerns were related to Russian investments. Russian links to the UK’s financial system have been growing strong in recent years and many people in and around the UK Government grew concerned over the possible negative impact this may have on the UK.
In a statement, the Home Office said “while work has been done to reform the route in order to prevent abuse, the Home Office has acted to close it.”
What is the Golden Visa scheme?
The Golden Visa (otherwise known as the Tier 1 Investor Visa) allowed individuals who invest in the UK to live here with their family.
Golden visa schemes run in over 100 countries, with each nation having their own requirements for obtaining one. In the UK, they were offered to individuals who invested a minimum of £2 million; the more money an individual investsed, the quicker they were able to obtain permanent residency.
What protections were already in place?
Over the years, the UK Government made amendments to the scheme to help protect it from abuse. The amendments were often targeted at disrupting Russian efforts to invest their money in the UK. They included the introduction of extra checks on how applicants obtained their money, powers to confiscate property bought with unexplained wealth, and powers to freeze suspicious bank accounts.
The changes to the scheme were aimed at deterring and preventing so-called dirty money from being laundered in the UK. The UK Government currently has further plans to introduce powers that allow the freezing of assets that belong to individuals close to the Kremlin.
Unfortunately, the steps taken to halt the abuse of the scheme failed to do so. It was therefore the decision of the UK Government to put a stop to the scheme itself in order to stop the British system being abused.
When was the scheme dropped?
The Home Office announced the change on 17 February 2022. As of 16:00 on this date, the scheme was closed. However, people who currently hold a golden visa in the UK will be able to apply for extensions until 17 February 2026 and will be able to go on to apply for ILR until 17 February 2028. From the original announcement, however, obtaining residency in the UK via investment no longer possible. You can read the Home Office’s statement here.
In the UK, the golden visa was particularly popular amongst wealthy Russians. Since the scheme was introduced in 2008, the UK Home Office has issued over 14,000 investor visas to Russian citizens. As mentioned above, concerns over Russian investment were driving the calls to scrap the scheme.
It’s important to note that a lot of the investments made by Russian citizens have come from legitimate sources. However, there was concern about money laundering and corruption. Research suggests that many Russian investments in the UK have come from illegitimate sources, which has sparked concerns that the UK may be becoming a hub for money laundering, much of it facilitated by the golden visa.
The golden visa scheme has also allowed individuals close to the Russian government to accumulate £1.5 billion worth of UK property, with much of it being purchased in the city of Westminster. It’s thought this financial leverage could lead to undue influence on British governmental policy.
Concerns over Russian investment in the UK have been growing for some time, and have been renewed in recent weeks. The Russian Government’s continued aggression towards Ukraine, which has led to Britons there being told to leave, caused many to urge the UK Government to cut ties with Russia. The scrapping of the golden visa scheme will allow the UK to take a big step towards that.
Ready for assistance?
If you have any questions about the changes or want legal advice, contact
Woodcock Law & Notary Public today. Contact us by phone on 0330 133 6490 or
by email at email@example.com.