Today’s release of Q4 figures from the UK Office of National Statistics confirms what we predicted last week: The Tier 1 investor program’s approval volumes recorded a 40% year-on-year drop in 2020.
Only 52 main applicants, and 98 dependents, obtained investor visas in the UK during the October-November-December 2020 period. That represents a fall of nearly half compared to Q3.
For the year as a whole, the Home Office approved 216 main applicants, down from 360 in 2019. Presuming average investments of GBP 2 million per main applicant, the UK will have raised FDI worth GBP 432 million from the program during the year, although the true figure is likey 15-20% higher, as some applicants opt for the more expensive fast-track routes.
The largest source of investors in Q4 was Hong Kong, which contributed 10 of the 52 main applicants, followed by China (9), the United States (6), and Russia (5).
Rejection rates were also up considerably in 2020; 9% of applicants were turned away, compared to 4% in 2019.
The reduction in approvals is not limited to the Tier 1 investor category, explains Farzin Yazdi, Head of Investor Visa at London’s Shard Capital.
While investor visa issuances fell by 40%, “among all categories in the UK, there were just under one million visas granted in 2020, 69% fewer than the previous year,” he pointed out. Considering the harsh restrictions imposed on individuals and business in the UK during the last quarter of 2020 and the first quarter of 2021, Yazdi indicated that today’s low numbers are par for the course and that he expects a strong recovery.
“The decline,” remarked Yazdi, “is wholly expected and should surprise nobody. What’s more interesting at this stage is the road ahead through 2021.”
He highlighted the UK’s rapid vaccine rollout, the fastest among large countries, and said it would “resonate” with foreign investors. He also believes the now-completed departure from the European Union will work in the program’s favor.
“It’s now no longer possible to reside in the UK through EU treaty rights by acquiring an EU country’s citizenship, likely driving increased volumes of visa applications.”
A common theme in discussions of how the pandemic will change the investment migration market has been healthcare. Yazdi commented that he had observed concerns around healthcare and work practices take on a more salient role in the panoply of factors that motivate investors, but that conventional pull-factors remained at the forefront.
“The main motivation among Tier 1 (Investor) visa applicants is likely to still be education. As schools and, particularly, universities open up, we expect this to drive high volumes of demand among applicants. In short, despite a difficult 12 months, the UK continues to represent an attractive destination for migrants and we expect a significant bounce back in visa issuances as the year progresses.”
Christian Henrik Nesheim is the founder and editor of Investment Migration Insider, the #1 magazine – online or offline – for residency and citizenship by investment. He is an internationally recognized expert, speaker, documentary producer, and writer on the subject of investment migration, whose work is cited in the Economist, Bloomberg, Fortune, Forbes, Newsweek, and Business Insider. Norwegian by birth, Christian has spent the last 16 years in the United States, China, Spain, and Portugal.