Early April will see the start of new changes to the UK investor visa regime - and would-be applicants around the world must understand the fine print.

As some readers will know, the UK – along with a number of other jurisdictions – is adjusting its investment visa and entrepreneur visa regime in a bid to both attract more investment while not stirring up undue controversy. Tijen Ahmet, immigration solicitor at SA Law, a UK firm, explains the changes below. The views of the author are not necessarily shared by the editors of this publication but they are grateful for the opportunity to add these comments to the debate and invite readers to respond. This issue is being explained on this publication and its sister news channels because people from around the world, such as China and Russia, have applied for these visas in recent years.

Latest changes to investment visas from 6 April
Investment in the UK from overseas ambitious entrepreneurs is ongoing despite the November 2014 changes that doubled the minimum investment threshold to £2 million for those coming under the tier one investor route. The UK is evidently upholding its reputation of being the place to settle, offering a good quality of life, a world class education system and a tax system that is encouraging to the resident foreign national. Yet can we expect inward investment to be disrupted following the government’s changes to the immigration rules for tier one investors that will come into effect from 6 April 2015? There are four key changes to be mindful of when considering the UK’s position.

UK investment account before entry 
The first change, which is likely to have the most significant impact on prospective investors, is the requirement for investors to open a “UK-regulated” bank account before entry to the UK. Previously investors had a period of 90 days to invest funds in the UK after they had entered under tier one of the points-based system. This means there will need to be an element of forward thinking for the investor, who may need to visit the UK in advance to meet with wealth advisors to prepare.

Although the government aim is to ensure that banks are completing their due diligence checks before entry to the UK, for the investor this is an added pressure given that most banks expect evidence of a UK address before you can open a bank account. It is accepted that there are specialised products designed for foreign nationals that could act as an alternative, however the Home Office will need to provide succinct guidance on this to ensure that compliance of this requirement will work in practice. The expectation in the interim is that it will not deter high net worth individuals from coming to the UK.

Increase of minimum age
The second change is to the minimum age for tier one (investor) applicants, which is increasing from 16 to 18 years. This is likely to have minimal impact on the overall number of investors coming to the UK given that it is not normally the case that 16 to 17 year olds are wholly in control of investment funds in the first instance.

Guidance on the topping-up provisions
The third and most notable change relates to maintaining investment funds. Although investors will no longer need to “top up” their investment portfolio if they sell part of their investments at a loss, they will be required to maintain all of their capital within their investment portfolios.

Investors can continue to buy and sell investments on the condition that they do not withdraw any of the capital. If they sell at a loss, current proposals suggest that investors should have until the end of the next reporting period to buy a new qualifying investment. Further proposals indicate investors should be permitted to remove any income generated from their portfolio such as interest or dividend payments. These changes are intended to remove the inadvertent incentive for investors to invest in UK government bonds rather than UK companies.

Clarification on type of investment
The final main change is that there will be further clarification on the restrictions on investing companies predominantly concerned with property investment, development or management. This is to reflect the rules in place for tier one entrepreneurs.

Now the Home Office has published updated guidance on the tier one (investor) route, on the whole it is anticipated that April’s changes will encourage investors to buy a broader variety of investments to compete with Europe's flexibility and lower price tags for investment. The UK as a leading business location maintains its position by creating a range of highly attractive conditions for investment and we trust that these changes will drive the investor route and appeal to more high net worth individuals in the future.