In the past, claims that the Tier 1 investor regime – aka "golden visa" – was being abused by Russians and others have been largely dismissed. A cluster of UK private client law firms and wealth managers earn fees from serving this market, so a ban or partial suspension would be unwelcome.

The UK’s Tier 1 investor regime, a channel of business used by wealth managers to onboard high net worth clients, could be shut down as soon as this week as the government seeks to turn the screws on Russia, media reports have said.

Sky News reported – citing government sources – that the visa scheme is to be shut down by Priti Patel, the Home Secretary. Other media networks carried similar reports.

Those who invest at least £2 million ($2.72 million) in the UK are offered residency through the scheme. The programme, which has run for more than 25 years, has been adjusted, sometimes in response to criticisms that it allows the rich to fast-track entry into the UK unfairly, or that it enables money laundering. Such “golden visa” regimes operate in a variety of countries, such as Spain, Portugal, Malta and islands of the Caribbean. 

The reports that the UK programme will possibly be scrubbed come at a time when the UK government says that it is putting pressure on Russian president Vladimir Putin as Russian military forces assemble on the borders of Ukraine. In recent years HNW Russians have been among the principal applicants for Tier 1 visas. Chinese citizens have also been prominent applicants.

Sky News quoted a government source as saying: "There are security concerns about this route and we have been considering closing it for some time. The Home Secretary is very conscious of the effects of money-laundering and dirty money in the UK and that's why she's pushing to close it. Legitimate applicants will be able to apply to come to the UK through other routes."

Kingsley Napley immigration partner Katie Newbury, said of the news stories: "We are clearly monitoring the situation in light of today's reports. Whilst the timing suggests any reforms might be politically motivated and designed to impact Russian investors using the scheme, in fact Tier 1 visas are used by many nationalities. We assist many US and EU-origin investors for example. The concern is that unless there is a ready functioning alternative for these entrepreneurs with money to invest, the UK will lose out in the long run. So we await Home Office guidance with interest."

Boodle Hatfield, the London-based law firm, said the investor programme has brought in more than £17 billion to the UK over the past 10 years.

“We ought to be trying to attract more such foreign investors not driving them away,” Kyra Motley, Partner of Boodle Hatfield, said in a note.

“It seems odd for the Home Office to shut the scheme, even temporarily, before any consultation and without publishing any statistics or other evidence of the misuse of scheme. Suggesting that the investor visa scheme is synonymous with corruption, money laundering and fraud is not at all accurate. Nor does it seem accurate to suggest that the Investor Visa scheme undermines national security,” Motley said. 

Claims that Russian oligarchs and those with illicit funds to spend have misued the visa programme have been dismissed. See a guest article here about the subject. 

(Editor's note: The market for such visa programmes waxes and wanes, but remains substantial. A number of jurisdictions, such as Canada, have mothballed their schemes in response to political pressures. In the European Union, member states such as Malta – it operates a golden visa programme – have come under fire for allowing a programme that is not allegedly tough enough on rogue players. Defenders say that they give small countries a useful revenue source, and provide a measure of protection for the kind of wealthy people who are targeted in their home countries. Some advisors on these schemes, such as Henley & Partners, have become significant wealth industry organisations as a result. One question in this fast-moving situation, which is unclear, is whether the UK will freeze the system for Russians, or for all applicants. We intend to update this story as more information comes in.)