The Home Office’s failure to renew the investor visa of Chelsea Football Club owner Roman Abramovich has highlighted a potential threat to foreign investment in the UK.
It appears that delays on visa renewals for foreign investors could become the new reality with Brexit, with potential consequences for the UK economy.
Sources close to Mr Abramovich confirmed that the Russian oligarch was facing delays in renewing his Tier 1 Investor visa. The episode has signalled that extreme wealth and promises of investment do not automatically guarantee entry into the UK under the current environment.
Mr Abramovich has significant business interests in the UK, having contributed financially to Chelsea Football Club during his 15-year reign as owner of the club. He is also reputed to own a £90 million property in Kensington, and substantial assets in the UK.
The billionaire has recently moved to Israel and has been granted Israeli citizenship. He is the major funder of Jewish cultural activities in Russia and an active investor in tech start-ups and archaeology in Israel. As an Israeli citizen, he will be allowed to enter the UK for six months at a time, but will be unable to carry out any paid or unpaid work while in the UK.
He has responded to the delay by announcing that he has withdrawn his visa application for the time being, and has put on ice a long-awaited £1 billion redevelopment of Chelsea’s 113-year-old Stamford Bridge ground.
Mr Abramovich’s new UK visa application is the first he has made since Tier 1 visas came under fresh scrutiny four years ago, when more stringent checks on the source of investors’ wealth were introduced, and applications dropped by 84 per cent. A Tier 1 visa allows stays of up to three years and four months to people prepared to invest at least £2m.
But the stand-off reflects a wider crackdown. On 28 March 2018 the Home Office confirmed it was conducting a review of visas issued to foreign investors from 2008 to 2015, affecting thousands of high-net-worth individuals who currently reside, or have business interests in the UK.
Most Tier 1 Investor visas are issued to Russian and Chinese investors. Mr Abramovich’s visa expired at the end of April, just as the new regime was taking effect - and at a time of political tensions between the UK and Russia following the Salisbury poisoning.
immigration expert and senior associate at Irwin Mitchell Private Wealth, said: “It should come as no surprise that we’re beginning to see delays in renewing Tier 1 investor visas.
“Brexit works both ways. The UK voted for more control over immigration, and that applies to high-net-worth foreign investors as well as the headline-grabbing migrant population the media focuses on.
“Lately we have been receiving enquiries from these investors who want advice on what to do now that their business interests are being looked at with much more scrutiny than before.”
The Abramovich case could result in unintended ramifications for the UK economy. The Tier 1 Investor visas provide a lucrative flow of investment funding for UK businesses, so if difficulties were to arise in renewing or applying for visas, the UK could see a downturn in applications and as a result, less inward investment.
“It’s entirely possible that our economy will suffer as a result of this,” Mandeep added. “Less foreign investment into the UK would impact the UK’s ability to compete as a major player in the world economy.
“Visa renewals can be extremely complicated if there are multiple assets and corporate structures involved, so it’s important to get the application correct from the start. With Brexit making life even more difficult for them, foreign investors may just decide not to bother in the future.”
Published: 27 June 2018
A monthly briefing from Irwin Mitchell Private Wealth
Sign up to receive a moment of clarity June 2018
For general enquiries
0370 1500 100
Or we can call you back at a time of your choice
Request a call back
Phone lines are open 24/7, 365 days a year