Note: The contents of this article are the author's opinion and have not been approved as a financial promotion.
Our latest research – covered by the likes of the South China Morning Post and International Adviser – shows that applications for Tier 1 Investor Visas by Chinese high net worth individuals jumped 54% to 83 in the first quarter of 2019, up from 54 in the fourth quarter of 2018. This number of applications (which comprises 73 from mainland China and 10 from Hong Kong) represents the highest quarterly figure since 2014.
The ongoing ‘trade war’ between the United States and China is discouraging high net worth individuals from China from living and investing in the US, which has made the UK an even more desirable destination for internationally mobile investors.
The weakness of Sterling has also made the UK more popular as an investment destination for wealthy Chinese entrepreneurs. As RMB is also relatively weak at the moment, many Chinese high net worths looking to diversify their investments overseas are focusing on investments in the UK.
A rise in internationally-mobile entrepreneurs looking to move to the UK is a positive development for the UK as it seeks to grow its economy post-Brexit, as business investment by high net worth individuals from overseas can make a substantial contribution to job creation and increased tax revenue.
Samuel Hu, our Head of Overseas Investors, says:
“The escalating trade wars are likely to see more high net worth individuals accelerate plans to move to the UK and invest.”
“When the weakness of both RMB and Sterling are taken into account, there are a lot of factors making the UK particularly attractive for Chinese entrepreneurs at present.”
“As the UK adjusts to competing internationally post-Brexit, investment from overseas entrepreneurs can be a powerful stimulant for the economy. Chinese investors in the UK build businesses, create employment and grow the treasury’s tax receipts.”
Recent uncertainty around the UK’s Tier 1 Investor Visa programme suggests that high net worth individuals in China should move quickly to make visa applications. Late last year the Government briefly announced the suspension of the Investor Visa programme, although it unexpectedly reinstated it the following week. Earlier in 2018, a review of Investor Visas granted to Russian individuals was also announced.
The US EB-5 visa scheme, a similar investor visa programme to the UK scheme, has been hit by falling numbers of applicants in recent years. It was reported in June that the wait for an EB-5 visa for a Chinese national is now 16 years, as each country is limited to only 700 visas per year. The minimum investment for an EB-5 visa will rise from $500,000 to $900,000 from November 2019.
Samuel Hu adds:
“The Investor Visa programme has served the British economy extremely well, but it may be vulnerable to changes in the UK political landscape. There is no guarantee that Investor Visas will be around in their current form indefinitely, so we’d encourage entrepreneurs in China to move applications forward now.”
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