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Tier 1 Investor (£2m) UK Visa

The Tier 1 (Investor) visa for investors with £2m, is a great option for

  • ‘Passive’ investors investing in listed equity and/or debt
  • Investors in unlisted businesses, including Venture capital / Private Equity investors backing early stage businesses, funding MBOs, or growth.
  • Entrepreneurs creating their own UK businesses

Investors are allowed to work1 and/or study, so it can also be an option for those with family money wanting to come to the UK. Students over 18 yrs old can use an Investor visa and thereby qualify for settlement relatively quickly.

The £2m can not be invested in property, or in a property development or management business. Investors are able to make such investments, but they must be in addition to the £2m.

Family members: The spouse/partner of an investor, and children under the age of 18, can apply to enter the UK as dependents of the investor. As the investor will need to limit their absences from the UK in order to have a visa beyond 5 years, some people choose to have their spouse as the ‘main applicant’.

This Guide covers:

  • Key Requirements
  • Types of Investment
  • Investing in your own / family business
  • Property & property businesses
  • Maintaining the level of Investment
  • The route to Settlement & eventual citizenship

Key Requirements of the Tier 1 Investor Visa

  1. £2m to invest2 held in a regulated financial institution & disposable in the UK3.
  2. Proof that the money is yours & under your control
  3. Proof of the source and that it is legitimate4.
  4. Having opened a UK bank account with the bank having carried out the required ‘Know Your Client’ due diligence checks
  5. Minimum age 18

The visa is also subject to the general requirements of

  • No adverse UK immigration history
  • Criminal record (or lack thereof) certificate from all countries where you have lived (spent 12+ months) in the last 10 years.
  • Medical certificate showing no TB, if applying from some countries

On Approval

An Initial Tier 1 (Investor) visa approval will be:

If the Application is made from abroad: 3 yrs 4 months

If the Application is made in the UK (switching from Tier 1, 2, or 4): 3 years

As long as you have complied with the visa’s requirements, you can then apply to extend the visa for a further 2 years.

  1. You must register with the Police on arriving in the UK, unless exempt. Those from China, HK, Russia, Israel, most Gulf, and South American countries need to register

  2. Within 3 months of approval (or, in some case, within 3 months of entering the UK), you must have at least £2m in qualifying investments. Flexibility on the 3months may be possible if the delay is due to unforeseeable events outside your control

  3. You must ‘maintain the level of investment’ throughout your time as an Investor (ie until you get UK settled status, or leave), and, when applying to extend, you must prove this with a series of investment portfolio reports produced by a UK regulated financial institution

Types of Investment

The Tier 1 Investor rules do not allow any of the £2m to be invested in (or through)

  • Property, property development, or property management
  • Investment trusts, Open Ended investment Companies, offshore companies/trusts
  • Pooled investment vehicles other than those which have also received funding/investment from a UK or devolved government department or agency.
  • Companies where the ‘eventual destination’ of the investment is outside the UK (investment in listed UK companies such as BP & GSK is permitted, notwithstanding the fact a large part of their operations are outside the UK)
  • Government bonds (March 2019 rule change: those with visas applied for before the change, can invest in Gilts)

We do not give investment advice, but can introduce you to possible advisors. We have observed that clients typically fall into one of the categories below:



Minimal Risk

These investors may have previously been tempted by UK government bonds. They are now looking for highly liquid listed securities, with the lowest possible volatility. They are prepared to accept low returns, even negative real returns, to minimise the downside. Given the modest total return expected, controlling investment management fees may be important.


Balanced Public

These investors may be looking for management meeting the tried-and-tested criteria: “An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return”5.


VC/PE (managed):

These investors are happy to entrust their capital to professional Venture Capital / Private Equity managers. They accept lock in-periods, and post lock-in illiquidity. Care must be taken regarding the funding of fees (see ‘Maintaining the level of investment’) & to ensure that investments are not structured in a way caught by the ‘pooled investment vehicle’ restriction.


Angel or other unlisted direct investment

Investors making their own direct investment in unlisted businesses are often successful entrepreneurs in their own right, and may require little, or no, assistance. Should it be required, we can

  • Check the compatibility of investments with the Tier 1 criteria.
  • Visit possible investee companies and report on what we have seen.
  • Provide draft documents.


Own business

We are able to help entrepreneurs who want to invest their £2m in their own business. We can help ensure

  • That the business meets the ‘Active and trading UK company’ definition BEFORE any of the £2m is invested
  • That the accountants carrying out the annual accounts preparation, and (if needed) audit, are aware of what you need to prove
  • Work with overseas suppliers/clients is structured to avoid the investment being deemed to have had an ultimate destination outside the UK.

Investing in your own / family business

Before the March 2019 rule change, investment could be in any ‘active and trading UK company’. Technically a new shell company with two transactions to its name (purchasing a pen, and then a pad of paper might be enough) could ‘tick the boxes’, although, arguing the case would probably involve spending rather more on legal fees than had been spent on the pen and paper.

Investors applying on or after 29th March 2019, must make loans or equity investments in companies which are:

  • Registered with Companies House in the UK;
  • Registered with HM Revenue and Customs for
    • corporation tax, and
    • PAYE
  • Able to show regular trading of goods / services, evidenced by
    • Transactions in a bank account that it holds with a UK bank, and
    • Entries in its accounts (de facto, in an accounting system)
  • Employing, in addition to its Director(s), at least 2 people based in the UK

We can provide clients wanting to invest in their own business with

  1. A ‘pre investment check’ that assesses the eligibility of a business & recommends changes, if any seem to be required for investor visa eligibility purposes, that should be made before the investment is made.


  1. A turnkey solution of a visa-suitable trading company with bank account, accounting systems, and staff. Such companies can be

    1. Fully transferred to you when you make the investment, with directors & staff resigning, and bank mandates changing, OR
    2. Serviced on an ongoing basis, with accounts, payroll, PAYE, VAT, etc filing being run for you in the background while you make the investment decisions.

Multinational companies that are registered as UK companies with either a registered office or head office in the UK are acceptable. However, for privately held businesses, there will be considerable scrutiny should the investment funds not remain in the UK. It may be that wholly legitimate and arms length transactions involve large payments to non-UK suppliers, but you should be prepared for searching questions if embarking on this sort of business. If you would like to discuss whether to make an international transfer, or about appropriate structuring / audit trail of documentation, we would be happy to advise.

Property & property businesses

The £2m ‘must not be invested in companies mainly engaged in property investment, property management or property development. ‘Property’ here is taken to be real estate, rather than other types of physical or intellectual property.

However, many investors want to invest in real estate There are several options that can be explored (it is important to get bespoke advice, please do not base actions on the outlines blow)

  1. Can ‘Mainly engaged’ restriction be interpreted as allowing a company to invest in property as a ‘non-main’ activity? There may be some room for manoeuvre here, but sailing close to the wind is dangerous.
  2. What about companies which have to invest a lot of capital into offices, warehouses, farmland, or other property? This may be acceptable where
    1. The property is then used to help the business sell goods and/or services
    2. It can be shown that the business is not generating income from the property by renting it out, and
    3. The property has not been developed to increase its value (where practical, it is simpler if one can arrange things so that one does not need to develop property included in the £2m, rather than having to argue that development has been done for reasons other than to increase the property’s value)
  3. There are several types of business that give considerable exposure to property without being deemed to be property businesses.
    1. Investing in companies that are mainly involved in construction is expressly allowed.
    2. Residential care home businesses, with property assets, may be acceptable.
    3. Hotels may be acceptable, BUT, given the typically low yields often achieved (at least at first), there can be particular danger when developing a hotel: the development will almost certainly increase the value of the building. Such investments should be considered particularly carefully. The dangers may be reduced where the business is your own, as details and documentation can be considered at each step, and are wholly under your own control. Investing in a company in this area that is controlled by someone else, can involve very high risk.
    4. Facilities Management & service companies, which do not manage property per se, but serve the owners/managers, may be an interesting way to gain returns linked to the property sector.

Maintaining the level of investment

Most investors want to establish the UK as a long term base, so it is particularly important to avoid disposal proceed use, income withdrawal, or fee/tax payments, inadvertently undermining the investment status. Those unconcerned with extension are still at risk of their visa being cancelled early if the investment is not maintained.

Market Fluctuations: The March 2019 rule changes have seen as welcome change in this area. Investments may now be carried at their purchase price, unless and until sold. This is a vast improvement for those investing in their own, or other unlisted, businesses, as it avoids the need to have frequent valuation reports. Further, the old rule requiring the investment to be ‘topped up’ to cover losses, has been removed for new applicants.

Disposal Proceed Use: Investors (and/or their investment managers) are free to trade as actively as they want, BUT, where any holding is sold (whether at a gain or a loss) the gross proceeds (the total from the sale of the portfolio, before any fees, taxes or other costs are deducted) must be re-invested in qualifying investments before the end of the next reporting period, or within 6 months of the date of completion of the sale, whichever is sooner.

Income Withdrawal: Most dividend, coupon, & interest payments generated by the qualifying investments can be withdrawn from the portfolio and used at the investors discretion. This freedom does not apply to interest or dividends deemed to be ‘part of the initial purchase’ eg when a share is ‘cum div’ at the time of purchase; the issue of bond coupons for not-yet-started semi-annual periods when the bond is purchased above par due to a relatively high coupon should be considered on a case by case basis.

Fee payments: Fees, whether for trade execution, investment management, or any other purpose, can not be funded from the £2m, or from the proceeds of sale. Where an investment manager deducts their fee automatically from funds under management, it is usually wise to invest more than the minimum £2m, so that repeated intervention / top-ups are not needed to prevent such fee deductions from jeopardising compliance with the visa requirements.

Tax payments: If investments are bought/sold, tax payments are to be expected, certainly for Stamp Duty (0.5% of transaction value) on share purchases, and probably on Capital Gains when disposing of an investment for more than its purchase price. These taxes must be funded from ‘new money’, permitted income withdrawal, or from initial investments in excess of the £2m minimum. They can not be funded from the profits of trading/investing the £2m: if you buy shares for £2m, and sell them for £2.2m, then you must re-invest the whole £2.2m and find other money to pay tax on the £200k capital gain.

The route to Permanent Residence & eventual UK Citizenship/passport

Permanent Residence

With a £2m investment, after a total of 5 years as a Tier 1 (Investor), Permanent Residence (‘Indefinite Leave to Remain’ / ‘Settlement’) is usually possible as long as

  1. The required investment has been made & maintained

  2. Absences from the UK have been not more than 180days per year

  3. English Language & ‘Life in the UK’ test requirements are met

A larger investment can allow quicker settlement

With £5m in qualifying investments, Indefinite Leave to Remain is possible after 3 years

With £10m in qualifying investments, Indefinite Leave to Remain is possible after 2 years

UK citizenship

After getting Indefinite leave To Remain, the next step may be able to apply for citizenship (which allows you to have a UK passport). This becomes an option after

  • 12 months with Indefinite leave To Remain

  • A total of at least 5 years residence (if you have gained accelerated ILR with a £5m or £10m investment, you will need to wait longer than 12 months from the ILR date)

  • Not having spent more than 90 days abroad during the year before applying

  • Not spending more than 450days abroad in the 5 years leading up to the application.

Applicants also need to have been physically present in the UK on the day five years before they apply. Ie if Applying on 3rd January 2020, you should have been in the UK on 3rd January 2015.

[1] Other than as a professional sportsperson, sports coach, or doctor/dentist in training.

[2] Or already invested in the prior 12 months & held in a UK regulated financial institution. This requirement usually rules out investments already made in an applicant’s own unlisted business.

[3] Ie not subject to exchange controls, sanctions, or other restrictions on sending the funds to the UK.

[4] If you have held the funds consecutively for the 2 years prior to applying, this is not mandatory. However, unless the funds are already in the UK, most banks will require such proof before accepting the funds.

[5] ‘Security Analysis’ by Graham & Dodd, first published in 1934