The United Kingdom’s popularity among rich Chinese individuals is on the rise.
Visa applications by rich Chinese to live in the UK jumped by over a third last year, as the US delayed granting visas amid trade tensions between the world’s two largest economies, according to a British private equity firm.
The number of tier-1 investor visa applications by high net worth individuals from China rose 32 per cent to 202 in the 12 months through September 2019, compared to 153 applications in the previous year, Growthdeck said. The Milton Keynes headquartered firm offers tax-efficient investment opportunities in UK businesses to wealthy investors.
Some 171 of the applications were from mainland China – a year-on-year increase of 38 per cent – and the remaining 31 from Hong Kong, it said, citing data from the UK government’s Home Office which oversees immigration.
A tier-1 investor visa or “golden visa” allows those investing £2 million (US$2.6 million) or more to reside in the country for 40 months, with the possibility of a two-year extension. Visa holders may also apply to settle in the UK after two years. However, rules that came into effect last April require applicants to prove that they have had these funds for at least two years. It costs £1,623 to apply for a visa.
“Fears that the UK’s investor visa programme would be pulled by the last UK government, and long delays when applying to the US, resulted in a surge in UK applications during 2019,” said Samuel Hu, head of overseas investors at Growthdeck.
The waiting time for Chinese applicants to become US residents through the EB-5 visa programme, which requires an investment of at least US$500,000, can be as long as 16 years, according to the US State Department. The US grants only 10,000 of these visas a year, and a cap limits each country to just 7 per cent of the total.
At the same time many Chinese investors took advantage of a fall in the value of the British pound, which has made UK assets cheaper relative to other countries such as the US.
A stronger British government following the decisive election of Conservative Prime Minister Boris Johnson in December – who is pushing for a definitive deadline to take Britain out of the European Union – has given investors greater confidence, said Growthdeck.
“The general election has provided greater certainty over the future of the UK economy and its tax regime. This certainty is important for foreign high net worths looking to diversify away from their home markets.”
The UK’s private education system is another reason super wealthy Chinese relocate to Britain, said Hu.
This comes in line with Hong Kong and mainland Chinese stepping up their interest in UK residential property. According to real estate consultancy Jones Lang LaSalle, the firm recorded about a fourfold increase in inquiries from Hong Kong investors for UK homes in the second half of 2019.
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