10 May Live, work and play in the UK: British permanent residence investment programmes
The UK is on the wish-list for many international investors, thanks to Britain’s thriving business landscape, exceptional education and enviable quality of life.
But it needn’t stay relegated to your wish-list.
Securing permanent residency in the UK is much easier than you think.
The two investment programmes we’ll look at below are very different, but both are attractive in their own right. Which you choose will depend on your personal circumstances and priorities, but the end-game is the same – the opportunity to live, work and play in the UK.
So why is the UK such a draw for the international community?
Why Britain? The business argument
The UK makes considerable effort to ensure international businesspeople find starting and running a company here easy. There are few barriers to entrepreneurship and minimal bureaucracy. So much so that UK-based businesses save nearly GBP 1bn annually from reductions in red tape.
The typical company takes only 13 days to set up, and only 48-hours to register. Once you’re established, you’ll pay only 20% corporation tax – the lowest in the G7 group (that includes Canada, France, and the US). You also only pay 10% tax on patents.
Day-to-day business operations are simple as well. The UK is known for a strong, flexible and well-educated labour market, the lack of which can be a major issue elsewhere in the world. The UK is also a fantastic location to build new relationships with partners and suppliers. Plus the country is set up for fast, effective R&D to help you develop new products – and has the infrastructure to bring them to market quickly.
Add the preferential trade agreements the UK holds with many countries plus the 500 million European consumers within reach from the UK, and setting up business here looks a very attractive proposition.
Why the UK – lifestyle and education
The OECD’s Better Life Index places the UK at 16th out of all OECD countries for a range of factors that include income, housing, community and education.
Education is also a big draw. Some of the best universities in the world are based in the UK, and draw huge numbers of international students. In 2016-17, over 2.3 million people were studying at higher education institutions in the UK. Nearly 135,000 of those were students from the EU, and over 300,000 were from non-EU countries. The 2017 student satisfaction survey noted that nearly 85% of students were happy with their course, finding plenty of opportunities to grow and apply their skills.
This quality of education directly translates into a better, brighter future for students – with over 90% of graduates in work or further study within six months of graduating. So if you – or your children – have big ambitions for the future, a UK education helps you build the skills, confidence and network to secure life-long success.
So what’s next?
Gaining UK citizenship is easier than you think, and investors have two possible options to choose between. Fittingly, these two options align nicely to the two major benefits of UK life – education, and business.
Investment Route 1: The InvestUK Education Bond: The InvestUK Education Bond allows international students to finance their education in the UK while qualifying for permanent residency.
It works by investing GBP 2m as loan capital into an active and trading UK company for five years. During that time, your money is used to fuel a diversified trading strategy while you get an thrice-annual ‘income’ equivalent to 4% base interest after fees, to pay tuition fees.
Investing here means you gain entry to the UK on a Tier 1 Investor visa, changing status from Tier 4 student visa. This means you can subsequently apply for Indefinite Leave to Remain (permanent residence) in the UK after five years.
After you gain permanent residency, you can liquidate your investments through the programme and get your GBP 2m back. Investors through the InvestUK Education Bond also benefit from a comprehensive work experience programme designed to help you transition into a fulfilling, exciting career. The Education Bond is designed around the needs of international students looking to genuinely build a life in the UK after graduation.
So there’s the summary. Let’s look more closely at your investment, because you have two options:
o The stability option: This option allows you to allocate your full GBP 2m investment in two parts – GBP 1m into UK Government Bonds, and GBP 1m into higher-yielding secured bonds. It’s these latter bonds that generate the 4% annual return, while the UK government bonds generate 0% annual return after management fees. This is the lowest return, lowest risk option – and you still get the benefits of permanent residency after five years.
o The opportunity option: This option sees you allocate your full GBP 2m into the latter, higher-yielding secured bonds at 4% annual interest. This means you would see a total GBP 80,000 annual income. This is the higher return option, although your risk profile is subsequently a little greater.
So what are these higher-yielding bonds all about?
They’re an investment into a special lending company known as a Lendco, which provides loans to finance projects within the UK property market. All loans are secured against property and other assets within clear parameters, so your money is well-protected.
Which investment option you choose is entirely up to you, but many investors are naturally drawn to the latter because of the returns on offer. In either case, you’re able to apply for permanent residency after five years and your education is funded during that time.
It’s also worth pointing out that this programme has no language, business experience or investment track record requirements. For international students who want to gain a world-class UK education with the added benefits of permanent UK residence after that, this programme is exceptional.
But what if you’re not interested in education?
Let’s look at the second investment option to secure UK permanent residence.
Investment Route 2: The Tier 1 Entrepreneur Programme: The UK Tier 1 Entrepreneur Programme is perfect for international entrepreneurs who want to set up a new business or invest into an existing business in the UK.
Essentially, you invest GBP 200,000 into UK business (or GBP 100,000 if you pair with another investor) and in exchange you’re granted a three-year entrepreneur visa. You then secure a two-year extension visa provided you follow through on your investment, you’re appointed company director, and your investment has created at least two full-time jobs for 12-months.
After five years, you then apply for Indefinite Leave to Remain as long as you’ve spent at least 184 days per year in the UK during those five years.
This programme has a lower investment requirement than the InvestUK Education Bond, but unlike the Education Bond you must speak English (to IELTS Level 4 standard). As noted, you must also take an active directorship in the business, so this programme is very interesting for businesspeople but wouldn’t be suitable for someone in full-time education.
It’s also worth pointing out, there’s an option to accelerate your path to permanent residency if your investment creates at least 10 full-time jobs or the company has a total turnover of GBP 5m plus.
This programme is perfectly suited to current or aspiring businesspeople who want to take advantage of the UK’s exciting business landscape. While English language requirements mean this programme won’t suit every international investor, it’s an exceptional option for many.
Turn big ambitions into a reality in the UK
The UK has much to offer prospective investors, wherever you are in life. These two programmes cater to the two main international communities that are drawn to UK life; students and entrepreneurs.
Both programmes are actively designed to attract international investment, talent and attitudes into Britain, to fuel growth and further the UK’s strong position on the world stage. Whichever you choose, you’re entering a symbiotic relationship perfect for any international investor with big ambitions for the future.