Ministers are halting a “gold-plated” visa scheme offering foreign investors a fast-track to settling in the UK, as part of a crackdown on financial crime.
Tier 1 investor visas were introduced in 2008 to encourage rich people from outside the EU to invest in the UK.
A £2m investment bought a visa and indefinite leave to remain after five years. But concerns were raised the scheme was being used to launder money.
Its suspension will end after an audit process is introduced, ministers say.
“We will not tolerate people who do not play by the rules and seek to abuse the system,” said Immigration Minister Caroline Nokes, announcing the suspension would come into effect at midnight on Friday.
“That is why I am bringing forward these new measures which will make sure that only genuine investors, who intend to support UK businesses, can benefit from our immigration system.”
More than 1,000 Tier 1 visas were issued in 2017 with the highest numbers going to Chinese and Russian investors.
The scheme previously required that applicants had a UK bank account and were of “good character”.
From next year, independent, regulated auditors will assess applicants’ financial and business interests and check they have had control of the funds for at least two years, the Home Office said.
Successful candidates have been eligible for visas lasting three years and four months, with two-year extensions available.
In 2011, the government hoped to attract the “brightest and best” by allowing investors to bring forward the date at which they could apply for settled status. Spending £10m in the UK cut the wait to just two years.
However, three years later, the Migration Advisory Committee said the scheme brought little economic benefit for British citizens because most applicants were buying gilts to qualify – so were effectively loaning the government money, rather than investing in the UK.
The Home Office said in future there will be a provision for pooled investments, supported by the government, to back projects with a “clear economic benefit to the UK” such as supporting small and medium-sized businesses.