The number of Arab millionaires investing in Britain in exchange for permanent residency has increased in the wake of the Arab Spring as investors look to flee political turmoil in their home country, financial advisors have told Arabian Business.
Rich Arabs are increasing making use of investor visas that allow wealthy foreigners to live in the UK in return for buying at least £1m (US$1.6m) of gilts or shares and bonds in British companies.
“We have seen a rapid growth of Middle Eastern clients investing in the UK and taking advantage of the UK immigration opportunities available under the Investor and Entrepreneur visa categories,” said Carl Thomas of Visalogic.
“We have served a significant number of Middle Eastern clients during the past five years, however, since the Arab Spring we have certainly seen a significant increase in new enquires from throughout the region,” he added.
The UK government introduced new visa regulations aimed at encouraging wealthy individuals to invest in the country in March 2011.
Under the new rules, foreigners that invest £5m are allowed to settle in the country after three years while those that invest £10m or more are allowed to settle after two years compared to a previous minimum requirement of five years.
Entrepreneurs are able to fast-track the process if they create ten jobs or turn over £5m in a three year period.
More than 400 people applied to use the investor visa scheme in the 12 months ending June, up from 331 people in 2011 and fewer than 200 in 2009, according to Home Office statistics.
The UK has long been seen as a safe haven for wealthy Middle East investors with London-based real estate a popular choice. Regional investors purchasing property in London increased four percent in 2011, according to property consultants Jones Lang LaSalle (JLL).
Middle East investors accounted for nine percent of sales in central London last year, up from five percent in 2010, making them the second largest group of foreign investors behind nationals from Asia Pacific, said JLL.
With property exempt from the regulations, many Arabs are opting to invest in government backed-bonds and companies with synergies to the Middle East such as renewable energy, said Mark Pihlens, CEO of Invest UK. An increasing number of wealthy investors from Syria, Iraq, Iraq and Egypt are attracted to the UK for its political stability, he added.
“The UK is safe politically with a very stable jurisdiction of law, it’s not far from the Middle East and the unlike the US, it doesn’t tax people on their worldwide income, which is an important factor. Another pull factor is the UK’s education system,” he said.