“Golden visas” that have been criticised for allowing the super-rich to buy the right to live in the UK are being suspended in a crackdown on money laundering and serious organised crime.
Tier one investor visas, which were introduced a decade ago to attract investment from outside the EU, have proved popular with Russian and Chinese applicants.
They allow anyone investing at least £2m in government bonds to work or study in Britain. For £5m, they can apply for indefinite leave to remain after three years, and for £10m it can be done in two.
The government previously championed the scheme as a way of attracting investment for the UK, but the Migration Advisory Committee cast doubt on the benefits for British citizens.
The Home Office said “sweeping reforms” would be conducted as part of efforts to prevent the visas being used for laundering illegally obtained funds and allow only “genuine” investors.
Caroline Nokes, the immigration minister, said: “The UK will always be open to legitimate and genuine investors who are committed to helping our economy and businesses grow.
“However, I have been clear that we will not tolerate people who do not play by the rules and seek to abuse the system.
“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 one investor visas were granted in the year ending September 2018.
The reforms follow a review of all tier one investor visas granted before April 2015, which evaluated the risk of organised and financial crime and national security threats.
More than 700 of the 3,000 visas examined were understood to have been issued to Russian investors.
The Home Office said the probe covered “all nationalities in the cohort” and its findings will be announced in due course.
The suspension will take effect from midnight on Friday and continue until new rules are in place next year.
The scheme previously required that applicants had a UK bank account and were of “good character”, but applicants will now have to provide comprehensive audits of all their financial and business interests.
The audits must be carried out by regulated UK firms who have no involvement with any qualifying investments or the visa application.
They will also be required to prove that they have had control of the required £2m for at least two years.
Investment in government bonds is being excluded in favour of putting money into active and trading British companies, and the government is trying to encourage projects “with a clear economic benefit to the UK”.
The changes are part of wider reforms to the visa system, which will see tier one graduate and entrepreneur visas replaced with “start-up” and “innovator” routes.