Only 44 people applied for the tier 1 investor visa from April to June, compared to 251 in the same period in 2014.
The first quarter of the year also saw a low level of applications, totalling 58 between January and March.
International professional development association STEP said the drop was probably the after-effect following the spike in applications at the end of 2014.
“Some investors rushed to get their applications in before the required minimum investment doubled to £2m ($3m, €2.7m) in November 2014,” it said.
“Nevertheless, the figures are by far the lowest since 2010, and may be the first sign that the progressive limitation of non-dom tax advantages […] is discouraging inward investment.”
Misjudged competition
Tax consultancy firm, Mark Davies & Associates, said the sharp decline could be caused by increased competition between the UK and other EU countries offering visa programmes, which also lead to an EU passport.
The firm pointed out that an applicant to Cyprus can have a full EU passport within three months, as opposed to the five-year commitment needed for a UK investor visa applicant. Meanwhile, places like Portugal demand a significantly lower minimum investment.
“I believe the government has misjudged the competition to the UK’s investor visa programme,” said the company’s managing director Mark Davies. “A successful investor programme has to be synchronised with tax policy.
Curtailing benefits
He said: “The taxation of ‘non-doms’ was topical in the lead-up to the General Election, culminating in George Osborne’s summer budget which proposed a radical change of rules to curtail the tax benefits for non-doms to 15 years.”
“It’s a shame that just as other jurisdictions are copying the UK’s remittance basis for foreigners, at the same time the UK is curtailing its tax system which had previously encouraged foreign investment.”
In June, the number of investor visa applications from Chinese nationals jumped to 1,580 applicants in 2014, compared to 507 in 2013.
