Many international investors see the UK is seen as a solid place to invest their funds. Why is that and what are they able to invest in? Let’s find out.
Why invest in the UK?
Compared to many countries, the UK offers a politically and financially stable environment. London is second only to New York in the Global Financial Centres Index, which ranks the 119 largest financial centres in the world. It is also the top destination for foreign direct investment in Europe.
As well as being an established and profitable investment location, the UK provides other benefits that are of interest to foreign investors. Some visas, such as the Start-up visa and Innovator visa, link residency with entrepreneurship and investment. As such, it may be possible to link investing in the UK with living there, though doing so involves meeting a range of criteria.
There’s certainly plenty of innovation taking place in the UK right now. Toyota Motor Manufacturing UK recently demonstrated this by securing funding for its efforts to develop zero emission technologies for the commercial vehicle market.
Who can invest in the UK?
The UK is an open, welcoming environment for investors. Foreign nationals with sufficient capital can invest in the UK; there are no legal restrictions in place to stop them doing so. Nor are there any residency requirements linked to investment. Investors do not even need to visit the UK before they invest.
What kind of investments are available?
The UK is home to a huge range of investment opportunities, including investment in private companies, local enterprises, transportation projects and whiskey. These are just a few examples of the myriad opportunities available. Let’s look at some of the most popular investment types in more detail.
Property investment in the UK can deliver just the combination of passive income and high yields that many investors are seeking. Foreign property ownership in the UK is a well-established investment option, with foreign owners already accounting for £90 billion worth of property ownership in England (£45 billion of it in London).
There is no requirement for property owners to reside in the UK. However, they will have to complete some paperwork, including providing proof of their address, funds and identity. For the latter, using online translation services can be a big help with meeting requirements around official certificates and documents as part of the property investment process. Using professional translation services means that investors can ensure all documents are of sufficient quality. Using a translation agency can thus deliver both practical assistance and peace of mind.
High interest current accounts
Investors who simply want to keep their money safe in the bank have the option to open a high interest current account in the UK. Interest rates and acceptance criteria differ from one bank to another, so investors should shop around for the best rate before committing to a particular institution and account type. Those investing in high interest current accounts from overseas are again likely to need the services of a reliable translation agency as they complete Know Your Customer checks to prevent fraud and money-laundering.
Bonds are another popular form of investment in the UK. They are essentially a loan to the government, at an agreed rate of interest. UK government bonds are known as gilts and are widely seen as a low-risk form of investment.
UK bond investment opportunities include conventional gilts, index-linked gilts and gilt STRIPS (Separate Trading of Registered and Interest Principal Securities). Investment in gilts is for a fixed period, usually between five and 30 years (though the government has also issued 50-year gilts and 55-year gilts recently).
Gold and other inflation-beating investments
Gold and several other investment forms are, at the time of writing, attracting many investors due to their inflation-beating potential (which is based on historic returns). Energy stocks, commodities and exchange-traded funds (ETFs) all currently fit into this inflation-beating box.
While the UK presents many viable and profitable investment opportunities, investors should always remember that investments can go up as well as down. This article should not be construed as investment advice – anyone seeking such advice should connect with a suitably qualified and registered financial professional.
That said, investing in the UK can be an immensely profitable venture. The country is home to both short-term investment opportunities and longer-term ventures, with a range of risk profiles that can suit any investor’s needs.
The UK welcomes investors from across the globe, though there will be a need to use professional translation services to ensure paperwork is in English for certain types of investment. Some types of investment-linked visa also require that the investor prove their ability to read, write and speak English. However, there is no such requirement for investors who are happy to invest from overseas, without wishing to reside in the UK.
The above information does not constitute any form of advice or recommendation by London Loves Business and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Appropriate independent advice should be obtained before making any such decision. London Loves Business bears no responsibility for any gains or losses.