A new complying investment framework for the Significant Investor Visa (SIV) and Premium Investor Visa (PIV) program was announced by the Government to commence on 1 July 2015. The new arrangements are part of the Government’s Industry Innovation and Competitiveness Agenda, announced by the Prime Minister in October 2014.
The Significant Investor visa is a stream within the Business Innovation and Investment (Provisional) (Subclass 188) visa and the Business Innovation and Investment (Permanent) (Subclass 888) visa. The purpose of the visa is to attract high net worth individuals seeking investment migration to provide a boost to the Australian economy.
Under the new framework, SIV applicants will be required to invest at least $5 million over four years in complying investments, which must now include:
- At least $500,000 in eligible Australian venture capital or growth private equity fund(s) investing in start-up and small private companies. This will increase to $1 million for new SIV applications within two years as the market responds;
- At least $1.5 million in an eligible managed fund(s) or Listed Investment Companies (LICs) that invest in emerging companies listed on the Australian Securities Exchange (ASX); an
- A ‘balancing investment’ of up to $3 million in managed fund(s) or LICs that invest in a combination of eligible assets that include other ASX listed companies, eligible corporate bonds or notes, annuities and real property (subject to the 10% limit on residential real estate).
The new framework appears to focus on encouraging investment into innovative and emerging Australian companies rather than the passive investments of the previous regime like government bonds and residential real estate funds – areas that already attract large capital flows.
Direct investment in real estate is not a complying investment for SIV and this will not change under the new arrangements. Indirect investment in residential real estate through managed funds will also now be limited. A SIV holder can still independently invest in residential real estate so long as it complies with foreign investment rules, but this would not count as a complying investment to qualify for a visa.
The Government intends to introduce a new PIV from 1 July 2015, to attract high net worth individuals to contribute their entrepreneurial skill or talent to Australia. The Premium Investor visa provides an accelerated pathway to permanent residency, requiring applicants to invest $15 million into complying investments for a minimum of 12 months before being eligible to apply for a permanent visa. targeting talented entrepreneurs and innovators. The PIV will be available at the invitation of the Australian Government only, with potential recipients to be nominated by Austrade.
Austrade will also become a nominator for the SIV, alongside State and Territory Governments.