In brief - Investment of A$5 million for four years required for new visa category
The Significant Investor Visa is available to business investors who want permanent residency in Australia and are able to invest A$5 million for four years in complying investments. Other immigration criteria have been relaxed.
New visa scheme designed to encourage business innovation
On 29 August 2012, the Minister for Immigration and Citizenship, Chris Bowen launched the Significant Investor Visa as a new stream within the Business and Investment (Provisional) (Subclass188) Visa ("Provisional Visa") and the Business Innovation and Investment (Permanent) (Subclass 888) Visa ("Permanent Visa") to encourage migration investment into Australia.
This pathway for migrant investors has been introduced to boost the Australian economy and encourage business innovation in Australia. The Significant Investor Visa scheme became operational on 24 November 2012 to encourage migration of business investors into Australia. This government initiative seeks to strengthen Australia's economic competitiveness by securing long term capital from high net worth individuals, particularly throughout Asia.
Other requirements for Significant Investor Visa less stringent
As a central component of the scheme, applicants are required to invest a minimum of A$5 million into complying investments to be eligible for this visa. However it is important to note that such applicants are not subject to the same stringent criteria currently imposed by the Department of Immigration and Citizenship (DIAC) on other categories of visas, including the innovation points test, English language requirements and age restriction limits.
Investment and residency requirements for Significant Investor Visas
Under the government regulations, visa applicants must:
- Submit an expression through SkillSelect, a government online service which enables intending migrants to record their details to be considered for a skilled Visa
- Be nominated by a state or territory government agency to receive an invitation to lodge a Visa application
- Invest A$5 million into complying investments for a minimum of four years - prior to attaining nomination from a state or territory government agency, migrant investors must demonstrate that they have at least A$5 million in assets that are unencumbered and lawfully acquired and readily available for transfer to Australia
- Comply with the residency requirement of at least 60 days over four years whilst holding the Provisional Visa
- Genuinely have a realistic commitment to continue to maintain a business or investment activities in Australia
Complying investments and varying state requirements
As a principal criterion of the Significant Investor Visa, an applicant must hold investments in complying investments. In this context, complying investments include:
- Commonwealth, state and territory government bonds
- Australian Securities and Investment Commission (ASIC) regulated managed funds with a mandate for investing in Australia
- Direct investment in Australian proprietary companies
Prior to the granting of a Provisional Visa , intending migrants are required to make a complying investment. However, the Department of Immigration and Citizenship has advised that financial commitment should not be made until the officer managing the visa application has been sufficiently informed of such intention.
Although the federal government has specified that contributions made in one or more categories of complying investment may be in any proportion, nomination requirements will differ between the states and territories. Therefore, it is necessary for intending migrants to ascertain the specific nomination requisites from the state from which they propose to gain nomination.
To qualify for nomination in NSW, the state government has specified a number of additional conditions to be satisfied by potential applicants. In particular, applicants must allocate at least 30 per cent (A$1.5 million) of the A$5 million investment into NSW Investor Migrant Waratah Bonds.
NSW Waratah Bonds are issued by the NSW Treasury Corporation to raise capital and have been identified by the state as a mechanism to attract investors while supporting state infrastructure and public sector activities.
To qualify for nomination in Victoria, the state government has specified that intending migrants must make a designated investment of A$1.5 million with the Victorian Treasury Corporation and agree to establish an "eligible" business in Victoria within 36 months of their arrival.
Eligible business activities include most commercial endeavors (excluding passive investment) and can be recognised by the Australian Tax Office as a business, subject to the lodgment of a quarterly Business Activity Statement.
To be eligible to apply for Queensland government nomination, applicants must meet the DIAC eligibility requirements. Preference will be given to applicants with investments that have a direct economic benefit to Queensland. Applicants will be considered on a case by case basis. In order to receive nomination from the Queensland government, it is expected that applicants have a genuine and realistic commitment to reside in Queensland in order to meet the DIAC residency requirements.
Implications for foreign investors and the Australian economy
The Significant Investor Visa will be a useful mechanism to attract high net worth individuals who endeavour to attain permanent residency in Australia. By facilitating the application process for intending migrants, the Australian government has promoted this scheme as a means to sustain domestic economic growth and stimulate business innovation.
The Significant Investor Visa pathway will not only make Australia a more attractive investor migration destination, but will also provide financial support to the nation through complying investments.
This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2020.