The Migration Institute of Australia outlines the latest news in the much hyped, significant investor visa.

On November 24, 2012 the Australian Government announced a new visa option in the Business and Innovation and Investment visa program: the Significant Investor Visa.

Visa applicants in this category must:

• submit an expression of interest in SkillSelect and be invited to apply for the visa
• be nominated by a State or Territory government
• make investments of at least five million Australian dollars into complying investments.

Visa applicants do not need to satisfy a points test and there are no upper age limits or English language requirements. The visa stream features a residence requirement of 160 days spent in Australia over four years while holding the Business Innovation and Investment (Provisional) (Subclass 188) visa.

Visa holders also may extend their provisional visa by an additional two years, with a maximum of two extensions permitted. The Minster for Immigration and Border Protection, Scott Morrison, gave an indication of the future of the Significant Investor Visa at the MIA National Conference in October.

The minister said the government had positive and strong plans to continue the program, as it can attract significant investment to stimulate the Australian economy and create jobs and capital.

Minister Morrison said he intended to remove vague and unnecessarily prescriptive elements of the program, to remove confusion and uncertainty, and to improve the processing times for SIV applications. In particular the minister said he would review the investment criteria for the SIV program with a view to having a more flexible approach to enable capital to be available to small and medium businesses and entrepreneurial start-ups. He sees the program as not so much providing a $5 million dollar investment to Australia, but providing Australia with those people capable of making that initial investment and continuing to generate wealth for Australia.

Mr Morrison said that the residence requirements of the SIV program should also focus on the secondary applicants and family members of the primary applicant because “we are looking to see that family anchor themselves here in Australia.”

Any reforms to the SIV program will be carefully thought out by the government before implementation, but already there has been an improvement in processing times. ■

COMPLYING INVESTMENTS

Complying investments for the Significant Investor visa include Commonwealth, State or Territory government bonds; Australian Securities and Investment Commission (ASIC) regulated managed funds with a mandate for investing in Australia; and direct investment into Australian proprietary companies. Visa applicants may hold investments in each of the above investment options and may also change between complying investments, provided they meet specified reinvestment requirements. The investment must be made and held directly by the applicant or together with their spouse or de facto partner; through a company where the total amount of issued shares are owned by the applicant or together with their spouse or de facto partner; or through a valid trust where the trustees and beneficiaries include the applicant or their spouse or de facto partner together. 

AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION REGULATED MANAGED FUNDS

An ASIC regulated managed fund for the purpose of the Significant Investor visa is a managed investment scheme defined in the Corporations Act 2001 and regulated by the Australian Securities and Investment Commission. Any interests issued in the fund must not be able to be traded on a financial market and must be covered by an Australian Financial Services Licence. Investments in ASIC regulated managed funds include any investments made through an Investor Directed Portfolio Service. For an ASIC regulated managed fund to qualify as a complying investment it must be limited to categories of investments specified by the Minister in a legislative instrument in writing. These categories include:

• infrastructure projects in Australia;
• cash held by Australian deposit taking institutions;
• bonds issued by the Commonwealth or a State or Territory government;
• bonds, equity, hybrids or other corporate debt in companies and trusts listed on an Australian stock exchange; • bonds or term deposits issued by Australian financial institutions;
• real estate in Australia; and
• Australian agribusiness.

The managed fund must be open to the general public and the fund manager must provide a compliance declaration on Form 1413 that their services would be limited to the categories of investments in Australia specified by the Minister in the legislative instrument.

DIRECT INVESTMENT INTO AUSTRALIAN PROPRIETARY COMPANIES

For a direct investment into an Australian proprietary company to qualify as a ‘complying investment’, the following criteria must be met: • the company must genuinely operate a qualifying business in Australia;
• the applicant must obtain an ownership interest in the company;
• the company must be registered with ASIC; and
• the business must have an Australian Business Number