Australia Proposes Changes To Investment Visa Programme
The Australian government has announced new rules for an enhanced version of its Significant Investor Visa Scheme, or SIV. The government, which is led by Tony Abbott who recently overcame a vote of no confidence in his leadership, went further. Along with its proposed alterations to SIV, which are for people from overseas with significant sums that they can invest in the country, a new visa programme was announced. In a joint statement given by the Honourable Andrew Robb MP, who is Abbott's Minister for Trade and Investment and Assistant Minister for Immigration and Border Protection, Michaelia Cash, there will also be a new Premium Investor Visa, or PIV. These two measures, the government says, makes up a significant part of its broader competitiveness agenda in the international market for attracting wealthy immigrants.
According to the announcement made on 12th February, the changes are aimed at better directing inward investment through the two types of visa. Each of the programmes should allow investment to reach, “into more dynamic areas of the economy” the minsters claimed. It is understood that they are particularly keen on promoting venture capital with small and emerging Australian companies. Although Australia does have existing visa programmes for investors, the changes are supposed to make their take up improve. The new framework and design options were developed after some initial rounds of stakeholder consultation by Austrade, the country's Trade Commission which covers import, export and inward investment. It is understood that this consultation period led to no less than 68 separate written submissions. Minister Cash said that the enhancements under both programmes will allow the full potential of the government’s investor visa scheme realised, whilst underlining that “strong safeguards to ensure our migration program is not abused” will be in place.
Significant Investor Visa Scheme Changes
Under the existing SIV programme, investment is commonly made into areas of passive investment. A typical example of this would be an immigrant investing in a 'safe' product such as government bonds. Under the current rules, applicants are obliged to divest of at least AU$5 million for at least four years. The investments may be split up, but they must qualify under the rules in order to count. If the proposed changes are accepted by the Australian parliament, then government bonds would no longer count as a complying investment class.
According to the two ministers concerned, the proposed alteration to the investment framework for SIV will not just remove government bonds as a complying investment. The new rules would specify that at least one fifth of the applicant’s AU$5 million investment must be made into early stage, growth capital investments. This would be done only through 'approved' venture capital funds. The changes would also ensure that at least 30 per cent an applicant’s investment will flow into emerging Australian companies. These investments would be made through managed funds which specialise in investing in small firms that are listed on the Australian stock exchange. The proposals also call for the reinforcement of the existing rules which ban direct investment into residential properties. Furthermore, more measures are proposed to suppress indirect investment into residential real estate. However, a portion of applicants' investment will still be permitted to flow into commercial real estate, if made through managed funds. The ministers also say that there will be enhanced measures to improve the level of protection that immigrant investors can expect.
The New Premium Investor Visa Scheme
Under the proposals, this programme will offer greater flexibility in terms of the allowed investment classes for people with more money to invest than would access the SIV programme. Although a PIV applicant will need a minimum investment of AU$15 million, it will offer an accelerated pathway to Australian citizenship which could be as little as one year. The PIV programme, the ministers say, will be focussed at attracting exceptional business leaders to the country, including high-calibre entrepreneurs.
According to Ms Cash, alterations to the complying investment policy in the SIV and the introduction of the new PIV programme could come into effect by as early as July 2015. “Both programmes will offer greater return potential from investments such as venture capital,” she said. “This will afford a bigger potential boost to the Australian economy.”
Mr Robb said that investor visas constituted a valuable prize and that the government believes this warrants investments being made into more dynamic and productive areas of the Australian economy, many of which currently face capital constraints. “This move will attract more investment into high-growth companies,” he said. “It will also support the commercialisation of Australian research,” he added. “The government's key objective is to promote more immigrant investment into areas which support innovation.”
February 13, 2015