The Australian government has released a draft investment framework for an enhanced Significant Investor Visa Scheme (SIV) and design options for a new Premium Investor Visa (PIV).
As part of a broader competitiveness agenda, the reforms are aimed at better directing investment through the visa schemes into more dynamic areas of the economy, including venture capital and small emerging companies.
The review explains that under the existing SIV scheme investment is directed largely into passive investments like government bonds. Applicants are required to make an investment of at least AUD $5 million in complying investments for a minimum of four years. Under the proposed changes government bonds would no longer be a complying investment class.
The proposed complying investment framework for the SIV scheme includes specifying that:
- at least 25% or AUD$1.25 million of the applicant’s AUD $5 million investment must flow into early stage, growth capital investments, through approved venture capital funds.
- at least 25% or AUD $1.25 million of the applicant’s investment must flow into emerging listed companies, through managed funds investing in small Australian stock exchange listed companies.
- at least 50% invest in balancing investment
And it reinforces the existing rules banning direct investment into residential real estate, and introducing new measures to clamp down on indirect investment into residential real estate. A portion of funds will continue to be permitted to flow into commercial real estate, via managed funds.
There are also enhanced measures to improve protection for investors. The Premium Visa scheme would require a minimum investment of AUD $15 million and offer an accelerated 12 month pathway to citizenship.
This scheme will be more flexible in terms of investment class and will be aimed at attracting exceptional business people to Australia, including high-calibre entrepreneurs.
Investor visas offered a valuable prize which the government believes warrants investment in more dynamic and productive areas of the economy which experience capital constraints, according to Michaelia Cash, assistant immigration minister.
She explained that the changes will attract more investment into high growth companies and will support the commercialisation of great Australian research. The key objective is to see more investment into areas which support innovation and which provide new sources of growth capital, particularly in areas with thin capital flows.
The enhancements are also designed to see the full potential of the government’s investor visa scheme realised, while maintaining strong safeguards to ensure Australia’s migration programme is not misused.
Changes to complying investment policy for the SIV and new PIV will take effect from 01 July. ‘They include higher risk and potentially higher return investments such as venture capital, which will provide a bigger potential boost to the Australian economy,’ added Cash.