New applications for the Significant Investor Visa (SIV) have been suspended since 24 April 2015, for the purpose of preparing new framework for the SIV in anticipation of its reintroduction on 1 July 2015.
Last Friday (15 May 2015), Andrew Robb, Minister for Trade and Investment, and Michaela Cash, Assistant Minister for Immigration and Border Protection, made a joint announcement of the Australian Government’s much anticipated new investment framework for the Significant Investor Visa (SIV). The announcement also provided some further information regarding the introduction of the new Premium Investor Visa (PIV).
The new arrangements are part of the Australian Government’s Industry Innovation and Competitiveness Agenda to facilitate the flow of capital into innovative start-ups and emerging Australian companies.
The agenda is to be achieved by stopping SIV applicants from investing the required $5 million into passive investments, such as government bonds.
The new framework for the SIV will require at least a $5 million investment, which must comprise:
- At least $500,000 into eligible Australian venture capital or growth private equity fund(s) (VCPE) investing in start-ups and small private companies;
- At least $1.5 million into eligible managed fund(s) or Listed Investment Companies (LICs) that predominately invest in emerging companies (i.e. market capitalisation below $500 million) listed on the Australian Securities Exchange (ASX) listed;
- A ‘balancing investment’ (the amount will depend on how much was invested in the above mandatory elements) in managed funds or LICs investing in a combination of other eligible investments, including other ASX-listed companies (i.e. companies with market capitalisations above $500 million), corporate bonds or notes, annuities and (with limitations) residential real estate.
The new framework also prohibits ‘loan back’ arrangements. Accordingly, new visa applicants will no longer be allowed to use their investments as collateral for borrowings.
What are the Significant and Premium Investor visas?
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 provide a boost to the Australian economy and to compete effectively for high net worth individuals seeking investment migration. Significant Investor Visa (SIV) holders are required to invest AUD5million into complying investments for a minimum of four years before being eligible to apply for a permanent visa.
The government intends that the Premium Investor visa (PIV) will be created as a new stream within the Business Innovation and Investment (Provisional) (Subclass 188) visa and the Business Innovation and Investment (Permanent) (Subclass 888) visa on 1 July 2015.
The purpose of the Premium Investor visa is to attract high net worth individuals to contribute their entrepreneurial skill or talent to Australia. The Premium Investor visa will be require applicants to invest AUD15million into complying investments for a minimum of twelve months before being eligible to apply for a permanent visa.
The announcement confirmed that the PIV will provide a fast-tracked, 12-month pathway to Australian permanent residency for talented entrepreneurs and innovators who can invest at least $15 million into eligible investments. The PIV will also allow a wider range of eligible investments than the SIV, including direct investments in a range of companies and financial products.
The new framework for the SIV and the PIV will come into effect on 1 July 2015.
Authors: Paul Hardman, Phoebe Yin, Christopher Rowe
Note:  The Australian Government intends to increase this amount to $1 million within the next two years, subject to the initial response to the scheme.