AUSTRALIA COMPLETE GUIDE FOR OBTAINING SIGNIFICANT INVESTOR VISA INTRODUCED ON 24TH NOVEMBER 2012 UNDER TWO CATEGORIES (SUBCLASS 188)AND (SUBCLASS 888) 1.1 The Significant Investor visa (“SI visa”) was introduced on November 24, 2012 by the previous federal Labour government as a new stream within the Business Innovation and Investment (Provisional) (Subclass 188) visa and the Business Innovation and Investment (Permanent) (Subclass 888) visa. 1.2 The purpose of the SI visa is to provide a boost to the Australian economy by attracting high net worth individuals seeking investment migration to Australia. 1.3 A person seeking residency in Australia through this channel must first: (a) obtain a provisional visa under the SI visa pathway; and (b) invest AUD5 million into complying investments for not less than 4 years. 1.4 To be eligible to apply for a permanent SI visa an applicant must: (a) be nominated by a State or Territory government; (b) have continuously held complying investments for the life of the applicant’s provisional SI visa; (c) have held the provisional SI visa for a minimum period of 4 years; and (d) have met the residence requirement (at least 40 days residence in Australia for every year or part year that they have held a provisional SI visa. The residency requirements can be met cumulatively – for example, 80 days in one year and none in the next, provided the total is not less than 160 days). 1.5 Holding a provisional SI visa (subclass 188) is the first stage before becoming eligible to qualify for a permanent SI visa (subclass 888) which allows applicants and their eligible family members permanent residence in Australia. 2. Complying investments 2.1 Regulation 5.19B and paragraph 188.25 of Schedule 2 of the Migration Regulation 1994 and Migration Regulations 1994 – Specification of Eligible Managed Fund Investments – IMMI 13/092 provide that an applicant must make a complying investment of at least AUD5 million and hold that investment continuously for at least 4 years. 2.2 An investment will be a complying investment if all of the following requirements are met: (a) the investment consists of one or more of the following: (i) an investment in Commonwealth, State or Territory government bonds (however described); (ii) an investment in a managed fund (directly or through an investor directed portfolio service) that invests in any of the following: A. infrastructure projects in Australia; B. cash held by Australian deposit-taking institutions (including negotiable certificates of deposit, bank bills and other cash-like instruments; C. bonds issued by the Australian Government or a State or Territory government; D. bonds, equity, hybrids or other corporate debt in Australian companies and trusts listed or expected to be listed within 12 months on an Australian stock exchange; E. bonds or term deposits issued by Australian financial institutions; F. real property in Australia; G. Australian agribusiness; H. annuities issued by an Australian registered life company in accordance with ss 9 or 12A of the Life Insurance Act 1995; I. derivatives used for portfolio management and non-speculative purposes (which constitute no more than 20 per cent of the total value of the managed fund); J. loans secured by mortgages over the investments listed above; and K. other managed funds that invest in the investments listed above; and (iii) direct investment in an Australian proprietary company that meets the following requirements: A. the company is not listed on an Australian stock exchange; B. the company has not been established wholly or substantially for the purpose of creating compliance with Reg 5.19B of the Migration Regulations 1994; and C. the investment is an ownership interest in the company; (b) the funds used to make the investment are unencumbered and lawfully acquired; (c) the investor is an individual; (d) the investor makes the investment: (i) personally; (ii) with the investors spouse or de facto partner; or (iii) by a company that has issued shares and in which: A. the investor holds all of the issued shares; or B. the investor and the investors spouse or de facto partner hold all of the issued shares; or (iv) by a trust: A. that is lawfully established; B. of which: 1. the investor is the sole trustee; or 2. the investor and the investors spouse or de facto partner are the sole trustees; and C. of which: 3. the investor is the sole beneficiary; or 4. the investor and the investors spouse or de facto partner are the sole beneficiaries; and 2.3 The investment will not cease to be a complying investment if: (a) an investor withdraws money from a complying investment, or cancels the investment; and (b) within not more than 30 days from the withdrawal or cancellation, the investor makes an investment of at least the value of the withdrawn money or cancelled investment in one or more other investments referred to in point 2.2 above. 2.4 The value of the investment may fluctuate over the 4 year investment period. An investor is not required to provide additional funds to maintain the threshold of AUD5 million, but if the investment increases, an applicant may not withdraw the increased value . 3. Significant Visa Extension 3.1 An applicant may be granted a further provisional SI Visa under a Significant Investor Extension visa. The total length of time for an applicant under an SI Visa and SI Extension Visa is 8 years . 3.2 To extend an SI Visa: (a) an applicant must have held an SI visa for at least 3 years or hold an Significant Investor Extension visa ; and (b) if the applicant has invested in an Australian proprietary company, that company must either: (i) have carried on a qualifying business for at least 2 years; or (ii) satisfy the Minister that the company has made a genuine attempt to operate the business as a qualifying business where it was unable to do so. 4. Investment in property/managed funds 4.1 Direct investments in property will not be considered as a complying investment. An applicant may however invest in managed funds which may invest in real property in Australia. 4.2 Regulation 1.03 of the Migration Regulations 1994 defines “managed funds” as an investment to which all of the following apply: (a) the investment is a managed investment scheme (within the meaning of the Corporations Act 2001 ) in which members acquire interests in the scheme; (b) the interests are not able to be traded on a financial market (within the meaning of section 767A of the Corporations Act 2001 ); (c) no representation has been made to any member of the managed investment scheme that the interests will be able to be traded on a financial market; and (d) the issue of the interest is covered by an Australian financial services licence issued under section 913B of the Corporations Act 2001 . 4.3 It has been suggested that a managed investment scheme with a trustee that holds an Australian financial services licence can be established for the development of a single real estate asset. However, this is likely to be a complex project which would require careful consideration on a case by case basis of numerous issues including, for example, FIRB approval. 4.4 The responsible manager of each managed fund in which an applicant invests must make a declaration in Form 1413 that their services are limited to acceptable categories of investments in Australia, as specified by the relevant legislation. 5. Other requirements 5.1 In addition to residing in Australia for 160 days out of the 4 years, the applicant must also have a genuine and realistic commitment to: (a) reside in the State or Territory whose government agency nominated the applicant; and (b) continue his or her business and investment activity in Australia after the complying investment matures. 6. Queensland requirements 6.1 In addition to the Australian Department of Immigration and Border Protection eligibility criteria, an applicant will need to demonstrate that his or her complying investment has a direct economic benefit to Queensland. 6.2 Investment in property development proprietary companies in Queensland may be considered as well as eligible managed funds that invest in property in Queensland. Investment must be into a company that is registered and operating in Queensland. 6.3 Investment into a managed fund must result in benefit to Queensland for the 4 years of the investment term. 6.4 To demonstrate the economic benefit of the investment to Queensland, existing companies will be provided with a template to outline the offer to the investor. Additional evidence may include information relating to job creation, revenue to Queensland, plans for expansion of the business and the ongoing intention of the business. 6.5 Investment into stocks of companies that have a presence in Queensland is an indirect benefit and is not considered to have a direct economic benefit to Queensland. 6.6 Applicants are required to provide a statement of intent to Queensland outlining their investment and personal commitment to Queensland – this may include the purchase of residential or commercial property. 6.7 Trade and Investment Queensland offer services to Queensland organisations seeking foreign investors – information can be found at export.qld.gov.au/investors. 7. Changes to asset classes 7.1 On 13 August 2013, the Minister for Immigration and Citizenship expanded the categories of complying investments for the Significant Investor Visa by virtue of Migration Regulations 1994 – Specification of Eligible Managed Fund Investments – IMMI 13/092 which took effect on November 23, 2013 and are outlined below (changes are in bold and strikethrough text): Item Complying investments 1 Infrastructure projects in Australia 2 Cash held by Australian deposit taking institutions (including negotiable certificates of deposit, bank bills and other cash-like instruments) 3 Bonds issued by the Commonwealth Government or a state or territory government 4 Bonds, equity, hybrids or other corporate debt in companies and trusts listed on any Australian Stock Exchange or expected to be listed within 12 months on an Australian Stock Exchange 5 Bonds or term deposits issued by Australian financial institutions 6 Real estate Real property in Australia 7 Australian agribusiness 8 Annuities issued by an Australian registered life insurance company in accordance with ss 9 or 12A of the Life Insurance Act 1995 9 Derivatives used for portfolio management and non-speculative purposes, which constitute no more than 20% of the total value of the managed fund 10 Loans secured by mortgages over the investments listed in items 1 to 8 of the above list 11 Other ASIC regulated managed funds that invest in the above list of investments 7.2 As you will note from the above, the changes did not extend to direct investment in property. 8. Review of Significant Investor visa programme 8.1 The current Liberal government announced on March 7, 2014 that the Department of Immigration and Border Protection will conduct a review of the Significant Investor visa programme. 8.2 There will be particular emphasis on: (a) examining ways of giving greater flexibility and investment choices to significant investor visa applicants; (b) faster processing of applications for visas; and (c) the possibility of introducing a new permanent visa stream for investment migrants.
Posted on: Fri, 17 Oct 2014 04:07:19 +0000
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