Significant Investor Visa to attract investment into Australian private companies

By: Eric Gao – Baomoney

The new “significant investor” visa will be implemented on November 24th, 2012, as part of the Business Innovation and Investment program in addition to the (Subclass 188) (Provisional) visa and the (Subclass 888) (Permanent) visa, providing a new visa pathway for high net worth individuals seeking investment immigration. Investors who make an investment of at least five million Australian Dollars into certain complying investments are classified as “significant investor”. Specifically the legislation highlight investment into proprietary companies.

Boundaries for other non-financial related eligibility criteria are exempted in compensation to the high financial requirements to “broaden the coverage”. The innovation points test is not applicable as well as there are no upper age limits and no English language threshold requirements. The residence requirement is reduced to 160 days spent in Australia over a four-year timeframe while holding the Business Innovation and Investment (Provisional) (Subclass 188) visa. Furthermore, a maximum of two visa term extension would be granted given the satisfaction of the extension requirements.

Complying Investments for such visa include:

– Commonwealth, Sate or Territory government bonds

– Australian Securities and Investment Commission (ASIC) regulated managed funds which invest in a limited specified Australian asset categories

– Direct investment into actively operating private Australian companies that meet the ‘qualifying business’ test

Benefits

The new visa stream is proven to be mutual beneficial to both Australia and immigrants, resulting in a “win-win” situation.

The main aim of the Significant Investor Visa is to provide a boost to Australia economy by luring significant amounts of funds into Australia. This new Visa has the ability to bring capital into emerging growth companies, as long as they comply with 3 conditions.

Direct investment into Australian proprietary companies

For a direct investment into an Australian proprietary 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.

Qualifying business

The Migration Regulations 1994 define a qualifying business as an enterprise that:

(a) is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public; and

(b) is not operated primarily or substantially for the purpose of speculative or

passive investment.

For foreign high net worth individuals, this visa does not only offer an easy immigration option but also the opportunities for strategic business development.  Australia is well reputed for its rich natural resources, pleasant climate, high growth potential and stable economic condition, it definitely provides a “friendly” environment for overseas investment.

Additionally, the complying investment opportunities range from low risk to high risk, providing investors the opportunity to choose the investments according to their own risk tolerance.