After announcing a Premium Investor Visa scheme offering permanent residency in Australia against minimum investment of A$15 million, the Australia Federal Government is seeking to overhaul the Significant Investor Visa program to maximize its benefits to the Australia economy.
The Abbott government is planning to utilize the inflow of billions of dollars from this scheme as venture capital and investments in small-cap companies. Currently, the investments are being made in low-risk areas like government bonds.
Launched in 2012, Australia’s Significant Investor Visa program has led to inflow of almost $2 billion into the country. However, bulk of the funds is invested in government bonds, blue-chip firms, or a managed fund operating under ASIC regulations. This approach, according to Trade and Investment Minister Andrew Robb, is resulting in any real impact on the growth of the country’s economy.
The Minister opined that merely pumping funds into government bonds that can be easily sold at a good price by the investor is not offering any benefit to the country. He said that allowing money to be simply parked for four years and offering citizenship in return was not sensible public policy.
Seeking the channelization of investment into comparatively high-risk areas, the Minister opined that new funds from investors, most of whom are Chinese citizens, should be invested in capital-scarce destinations like small-capital companies, exploration companies, and start-up ventures. The Minister highlighted that even incremental investment of a few hundred million dollars can lead to significantly higher benefits for the Australian economy.
The new Premium Investor Visa scheme allows investors to obtain Australian citizenship in a period of just one year through investments of not less than A$15 million, Highlighting the prestige associated with Australian citizenship in the international community, Mr. Robb said that investors must be prepared to face higher risk and make investments that result in a material difference to the economy of Australia in order to enjoy the benefits of being a citizen of this country.
He also pointed out that State or Territory government undertake significant risks when sponsoring visa applications seeking fast-track citizenship and that making four-year investments in low-risk areas is not an acceptable contribution. The government intends to utilize funds from new investors through time-tested vehicles like the Early Stage Venture Capital Limited Partnership.
Reacting to concerns that the Australian Significant Investor Visa program is being exploited by criminals in connivance with corrupt bureaucrats to seek fast-track residence in Australia, the government announced plans to improve scrutiny for the Significant and Premium Investor Visa programs.
Till September 2014, 88% of the 436 significant investor visas awarded by Australia were issued to Chinese investors. The recent crackdown on corruption in Beijing has raised fears that the significant investor visa program is being misused for money laundering purposes.
The Australian Federal Police is working closely with Chinese authorities in tackling the problem. However, Mr. Robb clarified that no instance of misuse of the Significant Investor Via Scheme has been identified and said that the Government is reassessing measures to ensure the integrity of the program.
The Minister reiterated that immigration authorities would not hesitate to take action, including contacting Chinese authorities, in cases where the mandatory security and character screening process indicates accumulation of wealth through illegal means and methods.
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