Australian government agencies have identified instances of non-genuine applications under the Significant Investor Visa program.
With the SIV undergoing yet another review, this has led to concerns that the government may pull the plug on this controversial investment immigration stream.
The current Home Affairs review was launched in 2019 and follows a 2016 Productivity Commission report that called for the termination of the SIV
About the SIV
This program was launched in 2012 and offers a fast-track route to Australian permanent residence to wealthy individuals investing at least AUD$5 million for four years in the country.
An investor-applicant needs to spend just 40 days in the country and can qualify for citizenship in due course as per applicable rules.
Since the program’s launch, Australia has granted SIVs to around 2,500 investors and has attracted foreign investments of more than $11.5 billion.
After a major review in 2015, the SIV was modified with investors no longer permitted to qualify for permanent residence by investing in residential real estate. Instead, the rules required compulsory investments into venture capital funds and startups in the country.
The Latest Controversy
The Western Australian government’s Small Business Development Corporation (SBDC) has identified instances of non-genuine SIV applications being cooked up by the coordinated efforts of fund managers and migration agents.
These applications targeted Chinese investors, who account for more than 90 percent of all SIVs issued.
China is the biggest source of demand for virtually all golden visa and citizenship by investment programs across the globe. However, Chinese dominance has led to concerns about the proliferation of business advisors and agents hawking SIV-compliant funds and products aimed specifically at Chinese investors.
In the Australian context, there are fears that investors may be bypassing SIV rules prohibiting direct property investments.
The Latest SIV Review
The 2016 Productivity Commission report highlighted two primary concerns. One, that the SIV may be misused as a pathway for investing dirty money in Australia and two, that the overall economic benefits for the country and its public were negligible.
Contributing to the review, fund managers and migration agents have sought stringent government security and health checks on all applicants. Proper due diligence is essential to maintain the program’s credibility among investors and other countries.
Fund managers have focused on speeding up visa processing and have asked the government to ensure fewer bottlenecks in the deployment of investments in the country.
Other suggestions to strengthen the SIV include:
- Measures to increase consumer awareness.
- Improved transparency.
- Disclosure of professional fees, referral fees and other benefits.
- Restricting SIV submissions to agents registered with the government regulator.
- Creation of a panel of reputed and successful fund managers to manage Significant Investor Visa portfolios.
As the world grapple with the economic consequences of the COVID-19 pandemic, terminating the SIV may be an excessively-drastic step that will cause more harm than good.
Instead, Australia should focus on attracting high net worth individuals and successful entrepreneurs and leveraging their contributions to boost the pandemic-scarred economy.