Taking forward the process of implementing a broad competitiveness agenda, the Australian government released a draft investment framework for an enhanced Significant Investor Visa scheme and a new Premium Investor Visa scheme. The framework targets better channelization of investment made through its investment immigration schemes. New avenues being explored include venture capital funds and small Australian companies.
Under the existing SIV scheme, investments made by immigrants are channelized into passive investment options like government bonds. Immigrants must invest at least $5 million for a period of four years in order to become eligible for permanent residence in Australia. The draft framework seeks to remove government bonds as an eligible investment category.
Instead, the framework for the SIV scheme mandates investment of at least 20% of the total investment amount or a minimum sum of $1 million into venture capital funds. This money will be directed towards early-stage growth oriented capital investments. Additionally, 30% of the total investment or a sum of at least $1.5 million must be invested in emerging listed companies. The framework suggests allocation of funds through managed funds investing in small companies listed on the Stock Exchange.
The existing ban on direct investment into residential property sector in Australia is set to be reinforced with new norms that prohibit indirect investment as well. Commercial real estate investment will continue to be permissible provided it is made through managed funds. The framework also includes measures to enhance protection for immigrant investors.
The framework suggests a flexible approach towards the Premium Visa scheme, which offers citizenship after a period of just 12 months to immigrants investing $15 million in Australia. The scheme seeks to attract wealthy investors, exceptional entrepreneurs, and high-calibre business owners to Australia.
According to the Assistant Immigration Minister, the government seeks to extract better value from its popular investment immigration schemes. The Minister opined that the valuable benefits to immigrants justify stricter investment requirements that look beyond passive allocation of funds to bonds. The government seeks to encourage investment into dynamic sectors that are facing scarcity of valuable capital.
The Minister stated that the government intends to commercialize research and development in Australia by attracting investment into growth-oriented companies and organizations. The revamped scheme will focus on promoting innovation in organizations working in high-growth capital sectors.
While investor immigrants will have to bear higher risk, they shall enjoy better opportunities to earn higher returns from successful venture capital investments. According ot the Minister, the government seeks to protect the nation’s Migration Program from misuse without hampering free flow of investment and entrepreneurial skills into the country.
Developed by the Australian Trade Commission, the suggested changes to the Significant Investor Visa and introduction of the new Premium Investor Visa will take effect from 1st July 2015.
Source: Australia Forum