The new investment framework for the significant investor stream of the subclass 188 visa has been announced.

As of 1 July 2015, any applicant for what has become known as the significant investor visa or SIV must comply with a 3 part investment framework when investing the minimum investment requirement for the SIV.

The minimum investment requirement from the SIV applicant remains at AUD 5,000,000 over the life of the visa, i.e., four years.

New investment framework

As at 21 May 2015, the framework for an applicant for a SIV requires:

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There are a number of requirements applicable to each of the three investment vehicles. For example, to qualify as a complying fund in the sector 2 and sector 3 investment vehicles, cash can comprise a maximum of 20% of the fund’s net assets, and derivatives can only be used for the purposes of risk management.

At the same time, there are overarching rules that must be observed.

Most importantly, to qualify as a complying investment:

  • the investment must be provided by manager(s) domiciled in Australia and holding an Australian financial services licence;
  • any fund manager must be independent from the SIV applicant and any partner of the applicant.

Investments may be made through a Fund or Fund or Investor Directed Portfolio Service, but the investment framework as briefly outlined above must be observed for the SIV applicant to meet the application criteria for the SIV. 

Additional statutory obligations continue

The SIV applicant must comply with a number of obligations under Australian migration law for a successful SIV application. These obligations cover matters from health requirements and attendance in Australia, to proving the integrity of the funds used for the complying investment. The legislation has not yet been announced for the regime which will commence on 1 July 2015.

Presently, statutory obligations include (without limitation):

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Health and character criteria apply to this visa, and these will likely continue to apply on and from 1 July 2015.