Background

Earlier today, the government released Migration Amendment Regulation 2012 (No. 7) to implement the Significant Investor Visa stream, which will be included as part of the Business Innovation and Investment migration program. These changes will be implemented on 24 November 2012.

The Significant Investor Visa program targets high net worth individuals who must maintain an investment of at least $5 million for four years in complying investments, namely:

  1. Australian Commonwealth, State or Territory Government bonds;
  2. unlisted Australian proprietary companies; or
  3. unlisted managed investment schemes which invest in eligible managed fund investments, which are limited to the following:
    1. infrastructure projects in Australia;
    2. cash held by Australian deposit taking institutions;
    3. bonds issued by the Commonwealth Government or a State or Territory Government;
    4. bonds, equity, hybrids or other corporate debt in companies and trusts listed on any Australian Stock Exchange;
    5. bonds or term deposits issued by Australian financial institutions;
    6. real estate in Australia;
    7. Australian Agribusiness; and
    8. other ASIC regulated managed funds that invest in the above list of investments.

In addition, individual states may impose further conditions for investment. For example, the NSW Government requires that at least 30% of the investment is in NSW State Government Bonds. Significant Investor Visa holders must also reside in Australia for a minimum of 160 days over four years. However, other common criteria for visa applicants such as age limits and English language skills do not apply.

It is expected that upto 700 visas will be granted annually.

What it means for you

If you are a fund manager and you want to promote investment into your funds by Significant Investor Visa holders, you will need to certify your fund’s compliance with the investment criteria to the minister and you should consider whether any existing and new funds comply with the investment criteria.

If you are an investment advisor or a IDPS operator, you may want to consider contacting your international contacts in relation to this opportunity and identifying what investment solutions you can provide to assist potential investors who are applying for Significant Investor Visas.