The Department of Immigration and Citizenship (DIAC) is accepting Expressions of Interest for the Significant Investor visa stream as of 24 November 2012. Applicants who make a designated investment of AUD $5,000,000 are eligible to receive a four year visa (Subclass 188) that provides a pathway to gaining Australian permanent residence. Regulations outlining eligibility requirements and guiding policy for the Significant Investor stream were also released.  

The below article outlines the key points and eligibility requirements addressed in the new regulations and policy.  

The Process

The process for obtaining a Significant Investor Visa will be comprised of five steps;

  1. Applicant submits an Expression of Interest via the Department’s online system, SkillSelect. Successful applicants will then receive an invitation to submit a visa application.
  2. Applicant submits an application to request nomination by a designated State/Territory agency. Each state/territory will have its own requirements to nominate applicants.
  3. On receipt of the Nomination approval, the applicant submits the formal visa application with the Department of Immigration.
  4. Applicants found to meet eligibility criteria will then be notified by the Department of Immigration and will be invited to make the AUD $5,000,000 complying investment within 70 days of this notice.
  5. Once an original document evidencing the complying investment has been made, the Department of Immigration will issue the visa and provide a “first entry date” requiring that the applicant enter Australia by a designated date.  

The Applicant - Requirements

The applicant and any accompanying family members will be required to provide criminal background checks and meet the relevant health criteria by providing medical examination results. This is consistent with health and character requirements for other Business Innovation and Investment visas.  

In addition, the applicant and spouse must not have a history or involvement in any business or investment activities that are not generally accepted in Australia (e.g. corruption, tax evasion, disregard for industry licensing/regulatory requirements, unfair employment practices, etc.)  

The applicant must also have a “genuine intention” to reside in the State or Territory that issued the Nomination approval mentioned above.  

The applicant and accompanying family members will not be required to demonstrate English language competency, nor will they be subject to any age limits or points testing, as in other Business Innovation streams.  

Complying Investment - Requirements

The regulations have defined the investments deemed acceptable by the Department. The AUD $5,000,000 can be invested into one or a mix of the following complying investments;

  1. A Commonwealth, State or Territory bond
  2. Direct investment in an Australian proprietary company. The company cannot be listed on the Australian stock exchange and the investment must reflect an ownership interest in the company (shareholder, partner in a partnership or sole proprietor.)
  3. Investment in a managed fund. While no specific managed funds are named, the Department has provided guidelines as to the type of investments in the managed fund (e.g. infrastructure projects, bonds or term deposits, Australian agribusiness, etc.)  

The funds placed into these investments must be held by the applicant or their spouse, by a company where the applicant/spouse is the sole shareholder or via a lawfully established trust where the applicant or their spouse is the sole trustee. Funds may be withdrawn and moved into another complying investment. However, any transfer must be made into a new complying investment within 30 days.  

Finally, the applicant must demonstrate that the funds used to make the investment cannot be claimed by any third party (i.e. “unencumbered”) and that they were lawfully acquired. This will be evidenced largely by a Statement of Assets and Liabilities Position (SALP) which is a Departmental form the applicant must complete.

Pathway to Permanent Residence

Successful applicants will initially be granted a temporary, Subclass 188 visa valid for a period of four years. At the end of this four year period, applicants will have the option to apply for the Subclass 888 visa, which grants Australian permanent residence.  

In order to qualify for permanent residence, the applicant must continue to hold a complying investment. In addition, the applicant must demonstrate that they have been in Australia for an average of 40 days for each year the Subclass 188 visa was held. For example, if the applicant had held a Subclass 188 visa for four years, they would be required to demonstrate a cumulative 160 days in Australia. It is not necessary for the applicant to have been in Australia for 40 days in each calendar year in the period.  

Visa holders who do not meet requirements for permanent residence may request a two year extension to the Subclass 188 visa (a maximum of two extensions will be granted.)  

Comments and conclusion

The Minister for Immigration has expressed his commitment to the simplification and streamlining of requirements to ensure Significant Investor applications are processed efficiently. The regulations and existing policy for the Significant Investor stream appear to be consistent with this approach. Given the overall structure of the eligibility requirements in the regulations, PwC Immigration would anticipate a fairly straightforward application process both by the Department of Immigration and the relevant State/Territory agencies.  

However, the Procedures Advice Manual (PAM) has yet to be completely finalised. This document provides the guiding policy for Department of Immigration case officers and will explain how these new regulations should be interpreted. This will be critical in evaluating the Department’s position on funds being unencumbered and lawfully acquired and what kind of source of funds checking or anti-money laundering provisions will apply. Existing policy grants a high degree of discretionary authority to the case officer to request additional documents or evidence on source of funds matters. This would indicate, at this initial stage, that it may be difficult for case officers to adopt a consistent approach particularly on document requirements required to support the visa application.  

We would also expect the relevant PAM to explain the Department’s position on demonstrating the “genuine commitment” to reside in a particular State or Territory, as existing policy does not provide much detail on this requirement.