The implementation of the Significant Investor Visa on 24 November 2012 by the Australian Federal Government is an opportunity for people looking to migrate to Australia.
The new legislation allows investors to apply for permanent residency status in Australia by investing at least $5 million Australian dollars into investments that meet the new Significant Investor Visa guidelines.
Successful applicants will be granted a number of concessions including waiver for upper age limit and points test and a reduced residency requirement of 160 days over a four year period. Applicants will also not be required to satisfy the innovation points test, which would otherwise apply under a business investment/skilled migration application.
There are requirements for the investment to comply with the regulations and such investments include investment in a managed fund. The managed fund can include an unregistered managed investment scheme, provided the Trustee of the funds holds an Australia Financial Services License.
Investors seeking permanent residency through a Significant Investor Visa application cannot invest directly in investments such as property estate, cash or debt. Investors must therefore invest through an Australian domiciled vehicle which holds these types of assets, such as a managed fund operated by a trustee that holds an Australian Financial Services License.
Apac, as the holder of an Australian Financial Services License, can assist investors seeking to apply for permanent residency Significant Investor Visa program by providing flexible real estate, cash and debt investment solutions. Apac’s managed fund investment structure provides investors with the opportunity to tailor their real estate, debt and cash exposure based on their specific requirements, giving investors more control and flexibility. Investors can select their investment exposure to suit their own risk profile and desired investment outcomes.
Should you wish to find out more about how Apac can assist in providing a suitable investment solution please contact us.
Business Innovation and Investment visa (subclass 188 & 888)
The Australian Government has introduced a new visa scheme to encourage foreign investment into Australia – the Significant Investor Visa Scheme (“Visa”).
The Visa offers the freedom to work in and travel to and from Australia without limitation.
The Visa will have an initial term of 4 years with two possible extensions of 2 years each.
Immediate family / dependent relatives will also have full work and study rights.
The temporary visa is a pathway to permanent residency, as the Visa-holder will be eligible to apply for permanent resident status after 4 years.
Government’s Visa Requirements
- An investment of A$5m into the Apac Secured Income Fund or other complying investment for a minimum term of 4 years.
- Investment must be approved investments. Direct investment in property and shares is not approved for this purpose.
- Sponsorship from a State Government.
- Maintain investment for the term of the Visa.
- Meet acceptable health checks.
- Obtain a police certificate.
- No English test.
- No age limit.
- No business skills requirement.
- Reduced residency requirement of 160 days over 4 years.
- No requirement to meet the Business Innovation and Investment points test.
For more information on the Significant Investor Visa please refer to the Australian Government’s Department of Immigration and Citizenship website found here.
Apac's SIV compliant investment options
Apac Investment provides three SIV compliant investment options to choose from to cater for different risk profiles.
Through the Fund’s Select Option, investors can invest in fixed term deposits.
Term deposits are generally invested in bank deposits, bank bills and other short term securities. Investors lock in an interest rate for the term of the investment, which is often higher than normal bank deposits.
Usually the longer the term the higher the interest rate paid.
Term deposits are at the low end of the investment volatility scale. Over both short‑term and long-term periods, the likelihood of losing your money or not receiving the interest on your investment is very low. Term deposits are issued by banks and credit unions, which are regulated by the Australian Prudential Regulation Authority (APRA).
Provides for investment in commercial loans, backed by a mortgage over real property assets. No unsecured loans are offered. The level of an investor’s risk appetite can be matched to investment options offered. Furthermore, Apac Investment Management has developed a robust credit and lending process, which typically includes independent property valuation assessments to help mitigate and manage investment risk.
Investors are free to choose the mortgage(s) they wish to invest in based on their risk and return requirements. Returns are typically fixed for the term of the mortgage.
This option is an alternative to property related investment options which typically have a higher risk profile, and for investors with a more conservative investment requirement. Importantly, all loans held by the fund on behalf of investors would be secured via a registered mortgage over real estate
Similar to the Select Mortgages option, however, Apac takes care of the investment selection process for you. Apac will professionally select and manage a pool of commercial loans secured by a mortgage. Returns are variable, and will depend on the loans held in the fund from time to time.
The option will seek to provide consistent monthly income returns mainly generated from interest payment received from the loans held by the Fund. The Fund aims to deliver returns greater than cash investments and government bonds. More specifically, our aim for this option is to deliver returns in excess of the Australian Government Bond yield over a rolling 3 year period.
This Fund provides investors with the ability to invest in Australian real estate (including property development, residential, commercial and other property types).
This investment option provides the flexibility for investors to select their own property or properties to be invested in to provide a customised property investment portfolio.
How to apply
You may wish to utilise the services of a registered Australian migration agent.
Apac can offer an end to end Significant Investor Visa service through its preferred migration service partners in providing local expert migration services in your country of origin.
Apac’s preferred partners can also assist you and your family in providing the following services:
- Re-location services
- Concierge services
- Financial planning and wealth management advice
- Taxation, accounting and investment structuring advice
- Insurance advice (including health insurance)
- Australian legal services
- Buyer advocacy services for new home purchase or property investment purposes
Lodging an application for the Australian Government’s SIV program involves a number of steps including submitting an Expression of Interest form and applying for a state nomination.
Once these steps are completed, applying for an investment in the Fund is simple.
Request a declaration in relation to managed funds (Form 1413) from Apac and complete and submit an application form for the Fund. These forms are available by contacting us.
Further information on the SIV can be found on the Department of Immigration and Citizenship’s website.
You can also find out more about State sponsorship from the relevant State websites listed below.
Australian Capital Territory www.canberrayourfuture.com.au
New South Wales www.business.nsw.gov.au
Northern Territory www.nt.gov.au
South Australia www.migration.sa.gov.au
Western Australia www.smallbusiness.wa.gov.au
Governance and compliance
Apac is an Australian based debt and property related investment company. Apac holds an Australian Financial Services License (No. 439254) issued by the Australian corporate regulator; the Australian Securities & Investments Commission (ASIC). All complying SIV managed fund investments must be offered by an ASIC licensed investment manager. Direct investment into asset classes such as property, mortgages, and listed equities must be undertaken through a complying managed fund structure.
Apac has also established a governance framework which includes the establishment of a Board as well as a compliance and risk management framework. As the manager and trustee of the Fund in charge of its overall operation and management, we are guided by the investment objective and strategy we have set for the Fund, by its governing trust deed, and by our duties under the Corporations Act.
Additionally, Apac has appointed One Managed Investment Funds Limited as the custodian to hold all fund assets independently of the manager. One Managed Investment Funds Limited is licensed by ASIC and holds an Australian Financial Services License (No. 297042) to provide custody services.
Apac has also appointed KPMG, a global accounting firm, as the auditor for the Fund. The auditors are responsible for preparing an audit opinion on the annual financial reports for the Fund.
Frequently asked questions (FAQs)
What is the Significant Investor Visa?
The Significant Investor visa was introduced by the Australian Government as a new stream within the Business Innovation and Investment (Provisional) (Subclass 188) visa and the Business Innovation and Investment (Permanent) (Subclass 888) visa. The Significant Investor Visa commenced on 24 November 2012.
The purpose of the Significant Investor Visa is to provide a boost to the Australian economy and to attempt to entice high net worth individuals that are seeking investment migration. Applicants under the Significant Investor Visa are required to invest $5 million into complying investments for a minimum of four years before being eligible to apply for a permanent visa. Unlike other visa applicants, Significant Investor Visa applicants do not need to satisfy the innovation points test and there are no upper age limits.
Further, there is no English language threshold requirement for Significant Investor Visa applicants. However, all applicants and any dependants over the age of 18 years old who are unable to demonstrate functional English language ability must pay a second instalment of the visa application charge.
What are complying investments?
Complying investments for the Significant Investor Visa include:
- Commonwealth, State or Territory government bonds;
- Australian Securities and Investment Commission (ASIC) regulated managed funds with a mandate for investing in Australia; and
- direct investment into Australian proprietary companies.
Visa applicants may hold investments in each of the above investment options in any proportion and may also change between complying investments, provided they meet specified reinvestment requirements. States of Australia have different requirements around what has to be invested in.
What are the reinvestment requirements if I want to change between complying investments?
As the holder of a Significant Investor Visa, you may switch between complying investments provided the amount withdrawn from an investment is the same amount as what is invested in another investment.
Significant Investor Visa holders have a maximum period of 30 days from the date the funds are withdrawn from one investment to reinvest into another complying investment. Funds invested into another complying investment within 30 calendar days are taken to have been held continuously from the original investment date in complying investments.
What are Commonwealth, State or Territory government bonds?
Commonwealth, State or Territory government bonds are bonds issued by the Commonwealth, or a State or Territory government authority. Some states, New South Wales for example, require a Significant Investor Visa applicant to invest a sum of money in State Bonds (AU$1.5 million in Waratah Bonds). Each State has their own requirements as to the composition of complying investments. The rates paid on Commonwealth, State or Territory bonds will vary. Current rates for New South Wales waratah Bonds can be found at https://www.waratahbonds.com.au/html/rates_1.cfm.
What is an ASIC regulated managed fund?
An Australian Securities and Investment Commission (“ASIC”) regulated managed fund for the purpose of the Significant Investor Visa is a managed investment scheme defined in the Corporations Act 2001 and regulated by ASIC. Any interests issued in the fund must not be able to be traded on a financial market and must be covered by an Australian Financial Services Licence. The managed investment scheme can be a wholesale scheme (otherwise referred to as an unregistered scheme) or a retail scheme (otherwise referred to as a registered scheme).
What requirements must an ASIC regulated managed fund meet to qualify as a complying investment?
For an ASIC regulated managed investment scheme (“Fund”) to qualify as a complying investment for the purposes of the Significant Investor Visa, the Fund must be limited to certain types of investments as specified by the Minister for Immigration in writing.
The investment categories are:
|2||Cash held by Australian deposit taking institutions (including negotiable certificates of deposit, bank bills and other cash-like instruments)|
|3||Bonds issued by the Commonwealth Government or a state or territory government|
|4||Bonds, equity, hybrids or other corporate debt in ASX-listed companies and trusts, or those that are expected to be listed within 12 months|
|5||Bonds or term deposits issued by Australian financial institutions|
|6||Real property in Australia|
|8||Annuities issued by an Australian registered life insurance company in accordance with ss 9 or 12A of the Life Insurance Act 1995|
|9||Derivatives used for portfolio management and non-speculative purposes, which constitute no more than 20% of the total value of the managed fund|
|10||Loans secured by mortgages over the investments listed in items 1 to 8 of the above list|
|11||Other managed funds that invest in the above list of investments|
How do I prove that the ASIC regulated managed funds I invest in meet the visa requirement to be classified as a complying investment?
To prove that the ASIC regulated managed funds you have invested in have only invested in the categories mentioned above, the managed fund must make a declaration on a Form 1413 that their services would be limited to the categories of investments outlined above.
What is an Australian proprietary company?
An Australian proprietary company is a company that is registered as a proprietary company under the Corporations Act 2001. It must be registered with ASIC.
What requirements must a direct investment into an Australian proprietary company meet to qualify as a complying investment?
For a direct company investment to qualify as a complying investment, the applicant must acquire an ‘ownership interest’ in the company, and the company must operate as a ‘qualifying business’.
An ‘ownership interest’ means interests as a shareholder in a company that carries on the business, including interests held directly through one or more interposed companies, partnerships or trusts. You may hold your ownership in any proportion in the Australian proprietary company.
A ‘qualifying business’ means an enterprise that is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public, and is not operated primarily or substantially for the purpose of speculative or passive investment. It must have an Australian Business Number.
Can a Significant Investor Visa applicant invest to establish a new company that is not yet operating as a qualifying business?
A Significant Investor Visa Applicant may choose to invest any part of their complying investment into establishing a new company with the purpose to operate as a qualifying business.
In this case, if the applicant invests in the company for a period of two years or more while holding the provisional visa then the company must operate a qualifying business for at least two years. If the applicant’s period of investment in the company is for less than two years then the company must operate a qualifying business for that whole period.
Otherwise, the Significant Investor Visa applicant must show that you have made a genuine attempt to establish and/or maintain a qualifying business.
How does a Significant Investor Visa applicant show that they have made a genuine attempt to operate a qualifying business?
The Significant Investor Visa applicant must provide evidence that they, or the people responsible for managing the company, have done their best to establish and run a qualifying business in Australia. Evidence may include business proposals, research that has been undertaken, the value of investment used in establishing a qualifying business, and business activities undertaken.
What investment structure can an applicant use to make and hold the complying investments?
Complying investments must be made and held:
- directly by the Significant Investor Visa applicant or together with the applicant’s spouse or de facto partner; or
- through a company where the total amount of issued shares are owned by the Significant Investor Visa applicant or together with the applicant’s spouse or de facto partner; or
- through a valid trust where the trustees and beneficiaries are the Significant Investor Visa applicant or together with the applicant’s spouse or de facto partner.
Through these structures the Significant Investor Visa applicant may hold complying investments in any proportion.
This allows the applicant the flexibility to make their own decisions on the level of investment risk that they undertake and also allows the applicant to exercise their investment skill when constructing and managing their investment portfolio.
Is a Significant Investor Visa applicant allowed to engage another person to manage their complying investments?
The applicant may engage a third party to manage the complying investment on their behalf if they choose to do so. As the holder of a Significant Investor Visa, the applicant is not required to have any direct involvement in managing the complying investments.
Are there requirements around the source of funds an applicant uses to make a complying investment?
The applicant must demonstrate that the assets or funds they use to make the complying investment are unencumbered and lawfully acquired.
At the time of application the Significant Investor Visa applicant is required to provide a statement identifying their ownership and value of assets for a minimum of $5 million proposed to be used to fund the complying investments.
When does an applicant need to make the complying investment?
The applicant will be required to make the investment before the granting of their visa.
It is recommended that the complying investment not be made until the applicant has been informed by the office processing the applicant’s visa to do so. This is to ensure that the applicant has met the remaining visa criteria, including health and character requirements for this visa, prior to making a financial commitment.
Can investments made prior to application for the visa be counted towards the $5 million complying investment?
Yes, if they meet the requirements of a complying investment. However, prior investments must still be held for at least four years on the provisional visa before a Significant Investor Visa applicant become eligible to apply for the permanent visa.
Is it possible to invest in property?
Investments in property will not be considered as a complying investment. However, a Significant Investor Visa applicant may invest in an ASIC regulated managed funds which may invest in real estate in Australia.
What is the process for applying for a provisional Significant Investor Visa?
All intending migrants who are interested in applying for a provisional Significant Investor Visa must submit an Expression of Interest through SkillSelect and be nominated by a State or Territory government in order to receive an invitation to lodge a visa application.
SkillSelect is an online service that enables skilled workers and business people interested in migrating to Australia to record their details to be considered for a skilled visa through an Expression of Interest.
How should a Significant Investor Visa applicant lodge their application?
If an individual has been nominated through SkillSelect by a State or Territory for a Significant Investor visa and you meet other mandatory criteria, the individual will receive an invitation to make an application for a Significant Investor Visa.
The applicant will have 60 days to lodge their visa application using the Department’s electronic lodgement system. If the applicant has not lodged an online application within this time, they will be sent another invitation and will have a further 60 days to lodge their online application.
If an applicant receives two consecutive invitations in SkillSelect but do not lodge a valid visa application as a result of either invitation, their Expression of Interest will be removed from the SkillSelect database. This would mean that the applicant would need to formally resubmit an Expression of Interest to be considered for future invitation rounds.
How does an applicant supply supporting documents?
If an applicant is invited to apply for a provisional Significant Investor Visa, they will need to provide additional supporting documentation directly to a processing centre. The processing centre to which they must send documentation depends on their country of residence. This documentation must be provided at the same time as the visa application.
How do Australian States or Territories nominate applicants?
Once an applicant’s Expression of Interest is in SkillSelect, it can be viewed and a State or Territory can decide whether to nominate the applicant to apply for a visa. The following State and Territory governments have their own criteria for deciding which applicants they will nominate. In some cases, and before an applicant is nominated, the relevant State or Territory will contact the applicant to discuss business possibilities. Other State or Territories may wait for the Significant Investor Visa applicant to contact them.
- Australian Capital Territory: www.canberrayourfuture.com.au
- New South Wales: www.business.nsw.gov.au
- Northern Territory: www.nt.gov.au
- Queensland: www.workliveplay.qld.gov.au
- South Australia: www.migration.sa.gov.au
- Tasmania: www.migration.tas.gov.au
- Victoria: www.liveinvictoria.vic.gov.au
- Western Australia: www.smallbusiness.wa.gov.au
If an applicant is nominated by a specific Australian State or Territory, is the applicant allowed to move to a different State or Territory?
When an applicant is are nominated by a State or Territory for a provisional Significant Investor Visa, it is the expectation of the Department and the State or Territory government that has nominated the applicant that they have a genuine intention to reside in their jurisdiction.
What are an applicant’s options if a State or Territory does not nominate them for a Significant Investor visa?
The Business Innovation and Investment program is a State and Territory government nominated program. An applicant must have been nominated by a State or Territory government to apply for a Significant Investor Visa.
Can I extend my Significant Investor visa?
If an applicant meets the requirements for the Significant Investor Extension stream, they are able to be granted another provisional Significant Investor Visa if they wish. The applicant will be able to apply for a maximum of two additional provisional visas in the Significant Investor Extension stream, bringing the maximum total period on a provisional Significant Investor Visa to eight years.
How does an applicant extend their provisional Significant Investor Visa?
To be able to be granted another Significant Investor visa, an applicant must be nominated by a State or Territory government and have continuously held complying investment for the life of their previous provisional Significant Investor Visa. An applicant can apply online using the Department’s electronic lodgement system.
At the time of application, the applicant must have held a provisional Significant Investor stream visa for at least three years or have not held more than one provisional visa in the Significant Investor Extension stream.
What requirements does an applicant need to meet to be eligible to apply for a permanent Significant Investor Visa?
To be eligible to apply for a permanent Significant Investor Visa, an applicant must:
- be nominated by a State or Territory government;
- have continuously held complying investments for the life of their provisional
- Significant Investor Visa;
- have held the provisional Significant Investor visa for a minimum period of four years; and
- have met the residence requirement.
What does it mean to hold the complying investments for the life of the provisional Significant Investor Visa?
It means that an applicant must hold their original complying investment continuously until they apply for a permanent Significant Investor Visa (for any reinvested complying investments, they are considered holding them continuously if they satisfy the reinvestment requirements). It includes the duration of their original four year provisional Significant Investor Visa and any extension visas granted afterwards.
Visa condition 8557 will be placed on a provisional Significant Investor Visa which requires an applicant to maintain the complying investment. If an applicant breaches this condition their visa may be cancelled.
What happens if the value of an applicant’s complying investment falls below $5 million?
The value of an applicant’s complying investment can fluctuate throughout the duration of their provisional Significant Investor Visa. Provided the applicant does not withdraw their complying investment, they will not be required to provide additional funds to maintain the balance of $5 million. Conversely, if the value of an applicant’s investments increases, they are not allowed to withdraw the increased value.
Should an applicant choose to withdraw their complying investment, they will need to reinvest it into other complying investments within 30 calendar days. Otherwise, the applicant will breach visa condition 8557 to maintain the complying investment and their visa may be subject to cancellation.
Does an applicant still have to hold their complying investments once they are granted a permanent Significant Investor Visa?
If a migrant is granted a permanent Significant Investor Visa, they are no longer required to hold the complying investments. To be granted a permanent Significant Investor visa, the applicant must genuinely have a realistic commitment to maintain business or investment activities in Australia, but they do not need to be made via complying investments.
What is the residence requirement for the Significant Investor Visa?
To be granted a permanent Significant Investor Visa, a primary visa holder must be resident in Australia for at least 40 days for every year or part year that they have held a provisional Significant Investor Visa. The residence period does not need to be met per year but can be met cumulatively over the time the primary visa holder held the provisional visa.
Is an applicant’s family and I able to work or study in Australia as a provisional Significant Investor Visa holder?
In relation to the right to undertake work or study, there is no limitation placed on an applicant or their family members when holding a provisional Significant Investor Visa in Australia.
Where can an applicant find further information about the Significant Investor visa?
Information on the Significant Investor visa can be found on the Department of Immigration and Citizenship’s website www.immi.gov.au/Visas/Pages/188.aspx.