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Under the Federal Government's Significant Investor Visa initiative, a visa may now be obtained1 by an investor of $5 million2 in certain complying Australian investments if the investor meets residence requirements and is nominated by a participating AustralianStateor Territory. The visas are for 4 years with 2 possible extensions of up to 2 years each.
Snapshot for fund offerors
A fund that qualifies for visa applicant investment must be:
State and Territory criteria for nominating visa applicants may also be relevant.
As a State or Territory must nominate the visa applicant, the various States and Territories may impose requirements for nomination.
Guidelines have been published specifically for significant investor visa nominations by NSW, SA and Tasmania. Guidelines for Victoria and the ACT are expected to be published shortly. Investment in the nominating State or Territory may be required. For instance, to be nominated by:
Over the 4 year visa period, the investor must spend at least 160 days resident in Australia.
The period of residence in any year can be less than 40 days, provided that the total is met over the 4 years. The applicant must have a genuine intention to reside in the State or Territory that nominated the applicant for the visa.
The $5 million investment must be made before the visa is granted. However, to ensure that the other criteria for the visa have been met, the Department of Immigration has indicated that the investment should only be made after the office processing the application tells the applicant to proceed.
When the application for the visa is made, the applicant will need to demonstrate that the assets or funds to be used for the investment are available, lawfully acquired and unencumbered.
Prior investments can count toward the $5 million but any prior period for which the investment has been held will not reduce the 4 year investment period required to obtain the visa. The entire $5 million need not be invested in one investment. The applicant can hold several investments and the investments need not be all of the same type or category. The intention is that the $5 million investment will be held for the whole period of the visa. Investments that are realised during the period of the visa must be reinvested into another complying investment within 30 days.
If the value of the investments falls, then this will not mean that the requirements for the visa have not been met or that a top up is required. However, if the value of the investments rises, then the extra value cannot be withdrawn from the investment and retained by the holder of the visa.
The investment must be held by:
A visa applicant's $5 million of Australian investments may be in:
A managed fund is a complying investment if it:
The Fund's responsible manager must make a compliance declaration (Form 1413) confirming that the mandate for the Fund is to invest only in Australian assets that are limited to:
The declaration will be published on the Department of Immigration & Citizenship website.
Direct investment can only be made in an unlisted proprietary company that carries on a "qualifying business". A qualifying business is an enterprise that is operated for profit in providing goods or services (other than rental property business) to the public, and is not operated primarily or substantially for speculative or passive investment.
The business can be a new start-up business, but must operate for the period of the visa. If the business is not operated for the whole visa period then it must be shown that a genuine attempt was made to establish and maintain the business.
1 This visa is possible as a result of changes, under the Migration Amendment Regulation 2012 (No, 7), to the subclass 188 visa in the Business Innovation Stream and subclass 888 visa in the Investor stream.
2 Australian dollars.
3 Given that a trust cannot exist if the sole trustee and beneficiary are the same, there must be an additional (spouse/de facto) trustee and/or beneficiary.
With significant regulatory change coming into effect the spotlight is staying firmly on
culture, ethics and regulatory compliance. An organisation’s social licence to operate
remains a priority...
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