SIV in popular demand
Since Australia’s federal election in 2013, there has been a large increase in visa approvals under the Significant Investor Program. There has also been a steady increase in the number of applications lodged, writes Ivan Chait.
Between November 24, 2012 when the Significant Investor visa category was introduced and February 28, 2014, more than 1,100 expressions of interest for Australian’s significant Investor Visa have been lodged.
Dubbed the $5 million visa, the SIV is particularly popular with the Chinese migration market.
Victoria and New South Wales are the two favoured states for sponsorship. As at February 28, 2014, 84 percent of all expressions of interest lodged with the Department of Immigration and Border Protection for the SIV were sponsored by either Victoria or NSW. Of these applications, approximately 90 percent were from Chinese applicants.
There are a number of reasons why demand for the significant investor visa in Australia has increased including:
• Increase in awareness of this visa category for high net worth individuals. In China in particular there has been extensive media coverage on this program which is further enhanced by advertising and seminars held regularly throughout China.
• Canada has recently cancelled its investment visa program with the result that attention has turned to Australia as another option.
• The new coalition Government in Australia has been very supportive of this program and has focused on resolving some of the significant implementation issues.
• The significant investor visa in Australia has been operating since November 2012 and there is now a greater understanding of the requirements of the Department of Immigration as well as relevant State Governments, with a result that better quality and more complete applications are being submitted.
The Significant Investor visa program is attractive to prospective migrants particularly from China for the following reasons:
1. Evidence of English language is not required
2. No upper age limit
3. Once approved, Significant Investors are only required to spend a minimum of 40 days a year in Australia or 160 days over four years which is attractive for both business and tax reasons.
Although the Significant Investor Visa is an attractive option for high net worth applicants and the broad criteria are clear, many prospective applicants have difficulty in providing evidence in relation to source of funds. The purpose of this requirement is to ensure that the funds to be used for investment in Australia have been lawfully acquired and are unencumbered. Practically, this means that whatever assets are included in the applicant’s statement of assets and liabilities, must be substantiated both in terms of ownership and value. Applicants must also be able to explain how they came to own the asset and how they have accumulated their wealth.
Unlike the previous investor visa subclass 165 category, the significant investor visa does provide visa holders with the opportunity to extend their initial provisional visa for a further two periods of two years each. As such, Significant Investor Visa holders have the opportunity to meet all requirements for the granting of permanent residence such as the residency requirement if they were unable to meet this requirement during the initial four-year period.
In another positive development the Australian Government has recently announced a review of the Significant Investor Visa program. This review will examine ways of enhancing greater flexibility and investment choices to significant investor visa applicants as well as faster processing of these applications. This review will also examine the possibility of introducing a new permanent visa stream for investment migrants.
One of the requirements to be met for the grant of permanent residence by applicants who have held a significant investor (provisional) visa, subclass 188 for at least four years is that the A$5 million investment in Australia must be held only in complying investments for the full four years. Complying investments include:
• Australian Commonwealth, State or Territory Government Bonds
• Australian Securities and Investment Commission (ASIC) regulated managed funds
• Direct investment into Australia propriety companies
Complying investments do not include the purchase of a family home in Australia. Applicants seeking to purchase a home in Australia will need to transfer additional funds to Australia in addition to the A$5 million for investment in complying investments. It is also important to note that as the significant investor visa is a provisional visa initially, applicants must obtain approval from the Foreign Investment Review Board (FIRB) prior to purchasing real estate in Australia.
As mentioned above, the current review of the significant investor program will consider extending the current list of complying investments. For example intermediated investments through private equity and venture capital funds are excluded from the current list of complying investments. In my opinion the range of complying investments should not be too broad as by so doing could increase the risk associated with the investments and potentially expose significant investors to exploitation by unscrupulous investment managers.
In order to ensure that investments are complying investments, significant investors should ensure that the investment manager of the managed fund in which they invest their funds makes a declaration on a form 1413 that the investment is a complying investment. ■
*Ivan Chait is the General Manager of Santa Fe Visa & Immigration and a registered migration agent.
Ivan Chait has practiced as an Australian visa & Immigration consultant since 1985 and is an associate fellow of the Migration Institute of Australia.
Ivan was the inaugural National Chairman of the Australia Southern Africa Business Council and previously National Treasurer and Director of the Migration Institute of Australia, the professional industry association, which at that time included the Migration Agent Registration Authority.
Being a Chartered Accountant by qualification, Ivan has for the past 28 years specialised in Australia’s business and Investment visa categories as well as employment migration in particular although has worked with all categories of permanent and temporary residence to Australia.