January 31

SIV and Investor Visa Update: Jan 2021

SIV & Investor Visa Update: Jan 2021

Busines Innovation and Investment Program (BIIP)

In 2020 the DHA undertook a review of the BIIP under the name of Getting a better deal for Australia from business and investment visas. As experienced investment advisers and key SIV stakeholders, we were asked by DHA to participate in this review.

The number of places available in the BIIP has almost doubled from 6,862 to 13,500 for 2020-2021.

Key changes (in effect from July 2021):

  • From 1 July 2021, the program will be simplified from nine to four visa streams: Business Innovation, Entrepreneur, Investor, and Significant Investor. There will be a clear pathway to permanent residency for each category.
  • The Premium Investor, Significant Business History and Venture Capital Entrepreneur visas will be closed to new applications from 1 July 2021. Applications already lodged for these visas will still be processed.
  • Provisional visa holders in all four streams will be able to apply for permanent residence if they meet the requirements after three years, but the provisional visa will now be valid for five years, meaning they have additional time to meet the requirements.
  • Business Innovation and Significant Investor visa holders will also continue to be able to extend their provisional visas if they do not meet the business and residence thresholds in the required timeframes.
  • Business Innovation provisional visa holders can apply for a two year extension provided they demonstrate a realistic commitment to continuing to manage a business that has been actively operating in Australia for the previous two years.
  • Significant Investor provisional visa holders can apply for two 2 year extensions provided they continue to maintain their complying significant investment.
  • The requirements for Business Innovation visa holders will be increased to ensure the program is attracting migrants with proven business skills. Business Innovation visa holders will be requirement to hold business assets of $1.25 million (up from $800,000) and have an annual turnover of $750,000 (up from $500,000) to prove their business acumen.
  • The $200,000 funding threshold required for Entrepreneur visa applicants will be scrapped, but applicants will need to be endorsed by a State or Territory government.
  • The Government will also be consulting widely with industry to inform changes to the Complying Investment Framework. Any changes to the Complying Investment Framework will be announced in the early half of 2021. We have been asked to consult further with Government in regards to the potential changes to the asset allocation of the framework.
  • As investment advisers, we do not support any increase in the VCPE component. The investment horizon of venture capital fund can be ten years or more. This is well beyond the term of a provisional 188C visa. Even UHNW and HNW, investors with a large appetites for risk only invest a small portion of their portfolios into venture capital. The current SIV framework already has a healthy 10% allocation to venture Capital. Of course a few VC fund managers with a vested interest in such an increase would disagree with the views of the financial advice community.

188B Investor Visa

Close to half of the respondents in the review recommended an increase from the current threshold of $1.5m to between $2m - $3m.

More than a third of submissions agreed that IV funds should be moved away from state and territory government bonds into more active investment. Most of these suggested using parts or all of the existing CIF.

Given the current low interest rate environment, there is a good chance we may see a change to the investment framework from state government bonds to something akin to a mini-SIV. This would make sense, we believe it is important for investment migrants to have a good investment experience in Australia to maintain our reputation as a destination for capital.

Victoria’s new 188B Investor Visa – Additional $500,000 investment into VC

Victoria has introduced a new requirement for 188B Investor Visa nominations where an additional $500,000 must be invested into a Victorian based VC fund. They have also strongly advised that any applicant seeks professional investment advice from a qualified and registered financial adviser.

Source: https://liveinmelbourne.vic.gov.au/migrate/business-investor-visas/188-investor-stream

It is possible that this requirement will be temporary until a new 188B Investor Visa framework with higher thresholds is introduced from 1 July 2021.

We have had a successful 188b investment solution in place since 2012 and are ready to assist your clients with advice on the required complaint investments.

Do you have 188C SIV or 188B Investor Visa clients on their provisional visa?

It is imperative for both SIV and Investor Visa clients to have a review of their investments by qualified specialist financial advisers. Fund managers are not financial advisers and typically won’t provide any advice outside of their own product. We have seen applicants who unfortunately had not sought financial advice before making their investments and consequently had very bad experiences. Please contact us to initiate a review. We are happy to provide this at no cost as part of our service and ongoing commitment to helping the investment migrants to get the best possible advice.

Maturing 188B Investor Visa bonds: Investor Visa holders are now finding themselves in a much lower interest rate environment than 4 years ago when they first applied for their fixed rate bonds. We are ready to assist your 188B Investor Visa clients with investment options upon bond maturity.

Before your clients apply for their 888 PR visa

Additional investments separate from the Complying or Designated investments are highly regarded by the nominating state governments and should in due course be included in their Permanent Residency nomination / application. This will demonstrate their ongoing commitment to Australia and assist satisfying Common criteria 888.213. It is also a good way to diversify their portfolio and put these funds to work. Our recommendations would primarily consist of direct investments as there is no requirement to use managed funds outside of the Complying Investment Framework. Direct investment into asset classes such as shares, listed fixed interest and property REITs are a much more transparent way of investing and is more cost efficient than managed funds.

We can help you and your clients draft the required 1-page summaries outlining current investment activities and future investment intentions.

During these difficult times we are conducting initial consultations and follow up meetings via Zoom or WhatsApp conferencing. For more information, please email [email protected]

Once again, thank you for all of your support over the COVID-19 lockdown. We look forward to working with you to help your clients obtain their Australian SIV and also have a great SIV Investment experience.

Brett Waller Ord Minnett Director SIV Investment Service

Brett Waller

MANAGING DIRECTOR - SIV INVESTMENT SERVICE

After a career spanning over 25 years of Private Banking and Trade Finance, Brett moved to Asia joining ipac Singapre as a Senior Vice President in 2005. Joined Ord Minnett in 2012, and established the SIV Ord Minnett Investment Service.


[email protected]

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Tags

Investor Visa, Update


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