Summary
of the announcement made by the Dept of Immigration and Border Protection (DIBP)
on the Significant Investment Visa (SIV) and the Premium Investor Visa (PIV)
The DIBP has made an announcement on 15 May 2015
regarding the complying investment framework for the SIV and the PIV.
1.
Elements
that apply to all investments for the SIV and the PIV
· The
funds must be unencumbered and lawfully acquired;
· Investors
are required to reinvest funds within 30 days of withdrawing them from a
complying investment or cancelling the investment in order for the investment
to continue to be complying;
· Direct
investment into residential real estate is excluded and indirect exposure
through investment vehicles is to be restricted to less than 10 % of a
vehicle’s net assets; and
· Exclude
“loan back” arrangements where the investment is used as collateral by
investors.
2.
Complying
investment framework that only apples to the SIV
There
are two mandatory investment components and one balancing investment component:
- At least $500,000 in
eligible Australian venture capital or growth private equity fund(s)
investing in start-up and small private companies. The Government expects
to increase this to $1 million for new applications within two years as
the market responds;
- At least $1.5 million in an
eligible managed fund(s) or Listed Investment Companies (LICs) that invest
in emerging companies listed on the Australian Securities Exchange (ASX);
and
The balancing component:
- A ‘balancing investment’ of
up to $3 million in managed fund(s) or LICs that invest in a combination
of eligible assets that include other ASX listed companies, eligible
corporate bonds or notes, annuities and real property (subject to the 10
per cent limit on residential real estate).
What
about the PIV requirements?
It is still very much a work in
progress as far as the government is concerned.
They have decided the following will
apply at least:
· There
are no mandatory complying investment
components with which the PIV must comply;
· The
Austrade will take the role to nominate the PIV applicant. Austrade will assess
the nomination application against the criteria based on entrepreneurial skill
or talent and ongoing benefit to Australia and character/ integrity check. the PIV can only be applied for by invitation
of Australian government.
· It
is not clear how Austrade will headhunt or invite the PIV applicant?
What
must the PIV invest in?
On the first reading, it seems the PIV can invest in the following areas as complying investment:
(a) Australian
securities exchange listed assets;
(b) Australian
government or semi-government bonds or notes(NB: the SIV is not allowed to
invest in Australian government bonds under the new framework);
(c) Corporate
bonds or notes issued by an Australian exchange listed entity
(d) Australian
proprietary limited companies;
(e) Real
property in Australia excluding residential property (NB: the SIV is allowed to
indirectly invest in residential property with no more than $500,000);
(f) Deferred
annuities issued by Australian registered life companies; and
(g) S&T
government approved philanthropic donation.
There is no indication yet from Austrade as to what
percentage of the fund the PIV must invest in the above mentioned areas.
So we wait a bit more to see the process will develop.
