The Business Innovation and Investment program is for migrants who have demonstrated experience and success in business or investment. The program attracts prominent business people and investors from across the globe and increase economic growth and innovation in Australia. For more information about how to apply and the flexible options available, see our blog.
An article written by Cara Waters on 6 February 2014 in SmartCompany, states the program has seen the number of Chinese multimillionaires investing in Australia skyrocket since the significant investor visa was introduced in November 2012. According to Department of Immigration and Border Protection, over the past year 601 applications were lodged with approximately 85.2% of those lodged by Chinese nationals. Berrick Wilson, managing director at Korda Mentha Accounting firm, states that investors are looking at more passive investment options, such as government bonds, because these are less risky than investing in businesses. Government bonds are an example of a complying investment option which is available to significant investors.
What is a complying investment?
Complying investments for the Significant Investor visa include:
1. Commonwealth, State or Territory government bonds
These are simply bonds issued by a Commonwealth, State or Territory government authority. You do not have to hold the bonds for any specific period of time or for any specific purpose.
2. Australian Securities and Investment Commission (ASIC) regulated managed funds with a mandate for investing in Australia; and
An ASIC regulated managed fund is a managed investment scheme defined in the Corporations Act 2001 and regulated by the Australian Securities and Investment Commission. 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.
For an ASIC regulated managed fund to qualify as a complying investment it must be a category specified by the minister. These categories include:
- infrastructure projects in Australia
- bonds issued by the Commonwealth or a State or Territory government
- cash held by Australian deposit taking institutions
- bonds, equity, hybrids or other corporate debt in companies and trusts listed on an Australian Stock Exchange
- bonds or term deposits issued by Australian financial institutions
- real estate in Australia; and
- Australian agribusiness.
3. Direct investment into Australian proprietary companies.
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.
For a direct company investment to qualify as a complying investment, you 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 (ABN).
What isn’t considered a complying investment?
Investments in property will not be considered a complying interest for the purposes of your significant investor visa. There are options for you to invest in ASIC regulated managed funds, however, which may include real estate in Australia.
Can I change between complying investments?
Yes! As a holder of a significant investor visa you can switch between complying investments as long as the sum withdrawn corresponds with the sum reinvested. You have 30 days from the date you withdraw the funds to reinvest in other complying investments.
Can I ask a third party to manage my complying investments?
Yes! You do not have to have any direct involvement in the management of your complying investments if you choose.
When do I have to make my complying investment?
This will need to be done before the grant of the visa. Your case officer will contact you and let you know when to make your complying investment.
For more information about the significant investor visa and your investment options, please contact a member of our migration team.