The Australian government has made changes to the Significant Investor Visa (SIV) regime that apply from 1 July 2021.
SIV holders who applied before 1 July 2021 are still subject to the previous regime.
What do the changes mean for existing SIV fund managers?
Managers of SIV funds established with the former SIV rules in mind may continue to accept new SIV investors.
However new obligations may apply to SIV fund managers or change the way that their funds operate.
What is the SIV regime?
The SIV stream of subclass 188 visas offer entrepreneurial and high net worth individuals a pathway to permanent residency if they are willing to make “complying investments” in areas of the Australian economy, without complications that apply to other visas such as English language tests, business skills assessments or age limitations.
Any person willing to invest $5,000,000 in accordance with the complying investment framework (Framework) set out in the Migration (IMMI 15/100: Complying Investments) Instrument 2015 (Instrument) may apply for an SIV.
Key changes are described below.
Complying investment framework allocations
The Instrument now specifies the investment allocations in percentages as follows:
| Before 1 July 2021 | After 1 July 2021 | |||
|---|---|---|---|---|
| Venture capital and private equity | 10% | $500,000 | 20% | $1,000,000 |
| Emerging companies | 30% | $1,500,000 | 30% | $1,500,000 |
| Balancing investments | 60% | $3,000,000 | 50% | $2,500,000 |
Timeframes
| Before 1 July 2021 | After 1 July 2021 | |
|---|---|---|
| SIV is valid for: | 4 years | 5 years |
| May apply for permanent residency after: | 4 years | 3 years |
Audit requirement
Emerging company and balancing investment fund managers must obtain annual independent audit reports showing their compliance with the Framework.
Use of derivatives
Derivatives may not be used to materially reduce an investor’s exposure to the market price of emerging companies’ securities.
Emerging companies loophole closed
Investments in emerging companies may not be made where the proceeds are used to make further investments that do not meet the emerging companies market capitalisation requirements. For example, an investment in a small exchange traded fund which invests in the securities of large capitalised companies is excluded.
Other technical amendments and clarifications
- Venture capital and private equity investments may be made through fund of funds structures.
- A fund of fund investment must meet the definition of a managed investment fund under the Instrument.
- Applicants must enter into an agreement to make their venture capital and private equity investments within 6 months of the grant of their visa (12 months earlier than the old regime).
- Emerging companies investments may not be made where the proceeds of the investment is used to make further investments that do not meet the emerging companies market capitalisation requirements. For example, a small exchange traded fund which invests in the securities of large capitalised companies is prohibited.
Extension of SIV complying investment framework to Investor Visas
The Investor Visa stream will increase from $1.5 million to $2.5 million and its investment rules will be aligned with the SIV complying investment framework.
