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Significant investor visa
The document discusses Australia's Significant Investor Visa (SIV) program. The SIV program allows high net worth individuals to obtain a provisional visa by investing a minimum of $5 million AUD in eligible Australian investments. Eligible investments include government bonds, managed funds, and private companies. The provisional visa has an initial 4 year term and can be extended for up to 8 additional years. After the required residency period, individuals can apply for permanent residency. The document provides details on the SIV application process, eligible investment options, tax considerations, and contact information for an advisory firm that can assist with SIV applications and compliance.
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Significant investor visa
- 1. SIGNIFICANT INVESTOR VISA 29May 2013 www.pennampartners.com
- 2. Notice • This documentis provided for informational purposes only and should not be relied upon as legal, tax, commercial and/or investment advice. The information provided is current as at the date contained herein. No update will be provided to you for any subsequent change to this document. • The information contained herein may be subject to copyright pursuant to Part VB of the Copyright Act 1968 . The information cannot be printed, reproduced, copied, saved, altered and/or distributed in its totality or in parts by/to unauthorised parties. Wealth Manager – Australian Financial Services Licensee Tax services – Australian tax agent Advisory – Authorised Corporate Representative
- 3. How can wehelp? Wealth Manager – Australian Financial Services Licensee Tax services – Australian tax agent Advisory – Authorised Corporate Representative Application Ongoing Investment compliance advice Investment monitoring Investment sourcing and/or review Re-allocating/re-weighting of investment(s) to meet your financial circumstances Due diligence Directorship services Tax advisory on initial investment and for interposed investment holding entity Annual tax compliance and tax advisory on divestment and re-investment Setting up interposed investment holding entity Designing and implementing an ‘eligible’ investment plan Drafting of business plan for private company investment
- 4. Background • In November2012, the Australian government has implemented reforms to the Australian Migration program. The Business Skills visas have been replaced by the New Business Innovation and Investment Program. • Broadly, the changes will streamline the number of visa subclasses to 3 main categories, being: – Business talent; – Business innovation and investment; and – Business innovation and investment (no points tested). • The aim is twofold: 1) increase foreign capital mobility into the Australian economy and 2) attract entrepreneurs with innovative businesses. • Each category has their own requirements that need to be met. However, the categories broadly revolve around business ventures, innovation and investment contributions. • Of particular note, the Australian government has introduced a visa for high net worth and ultra-high net worth individuals (“significant investors”) who wish to obtain residency in Australia. One of the main requirements is the applicant must be able to commit a minimum of AUD $5 million into Australian complying investments whilst holding the subclass 188 visa. • In addition, the Australian government is encouraging/facilitating the relocation of entrepreneurs where the latter have been funded by a member of the Australian Venture Capital Association Limited with a minimum of AUD $1 million investment having been made.
- 5. Visa Pathways Business Innovation &Investment (subclass 188) Business Talent (subclass 132) Business Innovation stream (188A) Investor stream (188B) Significant Investor stream (188C) Provisional visas Investment inflow Business Talent (132A) Venture Capital Entrepreneur (132B) Skills inflow Permanent visas (subclass 888) Permanent visas Min. 4 years
- 6. SIGNIFICANT INVESTOR REGIME Wealth Manager– Australian Financial Services Licensee Tax services – Australian tax agent Advisory – Authorised Corporate Representative
- 7. Overview Concessional treatment: • NoEnglish test required; • No upper age limit; • No innovation points test; and • Minimal Australian stay required during the provisional visa period Investment specifications: • A minimum of AUD 5M to be invested in Australian investments; and • Investments are limited to: • Federal/State/ Territory bonds; • ASIC regulated unlisted managed funds; and/or • Australian private companies SIV applicant Visa covers spouse, children and any other dependent of the SIV applicant.
- 8. Process Expression of Interest(“EOI”) Via SkillSelect (DIAC) Apply for State Nomination Provision of investment support documentations Invitation to lodge formal visa application Only if nomination has been successful Investment(s) to be finalised prior to grant of visa
- 9. Statistics *Based on publicinformation available as at 28/05/2013; more approvals are expected to follow. 1 Approval 170 Applications 279 Invitations 384 EOI
- 10. Term • Term forthe provisional visa is a minimum of 4 years: – Applicants can apply for the subclass 888 permanent visa after that time; or – Extend the provisional visa by a maximum of 4 years (2x2) Provisional visa 4 yr term 1st extension 2 yr term 2nd extension 2 yr term Permanent visa (888)
- 11. Complying investments SIV visa holder Federal/State/Territory bonds Unlisted ASIC regulatedmanaged funds Australian private companies Can also hold interest via interposed trust/company (rather than directly)
- 12. Semi-Government bonds State/Territory BondsTerm Compulsory ACT N/A N/A N/A New South Wales Waratah bonds 4 years Yes(1) Northern Territory Territory bonds 1-5 year(s) No Queensland QTC bonds 4 years No South Australia SAFA bonds 1-4 year(s) No Tasmania TSG bonds 5/10 years No Victoria Govt. bonds (VIC) 4 years(2) No Western Australia WA State bonds Various No (1) Minimum of AUD1.5M (2) Buyback mechanism on offer
- 13. Managed funds Managed funds Australian Infra projects Cash deposited @ ADIs Govt/ Semi-govt bonds Listeddebt/ equity/ hybrid Bonds/term deposits by Australian FI Australian real property Australian agribusiness
- 14.
- 15. Private company SIV visa holder Private company Active & qualifying business Canbe an existing or a startup company Equity interest onlyMatters to consider, including: • Business plan for assessment of investment and for visa application; • Valuation on entry & exit; • Shareholders’ Agreement; • Board/observer seat; • Alternate directorship; • Management reporting & accountability; and • Exit flexibility
- 16. Food for thoughts TaxMiscellaneous Australian tax residency classification Quality of assets Interaction of foreign tax laws Risk appetite & returns expectations Application of double tax treaty (if any) Supplementary semi-government requirements After-taxed returns on investment(s) Investment lock-in period Re-allocation of investment(s) – disposal for tax purposes Liquidity/exit strategy Australian tax withholding regime(s) Ongoing compliance with visa conditions Interposed investment holding vehicles & tax leakage Start with the end in mind: requirements for subclass 888 Transitioning into subclass 888 & tax implications FIRB
- 17. Contact details • AmirthanArasaratnam • amirthan@pennampartners.com • +61 433 256 936 • Yanese Chellapen • yanese@pennampartners.com • +61 38635 1987 • www.evermoremoney.com.au • www.macheladvisory.com.au • www.pennampartners.com • Level 10 • 530 Collins Street • Melbourne VIC 3000 • Australia Wealth Manager – Australian Financial Services Licensee Tax services – Australian tax agent Advisory – Authorised Corporate Representative