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How Foreign Investment in Australia

The Australian Federal Government, in the interest in attracting foreign investment in Australia, has created three significant innovations designed to make starting a business in Australia easier for businesspeople from other countries.

 

1.Significant Investor Visas

 

The first of these, and perhaps the most important, became effective on 1 July 2015. The government changed the parameters of the Significant Investor Visa (SIV) to make it less of a financial barrier for immigrants to come to Australia and start or expand a business.

 

The SIV programme covers the monetary value required, the time of residency necessary to achieve citizenship and guidelines for employment.

 

Businesses and the individuals running those businesses wishing to establish an operation and residence in Australia need to invest a minimum amount of $5 million AUD over the course of four years, an amount that can be allocated to different areas.

 

These areas of investment favour growth funds in new businesses and smaller private companies and at least $500,000 of the $5 million would need to be allocated to this category of investment. Another $1.5 million would go towards companies that are listed on the Australian Stock Exchange (ASX). The remaining $3 million could be used for a variety of financial assets, including ASX companies, trusts that support infrastructure projects and several others, including residential real estate subject to a maximum of 10 per cent.

 

2.Tax Incentives

 

Investors deemed to be in compliance under the SIV code can receive tax incentives in order to make the transition smoother from a cash flow perspective. These incentives include tax offsets of up $200,000 per year and tax exemptions for certain capital gains.

 

This measure is scheduled to become effective for company shares issued beginning as soon as July 2016 or whenever the Parliament passes the law.

 

3.New Entrepreneur Visa

 

Beginning in November, a provisional form of visa known as the Entrepreneur Visa (EV) offers a new way for immigrants to qualify for permanent residency status. The ideal candidate for the EV programme will be innovators with ideas and funding to start a business with exceptional growth potential in terms of revenue and jobs. A key provision of this residency route is capital backing from a third party, rather than strictly personal funds.

 

The government’s primary target for the EV programme will be those business sectors that focus on information and communication technologies, with a clear preference for businesses that represent opportunities in the sectors of science, technology, engineering and math (STEM).

 

All of these changes to the old immigration system got underway in late 2012. To date, the SIV programme, in its original form and the revised form that became effective mid-2015, almost 800 visas have been issued to applicants that were willing to make the four-year commitment in order to transform their temporary subclass 188 Business Visas from temporary to permanent subclass 888 visas.

 

The programme has so far attracted almost $4 billion in investments in the sort of companies that are essential for future trends in technology and lifestyle and there are pending applications of nearly another $3 billion.

 

In order for an individual, their family and business to be considered, application must be made to Austrade, the government agency tasked with contributing to Australian economic prosperity by attracting productive foreign investments. Being nominated by Austrade would pave the way for visas issued under the SIV or the Premium Investor Visa (PIV) programmes.

 

Potential immigrants that meet the qualifications of the programmes also can enlist the services of a migration consultant who can help ease the transition for newcomers. Potential examples include locating places to live, adapting to the local culture and dealing with societal and bureaucratic issues that are frequently quite different from those to which they were accustomed in their place of origin.

 

For Australian investors of all kinds, attracting new and innovative companies that represent the leading wave of the direction in which the future is rapidly unfolding is critical to providing investment opportunities that offer explosive growth potential.

 

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