Yesterday after a massive week of budget hysteria the Australian Federal Government quietly announced new frameworks for the Significant Investor Visa & established a new class of Premium Investor Visa.
The Investor Visa changes are massive improvements for the Startup world. They are primarily aimed at attracting wealthy Asian investors by offering accelerated visas in exchange for significant investments into Australia and its businesses specifically setting a minimum of $500,000 to be invested into complying Venture Capital or Private Equity funds.
It’s not clear why these changes were not prominent in the budget, certainly they are a stroke of genius.
Perhaps programs that allow you to buy your way to permanent residency are not politically palatable and best left out of the media scrum that is the budget.
Arguably these changes are potentially far more impactful for the Australian Startup scene than anything announced in the last five years of budgets.
Significant Investors will be granted a visa for investing $5 million and Premium Investors will be granted permanent residency in 12 months for investing $15 million.
Essentially these visas allow wealthy immigrants to get accelerated permanent residency in exchange for investing significant capital into complying investments.
Under the old program, Significant Investor Visa requirements effectively precluded Investors from starting new businesses or funding Startups.
The new programs include a requirement that each investor must invest at least $500,000 in eligible Australian Venture Capital or Private Equity fund(s) that invest 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.
While these are open to any Nationality they are aimed squarely at successful Chinese who want to gain permanent residency and an income stream outside China.
To date Chinese mainland and Hong Kong applicants make up 93% of all applications.
The numbers of investors and the funds invested are staggering.
The table from the Department of Immigration and Border Protection shows statistics since commencement of the SIV on 24 November 2012 until 31 March 2015.
|Expressions of Interest (EOI) submitted through SkillSelect
|Invitations to apply for a SIV issued as a result of applicants being nominated by a state or territory government
|Primary applications lodged
|Primary visas granted
As of 31 March 2015:
- 47.6 per cent of primary visa applications have been on hand for less than three months. The service standard for the Business Innovation and Investment visa is 6-9 months.
- AUD 3.755 billion has been invested in Complying Investments.
- AUD 2.770 billion is proposed to be invested in Complying Investments.
Monthly applications financial year to date are up 15% on last year.
Based on the minimum requirement of $500,000 per application and the number of applications we expect that the Australian Venture Capital & Private Equity Industry will see an increase of new funds in the order of $200-1000 million per year.
Note the option of either Venture Capital or Private Equity, the trick now is for Australian Venture Capital Funds to convince Chinese Investors that they should invest in Venture Capital rather than Private Equity.
Certainly this is fantastic news for the Australian Startup scene and will almost certainly lead to the creation of more Venture Funds and the bolstering of existing funds.
In my day job I review and select inventions (over 500 in last two years) and run a small team to prototype and commercialise inventions.
In my spare time I mentor startups and publish Startup88.com
If you are Chinese or Hong Kong or other nationality seeking to apply for a Significant or Permanent Investor Visa and you wish to discuss the Australian Startup & Venture Capital Scene please contact me via Linkedin if I can assist you.
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