Comasters Law Firm and Notary Public | Business Innovation and Investment Visa from 1 July 2015
16828
portfolio_page-template-default,single,single-portfolio_page,postid-16828,ajax_fade,page_not_loaded,,qode-theme-ver-9.1.3,wpb-js-composer js-comp-ver-4.11.2.1,vc_responsive
 

Business Innovation and Investment Visa from 1 July 2015

View as PDF

 

On 1 July 2015, changes to the Business Innovation and Investment (Provisional) visa (subclass 188) commenced. The main changes were the introduction of the new complying investment framework under the Significant Investor Stream and the introduction of a Premium Investor Stream. These changes are aimed at attracting applicants with business and entrepreneurial skills and capital to enhance investment into innovative Australian businesses and the commercialisation of Australian ideas, research and development.

 

1. VISAS AND VISA STREAMS

The Business Innovation and Investment (Provisional) visa (subclass 188) is part of the Business Innovation and Investment Program. Holding this visa is the first stage before becoming eligible to qualify for a Business Innovation and Investment (Permanent) visa (subclass 888). The visa includes four streams:

  • Business Innovation stream: for people with business skills who want to establish, develop and manage a new or existing business in Australia.
  • Investor stream: for people who want to make a designated investment of at least $1.5 million in an Australian state or territory and maintain business and investment activity in Australia.
  • Significant Investor Stream: for people who are willing to invest at least $5 million into complying significant investments in Australia and want to maintain business and investment activity in Australia.
  • Premium Investor Stream: for people who are willing to invest at least $15 million into complying premium investments in Australia and want to maintain business and investment activity in Australia.

 

2. NEW COMPLYING INVESTMENT FRAMEWORK FOR THE SIGNIFICANT INVESTOR STREAM

Under the new arrangements, Significant Investor Stream applicants will be required to invest at least $5 million over four years in complying investments, which must now include:

  • At least $500,000.00 in eligible Australian venture capital or growth private equity (VCPE) fund(s) investing 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);
  • At least $1.5 million in an eligible managed fund(s) or Listed Investment Companies (LICs) that invest in emerging companies; and
  • A ‘balancing investment’ of up to $3 million in managed fund(s) or LICs that invest in a combination of eligible assets that include Australian listed securities, eligible corporate bonds or notes, annuities and real property (subject to the 10% limit on residential real estate).

 

3. NEW PREMIUM INVESTOR VISA (PIV)

The PIV has been introduced to attract a small number of highly talented and entrepreneurial individuals who can translate those skills and talents into areas which deliver a long-term economic benefit in Australia. The PIV will only be available at the invitation of the Australian Government and expressions of interest will not be accepted.

 

4. APPLICATION PROCESS

Intending migrants will first need to submit an expression of interest (EOI) on SkillSelect and be nominated by a state or territory government or Austrade on behalf of the Australian government before being invited to apply for the visa. An EOI is not an application for a visa. After an invitation to apply is received, the applicant will then have 60 days to apply online for the visa.

Applications under the Investor stream, the Significant Investor stream or the Premium Investor stream, must make the designated investment, complying significant investment or complying premium investment before being granted a visa. The applicant must make the investment when invited in writing to do so.

 

5. VISA REQUIREMENTS

The applicant must meet the health and character requirements under the visa. The applicant will also have to meet the additional requirements for each visa stream.

 

BUSINESS INNOVATION STREAM

The applicant must:

  • Be under 55 years of age, although a state or territory can waive this requirement if the proposed business will be of exceptional economic benefit to the nominating state or territory.
  • Score at least 65 on the points test at the time of invitation to apply (see page 4).
  • For two out of the four fiscal years immediately before the invitation to apply, have had an ownership interest in an established business or businesses that had at least $500,000 turnover in each of those years.
  • Have a total net business and personal assets of at least $800,000 that are lawfully acquired and available for legal transfer to Australia within two years of the visa being granted.
  • Own at least one of the following percentage of the nominated main business:
    • 51%, if the business has a turnover of less than $400,000 per year
    • 30%, if the business has a turnover of $400,000 or more per year
    • 10%, if the business is a publicly listed company.
  • If the nominated main business provides professional, technical or trade services, the applicant must have spent no more than half the time providing those services, as opposed to general management of the business.
  • Have an overall successful business career.
  • Have a genuine desire to continuously own and maintain a management role in a business in Australia.

 

INVESTOR STREAM

The applicant must:

  • Be under 55 years of age, although a state or territory can waive this requirement if the proposed investment will be of exceptional economic benefit to the nominating state or territory.
  • Score at least 65 on the points test at the time of invitation to apply (see page 4).
  • Have a high level of management skill in relation to the eligible investment or qualifying business activity.
  • Have at least three years’ experience of direct involvement in managing one or more qualifying businesses or eligible investments.
  • For at least one of the five fiscal years immediately before the invitation to apply have directly managed either a qualifying business with at least 10% ownership interest or owned at least $1.5 million in eligible investments.
  • During the two fiscal years immediately before the invitation to apply, have legally acquired net business, investment and personal assets of at least $2.25 million that are available for legal transfer to Australia within two years of the visa being granted.
  • Make a designated investment of at least $1.5 million in a state or territory government security using unencumbered funds accumulated from qualifying businesses or eligible investments and be prepared to hold that investment for at least four years from date of issue in the nominating state or territory.
  • Have an overall successful record of eligible investment or qualifying business activity.
  • Have a genuine and realistic commitment to continuing the business and investment activity in Australia after the original investment has matured.
  • Have a genuine intention to live for at least two years in the state or territory in which the designated investment is made.

 

SIGNIFICANT INVESTOR STREAM

The applicant must have net assets of at least $5 million that are legally acquired, unencumbered, and available to be used to make the complying investment in Australia over four years in the framework set out at point 2 above and have a genuine and realistic commitment to:

  • Reside in the nominated state or territory.
  • Continue the business and investment activity in Australia after the conclusion of the provisional visa.
  • Live in Australia for at least 40 days per year (calculated cumulatively) for the duration of the provisional visa, or the applicant’s spouse to live for at least 180 days per year (calculated cumulatively) for the duration of the provisional visa.

 

PREMIUM INVESTOR STREAM

The applicant must have net assets of at least $15 million that are legally acquired, unencumbered, and available to be used to make the complying investment in Australia in any of the
following options:

  • Australian securities exchange listed assets.
  • Australian government or semi-government bonds or notes.
  • Corporate bonds or notes issued by an Australian exchange listed entity (or wholly owned subsidiary of the Australian listed entity) or investment grade rated Australian corporate bonds or notes rated by an AFS licenced debt rating agency.
  • Australian proprietary limited companies.
  • Real property in Australia excluding residential property.
  • Deferred annuities issued by Australian registered life companies.
  • State or territory government approved philanthropic contribution.

 

The applicant must also have a genuine and realistic commitment to continue the business and investment activity in Australia after the conclusion of the provisional visa.

 

6. VISA OBLIGATIONS

The provisional visa is valid for four years and three months from the date it is granted (with extensions available subject to certain conditions). During this period, there are additional rights and obligations the visa holder must follow.

 

BUSINESS INNOVATION STREAM

The visa holder needs to provide valuable input into the Australian economy. The visa holder must:

  • Obtain and maintain substantial ownership interest in a business in Australia.
  • Participate, at a senior level, in the day-to-day management and decision-making of that business.

 

INVESTOR STREAM

The visa holder must maintain the designated investment for at least four years.

 

SIGNIFICANT INVESTOR STREAM

The visa holder must hold complying investments continuously for the life of the provisional visa. The visa holder can switch between complying investments or between complying significant investments provided that:

  • Funds withdrawn from an investment are reinvested into other applicable complying investments within 30 days.
  • The sum withdrawn corresponds with the sum reinvested (irrespective of any gains and losses due to market exposures).

 

7. PERMANENT VISA UNDER SUBCLASS 888

The visa holder might be eligible to be granted a Business Innovation and Investment (Permanent) visa (subclass 888) if the applicant has been in Australia:

  • For a total of at least one year in the two years immediately before lodging the application under the Business Innovation stream
  • For a total of at least two years in the four years immediately before lodging the application under the Investor stream.
  • For a minimum of 40 days per year or for the applicant’s partner, a minimum of 180 days per year during the continuous four years under the Significant Investor stream.
  • For a minimum of one year under the Premium Investor stream.

 

The visa holder must also have met all the obligations of the provisional visa (subclass 188) and all the requirements for the grant of the permanent visa (subclass 888).

 

Comasters is able to prepare a comprehensive application under both the subclass 188 and subclass 888 visa on behalf of clients.

 

For a table of the Points Test under the Business Innovation Stream and Investor Stream, please view the PDF version of this article.

© Comasters July 2016.

 

Important: This is not advice. Clients should not act solely on the basis of the material contained in this paper. Our formal advice should be sought before acting on any aspect of the above information.