Australia losing the battle for investments due to new immigration rules
Reforms aren’t always a good thing. The number of non-residents wishing to obtain a visa has reduced tenfold, due to the changes introduced to Australia’s popular business immigration programme.
Attracting wealthy investors interested in developing their businesses has always been a priority for the Australian Government; the Business Innovation and Investment Provisional (BIIP) immigration programme was developed by the Australian Trade Commission specifically for this purpose. It was assumed that it would help increase the country’s attractiveness in the eyes of business leaders, which in turn would trigger an increase in the number of applications for investment visas.
Commercial risks and business immigration
However, with the Ministry of Commerce’s forced amendments in July 2015, the situation changed dramatically. Instead of the expected 2100 applications, the Department of Immigration and Border Protection (DIBP) has received only 98 applications since the changes (with only 10 being approved). In comparison, 1544 applications were received in 2014, and 590 investment visas issued.
What is the reason for this decline? According to Andrew Martin, a manager of the Australian investment bank Moelis & Co, investors are afraid of the increasing risks. Previously, to participate in the immigration programme, it was possible to invest the money in real estate or government bonds. Now, the government requires that potential residents finance small businesses.
Four visa categories
Currently, immigration to Australia under the BIIP programme is possible after obtaining a visa related to one of four categories:
- Business Innovation stream: it is intended for entrepreneurs who are co-founders or owners of companies with an annual turnover of at least $500,000 AUD;
- Investor stream: for candidates who are able to invest $1,500,000 AUD in the Australian economy;
- Significant Investor stream: the mandatory investment size is increased to $5,000,000 AUD, $2,000,000 must be spent on the development of small businesses;
- Premium Investor stream: for non-residents who intend to invest more than $15m AUD in Australian government bonds, private companies, and commercial real estate.
The visa is valid for 4 years, and the investor may be able to include their dependent children, official/actual partners and others financially dependent on his family in the application. The state or territory concerned must issue an invitation, in cooperation with the candidate, to obtain a permit.