Publications / International

10 Sep 12
Investment into Australia - Significant Investor visa to commence from November 2012

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The Significant Investor visa will create a new source of investment capital and increase the pool of funds managed locally. It is expected to promote growth in areas such as real estate property, infrastructure projects, financial planning, fund administration, stockbroking, accounting and funds management.

It is anticipated that the new stream of visa will attract considerable interest from across Asia, and in particular from China. The China Private Wealth Report 2011 cites that the private wealth market of China is ever increasing and that approximately 47% of ultra-high net worth individuals who have investable assets of at least $15 million, are considering an application for investment immigration.

After its announcement introducing the Significant Investor visa on 25 May 2012, the Federal Government has recently announced the key conditions for the Significant Investor visa which will commence from 24 November 2012. Visa applicants who make an investment of AUD$5 million in a complying investment will receive the benefit of:

  • no points test
  • no upper age limit, and
  • reduced residency requirement of 160 days over four years.

Applicants for the visa need to make investments of at least AUD$5 million in complying investments. Complying investments include:

  • direct investment into private Australian companies not listed on the Australian stock exchange
  • ASIC regulated managed funds with a mandate for investing in Australia, and
  • State or Territory government bonds.

Investors may hold investments in each of the investment options and may also change between complying investments, provided reinvestment requirements are met.

Pathway to permanent residency

A Significant Investor visa will not immediately provide a visa applicant with permanent resident status. Significant Investor visa holders will initially hold a Business Innovation and Investment – Significant Investor Stream provisional visa. During this time, a visa holder will have the right to unlimited entry into Australia.

Details of the pathway to permanent residency have not yet been announced. It is likely that the majority of visa holders will become eligible for permanent residence under the Significant Investor Stream once they have held the required complying investments in Australia for at least four years and continue to meet relevant criteria.

Private Australian companies

For direct investment into non-listed Australian companies to be classed as a ‘complying investment’, the following criteria must be met: 

  • the company must genuinely operate a qualifying business in Australia
  • the applicant must obtain an ownership interest in the company
  • the company must be registered with ASIC, and
  • the company must have an Australian Business Number (ABN).

A qualifying business is one that is being run for profit through the provision of goods and services, and not just passive/speculative investment.

Managed funds

Complying funds must be regulated by ASIC.

The ‘mandate’ for investments by the managed fund must be in Australian assets only and limited to the following:

  • infrastructure projects in Australia
  • cash held by Australian deposit taking institutions
  • bonds issued by a State or Territory government
  • bonds or equity in Australian companies listed on the Australian stock exchange
  • bonds or term deposits issued by Australian financial institutions
  • real estate property in Australia, and
  • other ASIC regulated managed funds that invest in the above list of assets.

The fund must be open to the general public and the fund manager must provide a compliance declaration confirming adherence to the Department of Immigration and Citizenship’s investment requirements.

State or Territory nomination

Applicants for the visa must also be nominated by a State or Territory government. It is expected that each of the States and Territories will participate in the Significant Investor program and each will have their own criteria for nomination.

For example, in NSW it is expected that applicants would need to invest at least 30 per cent of the required AUD$5 million investment, or AUD$1.5 million, in NSW Waratah Bonds, in order to be nominated by the NSW Government.

At this time, there are no finalised criteria for nomination by the State and Territory governments.

McCullough Robertson are abreast of the latest developments that may affect your decision to seek new investors or to make a migration investment in Australia and we have both the knowledge and expertise to advise you as to what investments will qualify under the visa as well as assist with any potential migration queries associated with this new visa stream.


Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

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