The Significant Investor Visa Framework (188 Visa)

[Lisa De Leon]

Introduction
The SIV Investment Framework was updated on 1 July 2015, with the purpose of helping to
stimulate the Australian economy through investment into the three stages of business –
start-up, expansion and maturity. It is aimed at investing capital into innovative Australian
businesses and the commercialisation of Australian ideas, research and development.
 

Current Requirements (from 1 July 2015)
SIV applicants are required to invest at least $5 million over four years in complying
investments, which must include:
• Venture Capital and Growth Private Equity Funds – 10 percent (AUD 500,000)
• Eligible managed fund(s) or listed investment companies (LICs) that invest in
Emerging Companies – 30 percent (AUD 1.5 Million)
• Balancing Investment – AUD 3 Million
 

Note that investments in VCPE and Emerging Companies may be for higher amounts than
the mandated minimums and up to the full amount of the balancing investment quota.
 

Venture Capital and Growth Private Equity (VCPE)
In order to be eligible to take SIV investment, a VCPE fund must be registered under the
Early Stage Venture Capital Limited Partnership (ESVCLP) or Venture Capital Limited
Partnership (VCLP) programs, operated by the Department of Industry and Science. The
mandatory investment of at least AUD 500,000 in an AusIndustry registered fund(s) can be
in either ESVCLP or VCLP. VCPE is a form of investment that provides capital to typically
new, innovative, start-ups or fast-growing, unlisted, small private companies. This amount is
expected to be increased as the market responds.

Emerging Companies
The mandatory investment of at least AUD 1.5 million is to be made in approved managed
funds investing in emerging companies listed on the Australian Stock Exchange (unlisted
companies are to be no more than 20% of the fund’s net assets). Up to 10% of the fund’s
net assets may be invested in foreign exchange listed companies (eg. New Zealand). Cash is
to be no more than 20% of a fund’s net assets.
Fund Managers are to have and maintain a minimum AUD 100 Million in firmwide funds
under management (FUM) to be eligible to offer a complying fund(s) to applicants.

Balancing Investment
A ‘balancing investment’ of up to AUD 3 Million is to be made in managed funds that may
invest in a range of assets, including Australian Stock Exchange listed companies, Australian
corporate bonds or notes, annuities and commercial real estate (subject to the 10 per cent
limit on residential real estate).
A corporate bond allows a company to raise money from investors to finance business
activities. In return for your money, the company issuing the bonds promises to pay you
interest at regular intervals and return the money invested on the set maturity date.
Corporate bonds generally offer higher returns than cash, government bonds or bank term
deposits, but less returns than shares.

Making an SIV Complying Investment
All SIV investments, by law, must be provided by an Australian Financial Services (AFS)
licensed manager domiciled in Australia. Fund managers must be independent of the
applicant, the applicant’s spouse or de facto partner, and any associate of the applicant.
Before applying for a Significant Investor Visa, applicants need to be nominated by a state or
territory government or Austrade.

Risk Management
Complying investments may carry risk and it is the applicant’s responsibility to evaluate and
determine the merit, viability and risk of the proposed investment or business and to verify
the reliability, accuracy and completeness of the information gathered.
It is highly recommended that you seek migration, legal and financial advice regarding your
proposed investment to ensure compliance with all eligibility requirements. Australian Visa
Options works closely with Ord Minnett to provide end to end solutions in the financial and
legal management of your SIV application. This ensures compliance with the relevant
legislation, and minimises the risks to the success of your visa application.
 

More Information
You can find more information about the topics mentioned above at the following websites:
AusIndustry Program Summary
Department of Industry, Innovation and Science
www.business.gov.au
188 Business and Investment (Provisional) Visa
Department of Home Affairs
www.homeaffairs.gov.au
Significant and Premium Investor Programs
Austrade (Australian Trade and Investment Commission)
www.austrade.gov.au
Corporate Bonds
Australian Securities and Investments Commission (ASIC)
www.moneysmart.gov.au
Corporate Bonds
Australian Stock Exchange
www.asx.com.au
 

 

Edited January 17, 2018 by NickyNook
Removed self-promoting details.