The new Premium Investor Visa
The Australian Government has introduced a new stream of Visa called The Premium Investor Visa (PIV). It is targeted at talented entrepreneurs and innovators with a minimum investment of $15 Million. The PIV will be implemented from 1 July 2015.
Applicants can only be nominated by Austrade and can make an application if invited to do so by the Department of Immigration and Border Protection. Austrade has recently released preliminary guidelines as to what can constitute a complying investment for the PIV stream.
The PIV represents an outstanding opportunity for successful entrepreneurs to invest and secure permanent residency in 12 months, without having to live here, regardless of age and English language ability.
What is a PIV complying investment for investing $15 Million?
The Government has announced that the scope of eligible investments must be an Australian managed fund(s) or direct investment in:
- 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 licensed debt rating agency.
- Australian proprietary limited companies.
- Real property in Australia excluding residential property.
- Deferred annuities issued by Australian registered life companies.
- State & Territory government approved philanthropic donation.
The investment may be made into one or more of these categories at any time in the qualifying period of 12 months.
Direct Investment in Commercial Property
Because non-residential property is a qualifying investment category, the purchase of commercial property such as a shopping centre or industrial development over $15M will allow an application for the PIV as a direct investment.
Foreign Investment Review Board (FIRB) approval is usually able to be obtained for any commercial property up to $54M in any event.
Any contract to buy such commercial property should be made subject to securing a PIV if that is required as well as the usual due diligence conditions.
Such investment acquisitions can be made in the name of a company or trust or individual applicant names.
What is not allowed under the PIV?
- Cash is to be no more than 20% of a fund’s net assets and derivatives are to be used for risk management purposes only.
- Direct investment into residential real estate is excluded and indirect exposure through investment vehicles is to be restricted to less than 10% of a vehicle’s net assets. Investors can of course invest in residential real estate, subject to FIRB rules, but this investment will not be assessed for PIV purposes.
- Loan back’ arrangements, where the investment is used as collateral by the applicant, are excluded.
The PIV applicants will be eligible for Permanent Residency after only 12 months of maintaining their investment. At this stage, there are no minimum residency requirements to be complied with under the PIV: the applicant does not have to live in Australia at all for the 12-month period.
This is a new visa, and the process for this is still being developed. We are in touch with Austrade to ensure that we have the most current information and knowledge.
This is a new opportunity specifically for entrepreneurial investors to secure a visa as a bonus to investing in Australia. For Australian developers, it’s also an opportunity to offer another benefit or sales feature to prospective investors or joint venture partners seeking to acquire sites or equity participation.
Legitimate source of investment funds is still required to be proved. Parties should be cautious though to obtain proper advice from lawyers who understand migration law as well as property law to ensure drafting of contracts and any joint venture documents deal with all of the issues, including grant of visa conditions.
The new FIRB regime and scrutiny also encourages the use of professional advisers. The third party penalties for assisting in breaching FIRB laws make it important for agents and brokers to also be aware of the new rules.
More news on the PIV will be rolled out in the next twelve months and readers are invited to contact me for further information.
Michael Sing – Special Counsel P 07 3009 8444 D 07 3009 8472 F 07 3009 8499 firstname.lastname@example.org | www.rostroncarlyle.com