Austrade: Significant and Premium Investor Visa Programmes

Transcription

1 Austrade: Significant and Premium Investr Visa Prgrammes Michaela Brwning General Manager, Established Markets Special Adviser t the CEO, Strategy and China Plicy August 2015

2 Disclaimer: This is fr infrmatin nly and is nt advice. Any persn relying n this infrmatin des s entirely at their wn risk and Austrade urges any user t seek prfessinal advice befre making any decisin. Austrade denies liability fr any lss arising frm reliance n infrmatin btained frm this presentatin. 2

3 What are the Significant and Premium Investr Visas? The Significant Investr Visa (SIV): requires a minimum investment f A$5 millin int cmplying investments an applicatin fr permanent residency may be made after hlding the investment and prvisinal visa fr fur years primary visa hlder must be resident in Australia fr 40 days every year ver the fur years The Premium Investr Visa (PIV) is a new visa stream which: requires a minimum investment f A$15 millin int cmplying investments an applicatin fr permanent residency may be made after hlding the investment and prvisinal visa fr 12 mnths primary visa hlder has n residency requirement 3

4 Austrade s rle develping the SIV/PIV Cmplying Investment Framewrk (CIF) Extensive cnsultatin with interested stakehlders, including: public cnsideratin f cmplying investment design ptins; and, tw runds f public written submissins apprximately 170 submissins received Austrade cnsidered advice frm hundreds f stakehlders and experts t determine scpe and quantums n Venture Capital and Grwth Private Equity Funds (VCPE) and funds investing in Emerging Cmpanies Austrade has an nging rle in assessing CIF design t ensure the prgramme achieves its bjectives ver time 4

5 Why change the SIV prgramme (cnt)? Minister Rbb s media release: the previus SIV framewrk had set the bar t lw, with investment largely directed int passive investments such as gvernment bnds and residential real estate schemes areas that already attract large capital flws. Direct investment in residential real estate has never been a cmplying investment fr SIV and this will nt change. Indirect investment in residential real estate thrugh managed funds will nw be restricted. Imprtantly, a SIV hlder can still independently invest in residential real estate s lng as it cmplies with freign investment rules, but this wuld nt cunt as a cmplying investment t qualify fr a visa. 5

6 Why change the SIV prgramme? Attract investrs with business and entrepreneurial skills and the necessary capital t enhance investment int innvative Australian businesses Prmte investment, innvatin and cmmercialisatin f Australian ideas, research and develpment which are imprtant t ur ecnmic future Prvide a pathway t permanent residency in Australia, while ensuring a balance between investment migratin and ecnmic benefit t the Australian ecnmy Minister Rbb: The Gvernment aims t help ensure Australia s best and brightest find funds at hme t build the next great startup. (The Australian, 27/10/14) 6

7 Key pints Significant Investr Visa (SIV) Frm 1 July 2015, SIV applicants will be required t invest at least $5 millin in cmplying investments, which must nw include: At least $500,000 in eligible Australian venture capital r grwth private equity fund(s) investing in start-up and small private cmpanies; At least $1.5 millin in eligible managed fund(s) r Listed Investment Cmpanies (LICs) investing in Emerging Cmpanies; and, A balancing investment f up t $3 millin in managed fund(s) r LICs that invest in a cmbinatin f eligible assets. Fund managers are required under Australian law t cmply with Knw Yur Client (KYC) laws, and Anti-Mney Laundering (AML) and Cunter Terrrism Financing (CTF) reprting. 7

8 Key pints Premium Investr Visa (PIV) The PIV will be a new visa stream fcussing n attracting a small number f highly talented and entrepreneurial individuals t Australia wh can translate thse skills and talents int ther areas which deliver a lng-term ecnmic benefit Requires: a minimum f $15 millin t invest an applicatin fr permanent residency may be made after hlding the investment and prvisinal visa fr 12 mnths primary visa hlder has n residency requirement Available by invitatin f the Australian Gvernment nly Will be rlled ut ver the cming year 8

9 SIV & PIV Cmplying Investment Framewrk (CIF) t cmmence 1 July Elements that apply t all investments fr SIV & PIV SIV and PIV will be distinct visa prducts with the CI framewrk articulated separately. Existing requirements fr wh may make the investment will remain the same as will the requirement that funds be unencumbered and lawfully acquired. Investrs will als still be required t reinvest funds within 30 days f withdrawing them frm a cmplying investment r cancelling the investment in rder fr the investment t cntinue t be cmplying. Direct investment int residential real estate is excluded and indirect expsure thrugh investment vehicles is t be restricted t less than 10% f a vehicle s net assets. Exclude lan back arrangements where the investment is used as cllateral by applicants. 2. Significant Investr Visa (SIV) Investments must be prvided by an Australian Financial Services (AFS) licensed manager(s) dmiciled in Australia. Fund managers must be independent f the applicant and their spuse. Investments are permitted thrugh a Fund f Fund (FF) r an Investr Directed Prtfli Service (IDPS) int cmplying managed fund(s) nly. Applicant mnies may be held in cash fr up t 30 days in a FF r IDPS at the time f first investment by the applicant and during any switching perid. Cmplying Investments cmprise mandatry investments in 2a and 2b, and balancing investments in 2c. Investments in 2a and 2b may be fr higher amunts than the mandated minimums and up t the full amunt f 2c (the balancing investment quanta) if desired. 3. Premium Investr Visa (PIV) Nte: Austrade nminatin an invitatin-nly mdel, with State and Territry (S&T) gvernments able t make referrals t Austrade. Austrade t assess and nminate n apprved criteria based n entrepreneurial skill r talent and nging benefit t Australia and character/integrity check. Scpe f eligible investments is an Australian managed fund(s) r direct investment in: Australian securities exchange listed assets. Australian gvernment r semi-gvernment bnds r ntes. Crprate bnds r ntes issued by an Australian exchange listed entity (r whlly wned subsidiary f the Australian listed entity) r investment grade rated Australian crprate bnds r ntes rated by an AFS licenced debt rating agency. Australian prprietary limited cmpanies. Real prperty in Australia excluding residential prperty. Deferred annuities issued by Australian registered life cmpanies. S&T gvernment apprved philanthrpic dnatin. T be an eligible fund, in additin t the requirements set ut in bx 1, a further requirement is that cash is t be n mre than 20% f a fund s net assets and derivatives are t be used fr risk management purpses nly. PIV investrs may elect t make a prtin r the entirety f their investment by way f a philanthrpic dnatin (endrsed by a S&T gvernment). 2a. SIV: Venture Capital and Grwth Private Equity Funds (VCPE) Nte: Investments int VCPE funds may be fr investment terms that are greater than the prvisinal visa perid. Cmpliance will cnsist f a three part test: prf that applicant mnies are taken upfrnt in a specified vehicle; prf that the applicant has entered int a cmmitment with a VCPE fund(s) within 12 mnths frm the grant f the prvisinal visa; and prf that investments in a VCPE fund(s) have cmmenced within fur years frm the grant f the prvisinal visa. Mandatry investment f at least $500,000 at time f investment in an AusIndustry registered fund(s) (either ESVCLP r VCLP)*. Applicant mnies fr the full amunt f the cmmitment are t be taken upfrnt t satisfy issuing a prvisinal visa and depsited either in a Cash Management Trust (CMT) held in escrw, r an Australian bank accunt as security fr a bank guarantee in favur f a VCPE, t meet capital calls by the VCPE ver the investment hrizn. Applicants will need t enter int a cmmitment with a VCPE within 12 mnths frm the date they were issued a prvisinal visa. Prceeds frm the realisatin f investments by the VCPE fund(s) befre the prvisinal visa ends are t be reinvested in cmplying funds frm 2a, 2b r 2c. Balancing Investment VCPE Emerging Cmpanies * The mandated quanta fr future applicatins is expected t be increased within tw years as the market respnds. ** Includes Australian friendly sciety insurance bnds as currently included in the definitin f a managed fund in the Migratin Act. *** Cash held by Australian authrised depsit taking institutins (including certificates f depsit, bank bills and ther cash-like instruments). ## Managers with less than $100m firm-wide FUM may ffer prducts thrugh a respnsible entity (RE) that meets this criteria. Nte that managers f VCPE funds are nt required t meet the $100m firmwide FUM criteria. 2b. SIV: Funds investing in Emerging Cmpanies Mandatry investment f at least $1.5 millin at time f investment in an eligible fund(s). A cmplying fund must have the fllwing: Investment in securities f cmpanies that have a market capitalisatin (mkt cap) f less than $500m at the time f first purchase by the fund. Investments are t be ASX listed r Australian unlisted cmpanies, but unlisted are t be n mre than 20% f the fund s net assets. Up t 20% f the fund s net assets may be in ther Australian exchange listed cmpanies. Up t 10% f the fund s net assets may be invested in freign exchanged listed cmpanies (e.g. New Zealand) with a mkt cap f less than $500m at the time f first purchase by the fund. Up t 30% f the fund s net assets can be in previusly held assets wh s cmpanies have grwn their mkt cap abve $500m. Must maintain a minimum f 20 investee cmpanies frm three mnths pst the fund s inceptin date. N further purchase can be made t any individual asset that exceeds 10% f the fund s net assets. Cash*** is t be n mre than 20% f a fund s net assets. Derivatives are t be used fr risk management purpses nly. Managed funds** (pen r clse-end) r Listed Investment Cmpanies (LICs) are eligible. Fund Managers are t have and maintain a minimum $100m in firmwide funds under management (FUM) t ffer a cmplying fund(s) t applicants. ## 2c. SIV: Balancing Investment Funds invested in: Cmpanies, A-REITs, infrastructure trusts including their rdinary equity, preferred equity, cnvertible bnds r crprate issued flating rate ntes listed n an Australian securities exchange. Crprate bnds r ntes issued by an Australian exchange listed entity (r whlly wned subsidiary f the Australian listed entity) r investment grade rated Australian crprate bnds r ntes rated by an AFS licensed debt rating agency. Deferred annuities issued by Australian registered life cmpanies but cannt cmmence paybacks during the prvisinal visa perid. Real Prperty in Australia (subject t 10% limit n residential real estate). A cmplying fund must have the fllwing: Cash*** is t be n mre than 20% f a fund s net assets. Derivatives are t be used fr risk management purpses nly. Managed funds** (pen r clse-end) r Listed Investment Cmpanies (LICs) are eligible. Fund Managers are t have and maintain a minimum $100m in firmwide FUM t ffer a cmplying fund(s) t applicants. ## Disclaimer: This is fr infrmatin nly and is nt advice. Any persn relying n this infrmatin des s entirely at their wn risk and Austrade urges any user t seek prfessinal advice befre making any decisin. Austrade denies liability fr any lss arising frm reliance n infrmatin btained frm this site Prepared by: Austrade Status Date: 15 May 2015

10 Gvernment Agency Rles ging frward Austrade has three primary respnsibilities: 1. Nminate ptential SIV applicants (alng with S&T gvernments); 2. Develp the new PIV and be the sle nminatr; and 3. Assess the cmplying investment framewrk design n an nging basis t ensure the prgramme achieves its bjectives ver time. AusIndustry assesses and registers Venture Capital funds that are eligible fr SIV investments. The Department f Immigratin and Brder Prtectin (DIBP) cntinues t manage the migratin prgramme, including regulatry changes, implementatin, cmpliance and nging administratin. 10

11 Questins?

12 Fr any further questins, please cntact: Investr Visa Unit Investment Divisin