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Back to Investor Visas

As a result of reforms to the relevant immigration program in 2012, there are now two main visas available to investors wishing to live in Australia. Such people must first obtain a state- or territory-sponsored provisional four-year visa and meet the conditions of that visa before applying for the permanent visa. Both the provisional and the permanent visas include two streams under which investors may qualify: an Investor stream and a Significant Investor stream. These differ in the minimum investment required (AUD1.5 million vs. AUD5 million) and types of investments that can be made, among other things. The Significant Investor stream provides such concessions as removing the fifty-five-year age limit, not requiring the passing of the innovation points test that applies to the Investor stream, and providing for a much lower residency requirement in order to qualify for the permanent visa.

A temporary, four-year visa is also available to state- or territory-sponsored investors over the age of fifty-five who wish to reside in Australia during their retirement years. The minimum investment required to qualify for this visa is AUD$750,000.

I.  Introduction

Significant changes to Australia’s business and investment visas came into effect in July 2012 following a comprehensive review of the Business Skills Program in 2011.[1]  As a result of the reforms, some visas were removed and others were consolidated into the three new visas that make up what is now called the Business Innovation and Investment Program.[2] This report provides information on two of these visas: the Business Innovation and Investment (Provisional) (subclass 188) visa and the Business Innovation and Investment (Permanent) (subclass 888) visa. 

Part II of this report discusses the eligibility criteria and conditions that apply to the provisional subclass 188 visa.  This visa provides investors with a pathway to the subclass 888 visa, which is a permanent residence visa.  The subclass 888 visa is discussed in Part III of this report.

The Investor Retirement (subclass 405) visa is an additional investor visa that is available only to people aged fifty-five years or older.  This is a temporary visa, allowing a holder to live in Australia for up to four years, and does not provide a pathway to permanent residence.  Information on this visa is provided in Part IV.

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II.  Subclass 188 (Provisional) Visa

The subclass 188 visa[3] is one of several state-nominated visa categories that are targeted at skilled workers, investors, and business owners.  Applications for this visa may be made either from inside or outside Australia.[4] Family members can be included in a person’s visa application.  Primary visa applicants and any family members must satisfy standard health and character requirements.[5]

A subclass 188 visa applicant must first submit an “Expression of Interest” through the Department of Immigration and Citizenship’s (DIAC) SkillSelect website and receive an invitation to apply for the visa before filing an application.[6]  In order to be invited, a person must be nominated by a state or territory government and meet other mandatory criteria.[7]  State and territory governments may have their own criteria for determining which applicants to nominate.[8]  According to the DIAC, the SkillSelect migration selection process “aligns the best available prospective migration candidates with the fluctuating demands of the labour market, or the needs of individual states or territories.”[9] 

Subclass 188 visa applicants must make a declaration that they understand their obligations as a holder of a Business Innovation and Investment visa.[10]

The subclass 188 visa is divided into three streams: Business Innovation, Investor, and Significant Investor.  The eligibility criteria and conditions applicable to the Investor and Significant Investor streams are discussed below.

A.  Investor Stream

Provisional visas issued under the subclass 188 Investor stream are valid for four years and cannot be renewed.[11]  Successful applicants are expected to make the required investment and reside in the nominating state or territory during the period of their visa.[12] 

1.  Investment Requirements

In terms of minimum investment requirements, applicants in the Investor stream must

be prepared to make [their] government-approved designated investment[13] of AUD1.5 million [about USD1.42 million] using funds [they] accumulated from [their] direct involvement, for at least one of the five fiscal years before [they are] invited to apply, in one of the following activities:

  • managing [their] eligible investments[14] that total at least AUD1.5 million
  • managing a qualifying business in which [they] owned at least 10 per cent of the total value of the business.[15]

If a visa is granted, the holder’s designated investment must be maintained for at least four years.[16] 

Applicants must also

  • have a high level of management skill in relation to eligible investments;
  • have at least three years’ experience of direct involvement in managing one or more qualifying businesses or eligible investments;
  • have a genuine and realistic commitment to continuing [their] business and investment activity in Australia after the original investment has matured; and

. . .

  • have an overall successful record of eligible investment or qualifying business activity with no involvement in unacceptable activities.[17]

2.  Innovation Points Test

In addition to meeting the investment requirements, those seeking a visa through the Investor stream must pass an “innovation points test.”  The pass mark for this test is sixty-five points.  Under the test, points are awarded for

  • age
  • English language ability
  • qualifications
  • experience in business or investment
  • net personal and business assets
  • business turnover
  • innovation.[18]

Some aspects of the test reflect the additional minimum threshold requirements for subclass 188 visa eligibility.

a. Age

Subclass 188 visas are available only to people aged under fifty-five years, unless this requirement is waived by a state or territory government owing to the proposed business or investment activity being “of exceptional economic benefit to the relevant region.”[19]  The highest possible number of points (thirty) is awarded to persons aged between twenty-five and thirty-two years (inclusive).

b. English Language Ability

There are no minimum English language threshold requirements for subclass 188 visa applicants and their family members.  However, “[a]ll applicants and any dependants over the age of 18 years old who are unable to demonstrate functional English must pay a second instalment of the visa application charge.”[20]  On the other hand, “[a]pplicants who can demonstrate vocational English or proficient English will be eligible to be awarded points under the innovation points test.”[21]  Ten points are awarded to proficient English speakers under the points test.

c. Experience in Investment

In order to be awarded points for investment experience, applicants “must have held eligible investments with a value of more than AUD100 000 for more than 4 years or more than 7 years,” immediately before being invited to apply.[22]

d. Net Personal and Business Assets

Applicants must have net business and personal assets of at least AUD2.25 million (about USD2.14 million).  Thirty-five points are awarded under the points test for meeting this minimum threshold, and more may be awarded for higher levels of assets.[23]  To qualify for a visa, the assets must have been held for the two fiscal years prior to the receipt of an invitation to apply, and “must have been legally acquired and able to be legally transferred to Australia within two years of the visa being granted.”[24]

B.  Significant Investor Stream

The Significant Investor stream is a more recent (November 2012) addition to the Business Innovation and Investment Program.[25]  This stream offers visa requirement concessions that are not available under the subclass 188 Investor stream, including

  • no points test requirement,
  • no age limit, and
  • reduced residence requirements in order to be eligible for a permanent residence visa.[26]

People in the Significant Investor stream are also able to extend the term of their four-year provisional visa by two years if certain conditions are met, with a maximum of two extensions.[27]

In order to qualify for a visa under this stream, applicants must invest at least AUD5 million (about USD4.75 million) in at least one “complying investment.”[28]  “Complying investments” include

  • Commonwealth, state or territory government bonds;
  • Australian Securities and Investment Commission (ASIC) regulated managed funds with a mandate for investing in Australia; and
  • direct investment into Australian proprietary companies not listed on an Australian Stock Exchange.[29]

Income earned from such investments is subject to tax under Australian taxation law.[30]

Applicants for the Significant Investor stream must also

  • have a genuine and realistic commitment to continue [their] business and investment activity in Australia after the complying investment has been held continuously for the life of [their] provisional visa;
  • have a genuine and realistic commitment to reside in the state or territory that provided nomination for [their] application;
  • have assets of at least AUD5 million that have been legally acquired, are unencumbered, and are available to be used to make the ‘complying investment’ in Australia;
  • not have a history of involvement in unacceptable business or investment activities; and
  • agree not to take legal action against the Commonwealth for any loss of capital arising from [their] complying investment.[31]

According to the Minister of Immigration and Citizenship, “[s]tate and territory governments are partnering with the Commonwealth when selecting prospective high net worth migrants, to ensure the available visas [in this stream] are offered to the most experienced business people and high profile investors.”[32]

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III.  Subclass 888 (Permanent) Visa

A person who has fulfilled the requirements of the provisional subclass 188 visa can apply for permanent residence status by way of the subclass 888 visa.[33]  This visa is divided into the same three streams as the subclass 188 visa.  Applicants must be the primary holder of a subclass 188 visa and must

  • secure and maintain nomination from a state or territory government; and
  • for the Investor stream – have held a designated investment continuously for at least 4 years; or
  • for the Significant Investor stream – have held a complying investment continuously for at least 4 years.[34]

Applicants for the permanent visa must also show that they

  • have not been involved in any unacceptable business or investment activities;
  • have a satisfactory record of complying with Australian laws, including those relating to taxation, superannuation, workplace relations and other laws relevant to [their] business and investment activity.[35]

Applicants must also demonstrate “a strong commitment” to continuing their business or investment activity in Australia.[36]

Minimum Australian residency requirements also apply.  As noted above, these requirements are lower for the Significant Investor stream compared to the Investor stream.  Investor stream applicants must have resided in Australia for at least two years in the four years immediately prior to applying for a subclass 888 visa, while Significant Investor stream applicants need only to have been in the country “for a cumulative period of 40 days for each year or part year while holding the provisional visa.”[37]  The Minister for Immigration and Citizenship has stated that “[t]his flexibility recognises the needs of the global investor community while also encouraging investment into Australia.”[38]

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IV.  Investor Retirement Visa

The Investor Retirement (subclass 405) visa[39] is a state or territory-sponsored temporary visa, valid for four years, that is available to retirees aged fifty-five years or older, and their partners of any age, “who have no dependants and who want to reside in Australia during their retirement years.”[40]  Applicants must be self-supported and “able to make a significant long term financial investment in Australia.”[41]  A points test is not required for this visa.

The minimum level of assets required to be eligible for the subclass 405 visa is AUD750,000 (about USD712,000).  Such assets must have been held for at least two years prior to the lodging of an application, be “legally owned and lawfully acquired” by the applicant (or the applicant and his or her partner), and be “capable of and available for, transfer to Australia.”[42]  In addition, an applicant (or the applicant and his or her partner) must have access to minimum net income of AUD65,000 (about USD62,000).  Subclass 405 visa holders are able to work for up to forty hours in each two week period if they wish.

An applicant must be able to make a designated investment of at least AUD750,000 in the sponsoring state or territory.  Such funds are additional to the assets requirement.[43]

The eligibility criteria for this visa also include a requirement for adequate health insurance to be held and maintained for the period of the visa.

Holders of subclass 405 visas may apply for a further subclass 405 visa if various conditions have been maintained for the period of the visa, including the designated investment.[44]  Although a holder cannot apply for permanent residence, he or she can keep applying for subsequent Investor Retirement visas as long as the requirements continue to be met.[45]

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Prepared by Kelly Buchanan
Chief, Foreign, Comparative and
International Law Division I
June 2013
 


[1] Department of Immigration and Citizenship (DIAC), Reforms to the Business Skills Program (June 2012), http://www.immi.gov.au/skilled/business/_pdf/reforms-business-skills-program.pdf.

[2] See generally DIAC, Frequently Asked Questions: Reforms to the Business Skills Program July 2012 (June 2012), http://www.immi.gov.au/skilled/business/_pdf/faq-reforms-business-skills-program.pdf; DIAC, Reforms to the Business Skills Program from 1 July 2012, http://www.immi.gov.au/skilled/business /_pdf/diagram-changes-business.pdf

[3] The criteria and conditions related to this visa subclass are set out in the Migration Regulations 1994 (Cth) sch 2 pt 188, http://www.comlaw.gov.au/Details/F2013C00062/Html/Volume_3#_Toc347391734.   Additional visa criteria and conditions referred to for each individual subclass relate to those in schedule 4 of the Regulations (Public interest criteria), schedule 5 (Special return criteria), as well as schedule 8 (Visa conditions).

[4] Frequently Asked Questions: Reforms to the Business Skills Program July 2012, supra note 2, at 7.

[5] Business Innovation and Investment (Provisional) (Subclass 188) Visa, DIAC SkillSelect, http://www.immi.gov.au/skills/skillselect/index/visas/subclass-188/ (select “Visa applicants” then “Who can apply”) (last visited June 7, 2013).  More details on these requirements are provided in DIAC, Business Innovation and Investment 33–35 (Booklet 10, April 2013) (DIAC Booklet 10), http://www.immi.gov.au/allforms/booklets /1407.pdf

[6] Frequently Asked Questions: Reforms to the Business Skills Program July 2012, supra note 2, at 2.

[7] Id.at 6.

[8] Id.at 5.

[9] Reforms to the Business Skills Program, supra note 1, at 4. 

[10] DIAC Booklet 10, supra note 5, at 17–18.

[11] Business Innovation and Investment (Provisional) (Subclass 188) Visa, supra note 5 (select “Visa holders”).

[12] Frequently Asked Questions: Reforms to the Business Skills Program July 2012, supra note 2, at 6.

[13] A designated investment is an “investment in a security issued by an Australian state or territory government authority which is specified by the Minister in Gazette Notice for the purposes of the investor stream of the Business Innovation and Investment visa.  DIAC Booklet 10, supra note 5, at 4.  More details on designated investments are provided on page 19 of the Booklet.

[14] “Eligible investment” means an ownership interest in a business; a loan to a business; cash on deposit; real estate; or gold or silver bullion “that is owned by the person for the purposes of producing a return by way of income or capital gain and is not held for personal use.”  Id. at 4.

[15] Business Innovation and Investment (Provisional) (Subclass 188) Visa, supra note 5 (select “Visa applicants” then “Who can apply”).

[16] Id.(select “Visa holders”).

[17] Id.

[18] Id.(select “Points test”).  See also DIAC Booklet 10, supra note 5, at 21–24; DIAC, Innovation Points Test for the Business Innovation and Investment Program (Aug. 2012), http://www.immi.gov.au/skilled /business/_pdf /innovation-points-test.pdf.  The full points test is set out in the Migration Regulations 1994 (Cth) sch 7A, http://www.comlaw.gov.au/Details/F2013C00062/Html/Volume_6#_Toc347394764.

[19] Business Innovation and Investment (Provisional) (Subclass 188) Visa, supra note 5 (select “Visa applicants” then “Who can apply”).

[20] Frequently Asked Questions: Reforms to the Business Skills Program July 2012, supra note 2, at 2.

[21] Id.at 3.

[22] Business Innovation and Investment (Provisional) (Subclass 188) Visa, supra note 5 (click “Points test” then “Experience in business or investment”).  More details on the investment experience requirements are provided in DIAC Booklet 10, supra note 5, at 32.

[23] Business Innovation and Investment (Provisional) (Subclass 188) Visa, supra note 5 (click “Points test” then “Net personal and business assets”).

[24] Id.(select “Visa applicants” then “Who can apply”).

[25] See DIAC, Significant Investor Visa (Nov. 2012), http://www.immi.gov.au/skilled/business/_pdf /significant-investor.pdf; Press Release, Brendan O’Connor MP, Significant Investor Visa Opens to Business Migrants (Nov. 23, 2012), http://www.minister.immi.gov.au/media/cb/2012/cb191999.htm.

[26] See Press Release, Brendan O’Connor MP, Key Conditions Released for Significant Investor Visa (Aug. 29, 2012), http://www.minister.immi.gov.au/media/cb/2012/cb189539.htm.

[27] DIAC Booklet 10, supra note 5, at 18.

[28] Business Innovation and Investment (Provisional) (Subclass 188) Visa, supra note 5 (select “Visa applicants”).

[29] DIAC Booklet 10, supra note 5, at 20.

[30] Id.

[31] Business Innovation and Investment (Provisional) (Subclass 188) Visa, supra note 5 (select “Visa applicants”).

[32] Press Release, Brendan O’Connor MP, Key Conditions Released for Significant Investor Visa, supra note 26.

[33] The criteria and conditions related to this visa subclass are set out in the Migration Regulations 1994 (Cth) sch 2 pt 888, http://www.comlaw.gov.au/Details/F2013C00062/Html/Volume_5#_Toc346282851.

[34] DIAC Booklet 10, supra note 5, at 11.

[35] Id. at 26.

[36] Business Innovation and Investment (Permanent) Visa (Subclass 888), DIAC SkillSelect, http://www .immi.gov.au/skills/skillselect/index/visas/subclass-888/ (click on “Visa applicants”).

[37] DIAC Booklet 10, supra note 5, at 25 & 27.  If a person has extended his or her visa as part of the Significant Investor stream, eighty days are added for each two-year extension. See Business Innovation and Investment (Permanent) Visa (Subclass 888), supra note 36 (click on “Visa applicants”).

[38] Press Release, Brendan O’Connor MP, Key Conditions Released for Significant Investor Visa, supra note 26.

[39] The criteria and conditions related to this visa subclass are set out in the Migration Regulations 1994 (Cth) sch 2 pt 405, http://www.comlaw.gov.au/Details/F2013C00062/Html/Volume_3#_Toc347391749.

[40] Investor Retirement (Subclass 405): About this Visa, DIAC, http://www.immi.gov.au/visitors/retirement /405/ (last visited June 7, 2013).

[41] Id.The amounts referred to in this part are reduced if the applicant intends to live in regional Australia.

[42] Investor Retirement (Subclass 405): Eligibility, DIAC, http://www.immi.gov.au/visitors/retirement/405 /eligibility.htm (last visited June 7, 2013).

[43] Id.

[44] Id.

[45] Investor Retirement (Subclass 405): How this Visa Works,DIAC, http://www.immi.gov.au/visitors /retirement/405/how-the-visa-works.htm (last visited June 7, 2013).