28 June 2016 Significant Investor Visa Update June 2016

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We are seeing the growth in SIV applications certainly pick up (See statistics below).  The message is getting through to potential applicants that the investment risks associated SIV can be mitigated.

 

It is very important to introduce potential applicants to an SIV investment specialist as early as possible.  The benefits of doing so are:

 

  • Helps the potential applicant make an informed decision to proceed with applying for the SIV visa.

 

  • Have a qualified investment adviser who specialises in the SIV explain the investment framework, the investments which can be used and how to mitigate investment risk.

 

  • Ability to tailor make a complying balancing portfolio to fit the client’s investment preferences.

 

Experience has been the earlier we are introduced to a client, the quicker they are to proceed with applying for the visa.

 

Risk Management:

We at Sage Global Australia’s work with an AFS complying investment provider that has the tenacity and skill to not only  provide the complying Investment framework as set out by the Department of Immigration but also  takes multiple steps to mitigate risk as below:

 

Investment Risk Management- This starts by choosing to use Private Equity (PE) over Venture Capital (VC) in the 10% VCPE component.  PE has a much lower risk profile that VC due to investment into late stage businesses rather than early stage.  The PE funds we use have a long proven track record and were not recently set up just to take advantage of the SIV visa.   Under the 30% Emerging Company component, we use a fund with a proven track record of over 14 years and an investment grade rating from Lonsec.  For the balancing 60% component we can tailor make portfolios to a client’s investment preference.  For those clients who want the lowest risk, we generally suggest our Conservative option where the balancing portion of the investment is investment into a Guaranteed Annuity with a fixed rate of return.

Compliance Monitoring- Our SIV complying Investment provider implemented a monthly compliance review check with all the underlying funds to ensure their ongoing compliance within the SIV framework.  This is to ensure client’s visas are not put at risk due to non-compliance.

 

Structuring, Australian and International Tax Advice:

It is important that clients receive advice on how they are structured (whether to invest in primary applicant’s name only, jointly or create a family trust) and receive Australian tax advice.  It is best that this is done as early as possible and before making an investment.

 

There may be taxation and asset protection benefits for some clients to create a family trust.

 

Clients may also take advantage of the tax benefits of Superannuation for any additional investment.

 

We are happy to introduce a specialist tax adviser for these purposes

 

Referral Agreement

If you don’t already have a copy of our referral agreement, please let us know.

 

SIV Statistics

The table below shows statistics from 1 July 2015 to 31 May 2016.

Item Total
Expressions of Interest (EOI) submitted through SkillSelect 283
Invitations to apply for a SIV issued as a result of applicants being nominated by a state or territory government 228
Primary applications lodged 179
Primary visas granted (subject to regulations post 1 July 2015) 20
Primary visas granted (subject to regulations prior to 1 July 2015) 495

As of 31 May 2016:

  • 1397 SIV visas have been granted from the commencement of the programme on 24 November 2012.
  • AUD 6.985 billion has been invested in Complying Investments.

The table below shows government sponsor distribution of the SIV.

Significant Investor visa: Government sponsor distribution – 1 July 2015 to 31 May 2016

State Expressions of Interest (EOI) submitted through SkillSelect Invitation Applications lodged Visas granted
(application lodged prior to 1 July 2015)
Visas granted
(application lodged on or after 1 July 2015)
Any                     9 N/A N/A N/A N/A
Austrade 7 <5 <5 0 <5
ACT 0 0 0 <5 0
NSW 86 72 52 147 5
NT 0 0 0 0 0
Qld 7 0 0 26 0
SA <5 <5 <5 7 0
Tas. <5 <5 0 <5 0
Vic. 170 148 122 302 13
WA <5 <5 0 11 0
Total 283 228 179 495 20

The table below shows the distribution of primary visa applications and visa grants for the top five source countries for the SIV from the commencement of the programme 24 November 2012 to 31 May 2016 for the SIV.

Applicants for top
five source countries
Percentage of total
visa applications
Grants for top
five source countries
Percentage of total
visas granted
China 90.2 China 88.2
Hong Kong 3.1 Hong Kong 2.7
Malaysia 1.1 Malaysia 1.6
South Africa 0.8 South Africa 1.3
Vietnam 0.6 Vietnam 0.9

Source: DIBP

 

Please feel free to contact us if you have any questions siv@sageglobal.com.au