Business Investment Visa and Entrepreneurial Visa Options for Migrants Coming to Australia

Posted on November 24, 2017 by Benson Shi

Business Investment Visa and Entrepreneurial Visa Options for Migrants Coming to Australia

Business Investment Visa and Entrepreneurial Visa Options are available to those interested in coming to Australia to invest in business or entrepreneurial activities. These visas provide temporary or permanent residency to applicants who can demonstrate that they meet the means threshold and commit to particular investments.

Australia’s Business Innovation and Investment Programme (BIIP) continues to be seen, both domestically and internationally, as an avenue of approach for the Australian government to attempt to market Australia’s current robust economy to the rest of the world. The programme is designed ‘to attract high quality investors and entrepreneurs to invest in Australia.’[1]

The BIIP, which Immigration Solutions Lawyers is deeply involved with, encompasses both provisional and permanent visas, is made up of three visa subclasses:

  • The Business Talent (permanent) visa – subclass 132
  • The Business Innovation and Investment (provisional) visa – subclass 188
  • The Business Innovation and Investment (permanent) visa – subclass 888

There are other investor visas in Australia which fall outside the BIIP including the Investor Retirement visa (subclass 405).

As stated by the National President of the Migration Institute of Australia (MIA), Angela Julian-Armitage, “Australia’s program offers investors a large number of business opportunities with state and territory incentives. The goal is to attract the greatest and smartest. Hence, the government is looking at attracting investment, not just in well-established areas of investment, but also ones within the innovative and future industries.”[2]

Business Talent (permanent) visa (subclass 132)

This is a permanent Business Visa that allows Migrants Coming to Australia to establish a new business or develop an existing business in Australia, under two separate streams. This Business Investment Visa is a permanent visa, which will be granted for a period of five (5) years – allowing holders to enter and exit Australia for this five year period.

This Business Talent visa requires the applicant to be to be sponsored by an Australian state or territory government agency. Applicants must first submit an Expression of Interest through SkillSelect in order to be nominated by a state or territory government agency and thus, invited to apply for the Business Talent visa by the Minister of Immigration and Border Protection (in writing). The applicant can be in or outside Australia at the time of making the visa application.

Applicants must demonstrate that they genuinely have a realistic commitment to establish an eligible business or participate in an existing eligible business in Australia.

They must also:

  • Have a realistic commitment to maintain a substantial ownership interest in the business;
  • Maintain substantial ownership, and maintain direct and continuous involvement in its day-to-day management;
  • Influence its overall direction and performance in a way that benefits the Australian community; and
  • Not have a history of involvement in business activities that are of a nature that is not generally acceptable in Australia

There are two separate streams of the Business Talent visa:

  • Significant Business History Stream

The Significant Business History stream is for high-calibre business owners or part-owners who intend to do business in Australia.

In order to apply under this stream, the applicant must have:

  • An overall successful business career with no involvement in unacceptable business activities, alongside a desire to own and maintain a management role in a business in Australia;
  • Net business and personal assets of at least A$1.5 million (which can be transferred to Australian within a two year period following the grant of the visa);
  • Net assets of at least A$400,000 in one or more qualifying businesses (in at least two of the four fiscal years immediately before being invited to apply for the visa);
  • An annual business turnover of at least A$3 million (in at least two of the four fiscal years immediately before being invited to apply for the visa)
  • Ownership of at least:
    • 51 per cent of a business with a turnover of less than A$400,000 per year,
    • 30 per cent of a business with a turnover of more than A$400,000 per year, or
    • 10 per cent of a publicly listed company

Furthermore, unless the proposed business is deemed to be of exceptional economic benefit to Australia, applicants under this stream must be younger than 55 years of age.

New Investment Opportunities in Australia under the Subclass 132 (Significant Business History Stream)

Australia is looking to expand its investment options under the subclass 132 visa scheme, and interesting and exciting new project will be launching soon to bring investment and business opportunities to Australia’s north.  Migrant Innovation Northern Territory Program (MINT) and the Darwin Innovation Hub (DIH) are pioneering unique opportunities for people to migrate to Darwin, Australia.  The MINT program assists overseas nationals with obtaining Australian permanent residency if they have a demonstrated commitment to being involved in the region’s premier innovation hub and start up incubator, the Darwin Innovation Hub.  The program will also offer opportunities for the Subclass 188 visa as well.

In order to be eligible to partner with the MINT program under the Subclass 132 visa scheme you must meet all the above requirements associated with the visa.

Applicants must be willing to invest:

  1. A$500,000 into their own business in the Northern Territory or a start-up introduced by the DIH; and
  2. A$500,000 into a DIH partner Australian Private Equity and Venture Capital Association Limited (AVCAL) approved entity (this entity will make investments in DIH investment ready start-ups.

Visa Holder Requirements:

Visa holders must maintain a substantial ownership and active involvement in the business in the Northern Territory and maintain residence in the Northern Territory.

What do applicants receive?

Nomination by the Northern Territory Government for themselves and their family to receive Australian Permanent Residency.

 

  • Venture Capital Entrepreneur Stream

The Venture Capital Entrepreneur Stream is for applicants who have sourced venture capital funding from a member of the Australian Venture Capital Association Limited (AVCAL).

In order to apply under this stream, the applicant must have:

  • Have sourced at least A$1 million in funding from an Australian venture capital firm
  • The venture capital firm must be a member of the Australian Private Equity and Venture Capital Association Limited (AVCAL).
  • This funding must be used for:
    • the early-phase start-up of a business in Australia; or
    • the commercialisation of a product in Australia; or
    • the development of a high-value business idea in Australia; or
    • the expansion of a business in Australia.

Furthermore, the nominating State or Territory government agency must be satisfied that the net value of the business and personal assets of the applicant (together with their spouse/de facto partner – if applicable) is sufficient to allow them to settle in Australia.

 

Business Innovation and Investment (provisional) visa (subclass 188)

The Business Innovation and Investment (provisional) visa is a temporary stay visa which permits the holder to travel to, enter and remain in Australia for up to four years and three months from the date of the grant.

Prospective skilled migrants may apply for this Business Investment Visa either inside or outside Australia and must:

  • Satisfy a points test, assessing general attributes such as English language proficiency, education qualifications and business experience. Points may also be awarded for innovation.[3]
  • Be nominated by a state or territory government or Austrade
  • Be invited to apply for the visa
  • Meet additional investment requirements of the relevant steam.

Any income generated from complying investments are subject to tax under Australian taxation law. Subclass 188 holders can then apply for a Business Innovation and Business Investment Visa (permanent; subclass 888), allowing them to remain in Australia permanently.

The subclass 188 visa comprises five streams:

  • Business innovation stream
  • Investor stream
  • Significant investor stream
  • Premium investor stream
  • Entrepreneur stream

These streams cater for applicants with different business and investment goals in Australia:

  • Business Innovation Stream
    The business innovation stream is for Skilled Migration applicants who demonstrate a genuine desire to own and maintain a management role in a business in Australia. This stream allows applications from individuals with a proven successful business career, who have had an ownership interest in an established business or businesses that have had an annual turnover of at least AUD $500,000 for at least two out of the last four fiscal years. Applicants must meet the point score test of 65.

Applicants must be under 55 years of age at the time of application, unless the nominating state or territory waive this requirement.

Additionally, Business Investment Visa applicants must establish that:

  • They own at least one of the following percentage in their nominated main business:
    • 51 per cent, if annual turnover is less than AUD $400,000
    • 30 per cent, if annual turnover if more than AUD $400,000
    • 10 per cent , if business is a publicly listed company
  • At time of invitation they or their partners must have a total net business and personal assets of at least AUD $800,000. Assets must be lawfully acquired and available to transfer to Australian within two years of the visa being granted.

From 1 July 2015, a subclass 188 visa in this stream will be valid for four years, and holder can apply for one extension for an addition two years.

 

  • Investor Stream
    The investor streams are for applicants who have a genuine intention to invest in an Australian state/territory or government security of at least AUD $1.5 million.  This stream allows applications from individuals with high level management skills in relation to investment and at least three years’ experience of direct involvement in managing qualifying businesses or eligible investments. Applicants must meet the point score test of 65 and have a genuine intention to live for at least two years in the state or territory in which they make the designated investment.

Business Investment Visa applicants must be under 55 years of age at the time of application, unless the nominating state or territory waive this requirement on the grounds that the proposed investment will be of exceptional economic benefit to the nominating state or territory.

Additionally applicants must:

  • Have had business and personal assets of at least AUD $2.25 million for the past two fiscal years
  • For at least one of the past five years:
    • Management a business in which they held 10% of shares
    • Managed eligible investments of at least AUD $1.5 million in value

From 1 July 2015, a subclass 188 visa in this stream will be valid for four years.

 

  • Significant Investor Stream
    This stream is for applicants who are willing to make a complying investment of at least AUD $5 million in the Australian economy and have genuine intention to hold the investment for at least four years.  Applicants must demonstrate a realistic commitment to living in Australia for at least 40 days per year for the duration of the provisional visa.

The complying investment must be made in the following proportions over four years:

  • At least AUD $500,000 in venture capital and growth private equity funds which invest in start-ups and small private companies
  • At least AUD 1.5 million in approved managed funds investing in emerging companies listed on the Australian Stock Exchange
  • At least AUD $3 million in managed funds that may invest in a range of assets, including ASX listed companies Australian corporate bonds or notes, annuities and commercial real estate.

Direct investment in residential real estate is prohibited for this visa and indirect investment in residential property through managed funds is very strictly limited.

From 1 July 2015 a subclass 188 visa in this stream will be valid for four years, holders can apply for up to two extensions for a total of additional four years.

  • Premium Investor Stream
    This stream is for applicants who have a genuine interested and intent to making an AUD $15 million investment into the Australian economy and will hold the complying investment for the whole of the visa period. Nominations for this stream are made exclusively by Austrade on behalf of the Australian government.

The complying investment can made in any of the following options:

  • Australian securities exchange listed assets
  • Australian government bonds or notes
  • Corporate bonds or notes issued by an Australian exchange listed entity or investment grade rated Australian corporate bonds or notes rated by an AFS licenced debt rating agency.
  • Australian proprietary limited companies
  • Real property in Australia excluding residential property
  • Deferred annuities issued by Australian registered life companies
  • State or territory government approved philanthropic contribution

This stream offers applicants a faster route to permanent residency, however applicants must demonstrate a real commitment to continuing the investment after the provisional visa expires.

From 1 July 2015, a subclass 188 visa in this stream will be valid for four years, this stream does not offer any extensions.

  • Entrepreneur Stream
    This stream is for applicants who are undertaking or proposing to undertake a complying entrepreneurial activity in Australia. Applicants must be under 55 years of age at the time of application. Complying entrepreneurial activities must be legally enforceable agreements to receive funding with at least AUD $200,000 and cannot relate to residential area estate, labour hire or purchase or an existing enterprise or franchise in Australia.

Applicants must also establish that:

  • They have competent English at the time of application
  • 10% or more of the funding is payable to the entrepreneurial entity within 12 months of the activity starting in Australia
  • At they held at least a 30% interest in the entrepreneurial entity when they entered the agreement
  • That they have a business plan specifying how the idea will lead to the commercialisation of a product or service in Australia, or the development of an enterprise or business in Australia

From 1 July 2015, a subclass 188 visa in this stream will be valid for four years.

 Business Innovation and Investment (Permanent) visa (subclass 888)

The subclass 888 Business Investment Visa allows holders of the subclass 188 visa to remain in Australia on a permanent basis to continue their business/entrepreneurial or investment activity in Australia.

Migrant Coming to Australia must demonstrate that they have met all the criteria for their subclass s188 visa and have not been involved in any unacceptable business or investment activities. All applicants must again be nominated by an Australian state/territory or Austrade and demonstrate a realistic commitment to maintain their business/investment activities.

There are additional requirements based on which stream of the subclass 188 visa the applicant holds:

  • Business Innovation Stream – applicants must have been in Australia and held the provisional visa for at least one year in the two years immediately before applying
  • Investor Stream – applicants must have been in Australia and held the provisional visa for at least two of the four years immediately before applying AND applicants and or their partners must have held a designated investment with an Australian state/territory for at least four years.
  • Significant Investor Stream – applicants must been in Australia and held the provisional visa for at least 40 days per year (calculated cumulatively) for the period of time they have held the visa or the applicants spouse has been in Australia for at least 180 days per year during the time the primary applicant has held their visa.

In addition, the applicants and or their partners must also have held complying investments for 4 years continuously whilst on the provisional visa and complied with all other conditions relevant to the investment requirements.

  • Premium Investor Stream – applicants are eligible to apply once they have held their provisional visa for one year and have complied with their investment obligations for at least one year.
  • Entrepreneur Stream – applicants must have been in Australia and held the provisional visa for a continuous period of at least four years immediately before applying. Additionally applicants must demonstrate a successful record of entrepreneurial activities in Australia during this time.

Investor Retirement visa (subclass 405)

This visa is a temporary visa for self-funded retirees who have no dependents (other than a partner) and want to live in Australia during their retirement years. This is the only retirement visa that Australia offers and is granted for a period of four (4) years. This visa will not lead to permanent residency.

This Investor Requirement visa requires the applicant to be 55 years old or older and to be sponsored by an Australian state or territory government agency. Once granted, this visa allows the applicant to work for up to 40 hours per fortnight.

Asset Test

One of the main requirements for this Investor Requirement visa is that the applicant and their partner (if applicable) must have assets valued at least AUD 750,000. This amount can be reduced to AUD 500,000 if the applicant intends to live in regional Australia.

These assets must be legally owned and lawfully acquired whilst also being capable of and available for, transfer to Australia. All assets listed must be held for two years before lodging the investor retirement visa application, unless they are related to superannuation, pension and/or inheritance.

It should be noted that this asset test only applies to new Investor Requirement visa applications. If the applicant chooses to apply for a renewal of this visa, they are not required to meet the assets test again.

Designated Investment

In addition to the asset requirements, the applicant and their partner (if applicable) must have made a designated investment of at least AUD 750,000 in their name, in the Australian state or territory in which they have been sponsored. Similar to the assets test, this amount can be reduced to AUD 500,000 if the applicant intends to live in regional Australia.

The designated investment must be maintained for the duration of the Investor Retirement visa. Furthermore, the amount of the designated investment decreases by AUD 250,000. This means that if the applicant reapplies for the Investor Retirement visa, a designated investment of AUD 500,000 must be made and maintained. If the applicant lives in regional Australia, a designed investment of AUD 250,000 must be maintained.

Income

Finally, the applicant and their partner (if applicable) must have access to a minimum net income of AUD 65,000 per year. This amount is decreased to AUD 50,000 per year. This income test is applicable each time the applicant applies for an Investor Retirement visa and therefore, the applicant will need to show that their net income still meets this requirement.

Compelling and Compassionate Circumstances

On 1 July 2017, the Department made amendments to provide alternative requirement for this visa for applicants, in Australia, applying for a further Investor Retirement visa but cannot meet some of the criteria. Compelling and compassionate circumstances may be considered by the Department in cases where an applicant is suffering from hardship due to ailments associated with ageing or difficulties associated with ages/death of a partner.

[1] The Parliament of the Commonwealth of Australia, Report of the Inquiry into the Business Innovation and Investment Programme, March 2015 www.aph.gov.au/~/media/02%20Parliamentary%20Business/24%20Committees/244%20Joint%20Committees/Migration/BIIP/Report/Final%20Report.pdf, p. 6.

[2] Interview with Angela Julian-Armitage on 20 October 2017 for EB5 Investors Magazine: ‘President of Migration Institute of Australia shares insight about immigration down underhttp://www.eb5investors.com/blog/migration-institute-australia-president-interview-australian-immigration

[3] Schedule 7A, Migration Regulations 1994 (Cth)

Disclaimer: The information provided is not legal advice and is not intended to serve as legal advice. Immigration Solutions Lawyers do not accept any liability for any damages suffered by persons who rely on the general information provided on this website. Liability limited by a scheme approved under Professional Standards Legislation.