Introduction
The Significant Investor Visa (SIV) is a pivotal part of Australia’s strategy to attract foreign investment and stimulate economic growth. Launched in 2012, the SIV programme provides an opportunity for individuals to invest and reside in Australia, with the minimum investment set at AUD 5 million into complying investments over a four-year period. The SIV programme is part of the Business Innovation and Investment Program (BIIP) initiative under the Department of Home Affairs.
The SIV and Its Role in Boosting Investment
Eligible individuals who are keen to invest in Australia are required to make their investments in three key areas:
- A minimum of AUD 500,000 in eligible Australian venture capital or growth private equity funds investing in start-up and small private companies
- At least AUD 1.5 million in an eligible managed fund(s) or Listed Investment Companies (LICs) that invest in emerging companies listed on the Australian Securities Exchange (ASX)
- A ‘balancing investment’ of up to AUD 3 million in fund(s) or LICs that invest in a combination of eligible assets that include other ASX listed companies, eligible Australian corporate bonds or notes, annuities and real property in Australia (subject to the 10% limit on residential real estate)
By diversifying the areas of investment, the SIV programme ensures that foreign capital is injected into a variety of sectors, supporting both large and small scale enterprises.
The Economic Impact of the SIV
The SIV has played a significant role in the Australian economy since its inception. By 2019, over AUD 10 billion had been generated through the SIV programme, with over 2,000 residents in Australia holding an SIV. This influx of foreign capital has been a catalyst for economic growth and innovation within the country.
The investments made through the SIV programme not only help to boost employment and production of goods and services but also stimulate the export of goods and commercial activity. Foreign investment, in particular, can help businesses expand by opening up global supply chains, entering into international markets, and introducing companies to new technology. A 10% rise in foreign investment has been found to raise Australia’s GDP by 1.2%, increase wages by just over 1%, and elevate employment by approximately 0.3%.
Navigating the Application Process
The application process for the SIV is straightforward:
- An Expression of Interest must be submitted on the Australian government Department of Immigration and Border Protection’s SkillSelect website.
- After receiving an invitation to lodge an application for visa nomination, applicants will be assessed by the Victorian Government within ten business days at no cost.
- Once nominated by the Victorian Government, applicants will be invited to lodge a visa application through SkillSelect.
Critiques of the SIV
Despite the clear benefits of the SIV, it has not been without criticism. In 2016, the Australian Government’s Productivity Commission called for the abolishment of the SIV. The Commission pointed to concerns such as the uncertainty of retaining an SIV, the lack of English language requirements that could impose further costs on Australian society, and the potential for the SIV to encourage fraud and money laundering. However, institutions like Austrade and the Australian Private Equity & Venture Capital Association Limited (AVCAL) have argued against these concerns, stating that it is difficult to predict the long-term economic benefits of the SIV, given that it was only introduced in 2012.
Looking Forward
The importance of the SIV programme is set to increase, particularly in the wake of the global COVID-19 pandemic. As Australia seeks to recover and stimulate its economy, investor-related visas are expected to take priority. In 2021, the number of places available for the SIV almost doubled from 6,862 to 13,500. This emphasis on the SIV and similar programmes underscore the strategic role that foreign investment plays in Australia’s economic future.
