New frameworks for the Significant Investor Visa (SIV) and Premium Investor Visa (PIV) program are expected to encourage investment in innovative Australian ideas and emerging companies.
Following two rounds of consultation earlier this year, to which AusBiotech made submissions, the Federal Government has announced the new framework to take effect from 1 July 2015.
In launching the framework review, Trade Minister Andrew Robb said: “Our objective is to see greater investment from the SIV in areas where there tends to be thin capital flows. We are particularly interested in seeing investment in innovation and the commercialisation of high quality Australian ideas, research and development.”
Previously, investment through the SIV program was largely going into passive investments like government bonds and residential real estate funds – areas that already attract large capital flows.
AusBiotech CEO Dr Anna Lavelle agreed that the review had a valid objective.
“High tech industries like biotechnology are exactly the type of R&D-based innovative industry that will benefit Australia’s economy in the future," she said. "The industry’s development in Australia is sorely hampered by the lack of early stage and venture capital, even more so since the demise of the Innovation Investment Fund (IIF) in the last Federal Budget."
She continued, “The new SIV and PIV requirements, pose an important opportunity for small Australian technology companies, and in time, Australia’s economic sustainability.”
“The IIF was, from the Industry’s perspective, a stand-out success and provides an excellent model to flow cash to companies via Australian venture capital firms investing in life sciences, such as GBS Ventures, BioScience Managers and Brandon Capital.”
Under the new framework, SIV applicants will be required to invest at least $5 million over four years in complying investments, which must now include:
- At least $500,000 in eligible Australian venture capital or growth private equity fund(s) investing in start-up and small private companies. The Government expects to increase this to $1 million for new applications within two years as the market responds;
- At least $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); and,
- A ‘balancing investment’ of up to $3 million in managed fund(s) or LICs that invest in a combination of eligible assets that include other ASX listed companies, eligible corporate bonds or notes, annuities and real property (subject to the 10% limit on residential real estate).
The new arrangements are part of the Government’s Industry Innovation and Competitiveness Agenda, announced by the Prime Minister in October 2014. Austrade will become a nominator for the SIV, alongside State and Territory Governments, and the sole nominator for the PIV.
The Government intends to introduce a new PIV from 1 July 2015 targeting talented entrepreneurs and innovators.
The PIV will offer an accelerated 12 month pathway to permanent residency, for those meeting a $15 million threshold.
The PIV will be available at the invitation of the Australian Government only, with potential recipients to be nominated by Austrade. This programme will be rolled out over the next year, focussing on attracting a small number of highly talented and entrepreneurial individuals. States and Territories will play an important role in helping to identify potential applicants.
A link to the Government’s announcement and further information on the new complying investment framework for the SIV and PIV can be found at the Austrade website.