You can only invest $500,000 in your friend’s business.
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Is it possible to participate in Australia’s Significant Investor Visa program with a passive investment?
I would like to make an investment in my friend’s business in Australia. I will not be involved in the management of the business. Will this qualify me for a Significant Investor Visa? If not, what visa type of Australia grants residency to investors and allows passive investment?
Answers
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There are various investor visa options with the levels of investment and your direct management of these investments also varying. Your eligibility for these will depend upon your experience in business ownership and/or your investment background.
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The Significant Investor Visa program is in itself a passive investment program but it requires you to take up complying investments during the four years of your subclass 188 visa. For this visa, the minimum quantum you must invest out of the required AUD$5 million is spread out over three types of investments: a minimum of $500,000 in venture capital or growth private equity funds into small private companies and startups; a minimum of $1.5million in eligible managed fund or listed investment companies; and minimum of up to $3 million in managed funds comprising of Australian listed securities, eligible corporate bonds/notes, annuities and real estate. Your investments will be managed and monitored by licenced investment fund management companies. The other passive investment program is the Investor Visa stream under the Subclass 188 visa program which requires you to invest $1.5 million in state bonds for four years. You are not required to run any other business for these two visa streams during your visa term as long as you have fulfilled your required investment sum.
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Investments for the SIV program are permitted through a “Fund of Fund” (FoF) or an investor directed portfolio service into complying managed funds only. Investments must be provided by an Australian Financial Services licensed manager domiciled in Australia. There are mandatory investments that must be made with the $5 million investment in the following proportions: 10% into a venture capital/private equity fund and 30% into an emerging companies fund. The remainder or the balancing Investment of 60% can be made into complying funds which can include companies listed on an Australian securities exchange. A designated fund manager will be able to assist in this regard. Most Registered Migration Agents with experience in SIV work very closely with experienced fund managers.
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