Venture Capital and Growth Private Equity
Integrity and Promotion
What is Austrade's role in the SIV program?
Austrade has two primary responsibilities under the enhanced SIV program:
- Nominate potential SIV applicants (along with state and territory governments);
- Assess the complying investment framework design on an ongoing basis to ensure the program achieves its objectives over time.
Austrade has policy oversight of the SIV complying investment framework. The Department of Home Affairs is responsible for the management of the migration program, including regulatory changes, implementation and ongoing administration.
What is a “complying” investment for the SIV?
Applicants are required to invest at least $5 million in complying investments, which must include:
- At least $500,000 in eligible Australian venture capital or growth private equity (VCPE) fund(s) investing in start-up and small private companies.
- At least $1.5 million in an eligible managed fund(s) or Listed Investment Companies (LICs) that invest in emerging companies; 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 Australian listed securities, eligible corporate bonds or notes, annuities and real property (subject to the 10 per cent limit on residential real estate).
A one page outline of the complying investment framework is available here. Any enquiries should be directed to firstname.lastname@example.org
Is information available in Chinese?
An outline of the complying investment framework is available in simplified Chinese here.
Do I have to make all of my SIV complying investments through AFS licensed managers?
Yes. All SIV investments must be provided by an Australian Financial Services (AFS) licensed manager(s) domiciled in Australia. Fund managers must be independent of the applicant, the applicant’s spouse or de facto partner, and any associate (within the meaning of the Corporations Act 2001) of the applicant.
Can I invest in a Fund of Funds (FoF) or Investor Directed Portfolio Service (IDPS)?
Note: This is when a managed investment fund is used as the FoF.
A ‘fund of funds’ (FoF) is generally a managed investment fund that invests in other funds. An ‘investor directed portfolio service’ (IDPS) is generally a custody and reporting service that allows an investor to invest in managed investment funds and other financial products.
An investor can invest separately into each component of the significant investor visa complying investment framework, or alternatively can invest through an FoF or IDPS.
Under the significant investor visa complying investment framework, an investor is permitted to invest in managed investment funds through an FoF or IDPS, provided the managed investment fund(s) in which the FoF or IDPS invests comply with the other requirements of the complying investment framework.
It is also the intention to allow an investment in venture capital funds through an FoF or IDPS provided the venture capital fund(s) in which the FoF or IDPS invests comply with the other requirements of the complying investment framework. A venture capital fund includes an Australian venture capital fund of funds (AFOF) conditionally registered, or unconditionally registered, under the Venture Capital Act 2002 (Cth). An AFOF can in turn invest in other Early Stage Venture Capital Limited Partnerships (ESVCLP) and Venture Capital Limited Partnerships (VCLP) and their investees.
What is an Investor Directed Portfolio Service?
Investor Directed Portfolio Services are unregistered managed investment schemes for holding and dealing with one or more investments selected by investors. In broad terms, they provide custodial, transactional and reporting services, while the investor retains management and control of the investment decisions. For more information, please refer to the Australian Securities and Investments Commission.
What does ‘central management and control' mean in Migration (IMMI 15/100: Complying Investments) Instrument 2015, sections 9(4) and 11(4)?
When determining whether:
- a company or managed investment scheme referred to in section 9(3)(c) of the Instrument; or
- a person (other than an individual) referred to in section 11(3)(a) of the Instrument;
(together a 'body') is taken to have its 'central management and control' (CM&C) in Australia, regard should be had to the meaning given to this expression in relevant case law and in ATO Taxation Ruling TR 2004/15.
Broadly, determining CM&C involves an analysis of who is responsible for the strategic decision making of the body and where and when this occurs. By way of an example, coming to Australia for the purpose of holding a board meeting but conducting regular management decisions offshore would not be considered to be in compliance as this would indicate an artificial or contrived CM&C outcome. If the CM&C occurs in a place outside of Australia, then the body cannot be regarded as satisfying the requirements of the Instrument.
Venture Capital and Growth Private Equity
What is Venture Capital and Growth Private Equity (VCPE)?
The SIV complying investment framework requires applicants to make a mandatory investment of $500,000 (10% of their SIV investment) into VCPE funds. VCPE is a form of investment that provides capital to typically new, innovative or fast-growing unlisted companies.
What VCPE funds can I invest in?
In order to be eligible to take SIV investment, a VCPE fund must be registered under the Early Stage Venture Capital Limited Partnership (ESVCLP) or Venture Capital Limited Partnership (VCLP) programs, operated by the Department of Industry, Innovation and Science.
The Department of Industry, Innovation and Science is responsible for the administration of the Early Stage Venture Capital Limited Partnership (ESVCLP) and Venture Capital Limited Partnership (VCLP) programs. Please follow this link to access the Department’s web pages on ESVCLP and VCLP programs. It contains information on the process for registering funds, eligibility criteria and lists of funds registered under the ESVCLP and VCLP programs.
Are venture capital fund investments for terms longer than the four-year SIV visa?
VCPE funds mostly require longer investment terms than the four-year provisional visa period. It is the responsibility of SIV applicants to decide whether they are willing to invest for periods longer than the provisional visa period.
Where can I find lists of SIV-eligible funds investing in VCPE and emerging companies?
Individual fund managers are responsible for certifying their compliance under the SIV program to the Department of Home Affairs. The Department of Industry, Innovation and Science publishes lists of the funds registered under the ESVCLP, VCLP and AFOF programs on their website, but does not specify SIV eligibility. If you have any further questions on the programs, they can be addressed to the Department of Industry, Innovation and Science via phone (13 28 46) or email (email@example.com).
Is the investor required to sign an individual commitment agreement with the general partner of the venture capital fund? If so, how does this work for a manager offering a fund of funds (FoFs) solution?
Note: This is when a managed investment fund is used as the FoF.
Yes. For a venture capital fund investment, the investor (that is, the visa applicant) is required to enter into an agreement with the general partner of the venture capital fund(s). This is the case even where the visa applicant intends to invest in the venture capital fund(s) through a ‘fund of funds’ or ‘investor directed portfolio service’. The visa applicant can enter into this agreement directly or the ‘fund of funds’ operator or ‘investor directed portfolio service’ operator can enter into the agreement as agent for the investor. Further, the investor (that is, the visa applicant) is required to commit a minimum of $500,000 to a venture capital fund(s). This amount is to be net of any fees or costs associated with an FoF or IDPS.
What are investments in Australian real property and how does the restriction on residential real property investments apply?
Section 10(3)(d) of the Migration Instrument allows investment in “Australian real property” as a “balancing investment”. These investments are, however, subject to the restrictions in section 11(7) of the Migration Instrument. Section 11(7) provides:
The following requirements apply to investment by a managed investment fund in Australian residential real property, including any Australian land zoned for residential use (a residential real property investment):
- no direct residential real property investment may be made through the fund;
- no other residential real property investment (including, but not limited to, a debt or equity instrument, or a derivative) may be made through the fund unless:
- the value of all residential real property investments is no more than 10% of the value of the fund’s net assets; and
- the investment is not made for the dominant purpose of deriving financial benefits; and
- the investment is not made for the dominant purpose covered by subsection (8).
Investment in “Australian real property” therefore includes, for the purposes of the Migration Instrument:
- a direct investment in “Australian residential real property” (defined in section 11(7) of the Migration Instrument); and
- an indirect investment in Australian residential real property through a debt or equity instrument, or a derivative.
An example of an indirect investment in Australian residential real property through a debt instrument includes a managed investment fund that invests in loans secured by a mortgage over real property for the purposes of making a profit.
Importantly, any balancing investment in residential real property (whether direct or indirect through a debt or equity instrument, or a derivative) must:
- restrict its exposure to residential real property investments to no more than 10% of the value of the managed investment fund’s net assets; and
- ensure that the residential real property investment is not made for the dominant purpose of deriving financial benefits; and
- ensure that the residential real property investment is not made for the dominant purpose of assisting the SIV applicant, their spouse or de facto partner or any other member of the SIV applicant’s family unit or their spouse or de facto partner’s family unit to reside in or gain legal ownership in Australian residential real property.
It follows that no residential real property investment can be made where the dominant purpose is to derive a financial benefit from doing so, regardless of the 10% limit.
No managed investment fund is permitted to use a SIV applicant’s contributions as security or collateral for a loan.
How do I apply for a SIV?
Austrade and state and territory governments can nominate SIV applicants to the Department of Home Affairs.
Individual states and territories may apply criteria as part of their nomination processes prior to nominating a candidate to the Department of Home Affairs for the SIV. For further information on individual state and territory government nomination requirements, please contact the relevant jurisdiction.
Austrade recommends applications for nomination be submitted to the state or territory government in which the applicant intends to reside to best access the full range of their settlement and aftercare services.
More information on how to apply for the SIV is available on the Department of Home Affairs website.
Integrity and Promotion
What integrity measures does the SIV program have?
The Department of Home Affairs maintains the integrity of the visa process, and applies robust integrity and compliance measures in its management and delivery of the Investor Visa program. Applicants undergo rigorous assessment, prior to the grant of a provisional visa and any subsequent grant of permanent residency, using information available to the Department of Home Affairs from various external sources. Applicants also undergo mandatory character and security checks. Integrity measures also provide for referrals to law enforcement authorities in source countries for background checks on applicants that have been identified as suspicious.
Can Austrade recommend a migration agent?
Only registered migration agents can legally give immigration assistance in Australia. Neither Austrade nor the Department of Home Affairs can recommend the use of a specific migration agent. However, details of registered migration agents can be found on the Office of the Migration Agents Registration Authority website at: www.mara.gov.au. The website allows you to search for an agent by name or location, including overseas.
Should I seek professional advice before applying or making a complying investment for the SIV?
Yes. Austrade urges all applicants to seek professional legal and financial advice before making any decision.
This is for information only and is not advice. Austrade does not guarantee its accuracy, currency or completeness. Any person relying on this information does so entirely at their own risk and Austrade urges any user to seek professional advice before making any decision. Austrade denies liability for any loss arising from reliance on information provided on this website.