A new migration program will allow those with $5 million dollars investment capital to skip over skilled migration requirements, a timely remedy for Australia’s youthful start-up ecosystem, writes Andy Park.
Wealthy foreign nationals who can bring $5 million dollars to Australia will be allowed to bypass the skilled migration system.
The Department of Immigration and Citizenship's (DIAC) Significant Investor Visa, or the so-called “golden ticket" visa, commences tomorrow.
It relaxes requirements such as English proficiency and a minimum stay in Australia, in return for capital input in a list of endorsed investments.
The government will reportedly allow 700 wealthy investors into the country, with a potential of $3.5 billion dollars worth of investment to the Australian economy.
The Minister for Immigration and Citizenship, Chris Bowen MP, said the new visa is consistent with countries such as the United Kingdom, Canada and New Zealand, which provide for migration on the basis of investment of a specified size and conditions.
“The Significant Investor visa is an important new tool in the armoury of Australia's financial services sector as Australia looks to compete in our region for high wealth and high skilled migrants and the capital that comes with them.”
WHAT MUST THEY INVEST IN
• Infrastructure projects in Australia
• Cash held by Australian deposit taking institutions
• Bonds issued by the Commonwealth or a State or Territory government
• Bonds, equity, hybrids or other corporate debt in companies and trusts listed on an
Australian stock exchange
• Bonds or term deposits issued by Australian financial institutions
• Real estate in Australia; and
• Australian agribusiness.
It's being seen by some as a remedy for cashless state-based infrastructure projects and embryonic innovation industries, such as technology start-ups.
A report released by Deloitte showed that fewer than 5 per cent of Australian start-ups are scaling into sustainable, global businesses.
Added to that is the tough local market for innovation investment, for example in the US, companies are raising 4.8 times more capital in the early stages and 100 times more when they are ready to scale their operations up.
Joshua Tanchel from Deloitte says that the influx of capital may focus the ambitions of those in the under-performing start-up ecosystem.
“Asian investors with capital understand the resource story very well. Entrepreneurs and start-ups are the greatest natural resourse of this country, yet we are choosing to leave them in the ground because we are starving them of capital and the oxygen to breathe," he said.
Australian-Indian business leader technology industry and Neville Roach AO has advised both Indian and Australian governments on migration policy.
Mr Roach himself was a skilled migrant from southern India, but says DIAC's relaxation of the migration rules is exactly what Australia needs to remain competitive, especially in new business generation.
"I think we should be doing more of that,” he said.
“The start-up system in Australia has surprisingly achieved far less than one would hope from a country that has a considerable amount of innovative capability and a good track record.”
WHAT INVESTMENTS QUALIFY
• The company must genuinely operate a qualifying business in Australia
• The applicant must obtain an ownership interest in the company
• The company must be registered with ASIC; and
• The business must have an Australian Business Number.
Mr Roach said that there needs to not only be checks on the revised system to ensure that the investment capital is being put to good use.
“There are also questions that would have to be put to economic modellers, the flow of money may put some upward pressure on the dollar.”
But overall, he feels that if we do not continue to attract overseas students, highly-skilled workers and investment capital with visa programs like the one commencing tomorrow, all three will go elsewhere.
“In many ways this is not that different to what used to be called the investment led visa.”
“There needs to be some flexibility to allow for innovation."