Business Innovation and Investment Program update: changes to investment framework

6 minute read  20.05.2021 Anna Gunning-Stevenson, Taya Hunt

The Australian government has announced significant changes to the Business Innovation and Investment Program (BIIP).


Key takeouts

  • The Australian government has announced significant changes to the Business Innovation and Investment Program (BIIP).

 

  • The BIIP offers permanent residency pathways for business owners, investors and entrepreneurs who wish to relocate or expand their business and investment activities to Australia.

 

  • The upcoming changes will provide for faster pathways to permanent residency for investors, as well as the potential for increased returns on investment.

 

The BIIP offers permanent residency pathways for business owners, investors and entrepreneurs who wish to relocate or expand their business and investment activities to Australia. The upcoming changes will provide for faster pathways to permanent residency for investors, as well as the potential for increased returns on investment.

What changes were announced?

The Morrison Government is reforming the BIIP with a view to maximise the economic contribution of the program to Australia's COVID-19 economic recovery.

Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs Alex Hawke announced the following key changes to the BIIP yesterday:

  • The subclass 188 (Investor Stream) visa (Investor Visa) investment threshold will increase from A$1.5million to A$2.5million.
  • The subclass 188 (Significant Investor Stream) visa (Significant Investor Visa) investment threshold will remain unchanged at A$5million.
  • A new Complying Investment Framework (CIF) will now apply to both the Investor Visa and Significant Investor Visa.
  • The new CIF breakdown is:
  • 20% venture capital and Private Growth Equity funds (VCPE), up from a previous 10%;
  • 30% funds investing in emerging companies; and
  • 50% in balancing investments, down from a previous 60%.
  • Funds will be required to produce independent audit reports annually to show their compliance with the new CIF.

The purpose of these changes is to increase the amount of foreign investment through these visa programs and to shift the focus of investment towards venture capital and private growth equity. Investor Visa applicants will now have the potential to reap better returns on their investments from the previous conservative returns offered on state/territory government bonds.

Other BIIP changes were previously announced by former Acting Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs Alan Tudge on 17 December 2020. These changes are:

  • The permanent subclass 132 visa and provisional subclass 188 (Premium Investor) visa will be removed from Australia's visa program.
  • The visa period for all visas in the BIIP will be increased from 4 to 5 years, while the wait time to apply for permanent residency will reduce from 4 to 3 years, once requirements are met.
  • The threshold requirements for the subclass 188 (Business Innovation Stream) visa (Business Innovation Visa) will be increased, requiring applicants to hold assets of A$1.25million and have an annual turnover of A$750,000 in their main business(es).
  • The A$200,000 funding threshold for the subclass 188 (Entrepreneur Stream) visa (Entrepreneur Visa) will be removed, meaning that applicants can apply for the visa without the need to first source specific funding for their entrepreneur activity.

When will the changes apply?

The changes to the BIIP will come into effect from 1 July 2021, and will affect visa applications lodged after their implementation.

What does the new Business Innovation and Investment Program look like?

From 1 July 2021, the simplified BIIP will provide for four visa options:

 

Business Innovation and Investment

Business Innovation Visa


Who is the visa for?

Successful business owners who wish to own and operate a business in Australia

Key threshold

Must have assets of A$1.25million to bring to Australia

Business innovation and investment

Investor Visa


Who is the visa for?

Experienced business persons or investors who wish to invest in Australia

Key threshold

A$2.5million investment into a Complying Investment Framework

Business innovation and investment

Significant Investor Visa


Who is the visa for?

High net worth individuals who wish to invest in Australia

Key threshold

A$5million investment into a Complying Investment Framework

Business innovation and Investment

Entrepreneur Visa


Who is the visa for?

Entrepreneurs who wish to undertake complying entrepreneur activity in Australia

Key threshold

Must have an innovative idea that will lead to the commercialisation of a product or service, or the development of an enterprise in Australia

All four visa options provide for a faster permanent residency pathway of three years once additional criteria is met.

How can MinterEllison assist?

MinterEllison's migration team has substantial experience in a wide range of migration issues, including visa strategies for high net worth individuals, investors, entrepreneurs and business owners. Together with our taxation and corporate law specialists, our migration team is ideally placed to provide you with holistic advice on visa options and pathways to permanent residence in the context of business, financial and personal goals and limitations, and guide applicants through the application process in a seamless and efficient but personalised manner.

Contact

Tags

eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.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.RaJn603uCrtlO4hApIefkIdBXlLgDsx24coS-Ojs58o
https://www.minterellison.com/articles/business-innovation-and-investment-program-update-changes-to-investment-framework

Point of View: insights into key issues and challenges facing business today.

In this series of interviews with MinterEllison partners we hear their perspective on key areas of interest to our clients and the business community.