Tighter targets for investor visas

Federal Trade Minister Andrew Robb has given a sneak preview of changes to the Significant Investor Visa program and there’s a sting in the tail for those mainly Chinese investors who have been pumping $5 million into capital guaranteed bonds in order to buy Australian residency.

In the future those wishing to buy their way into Australia will have to put their money at risk by investing in venture capital funds.

“If people want to come here they need to make a contribution,” Robb told the Australian Financial Review outside the APEC forum in Beijing, where he is also trying to negotiate a bilateral trade deal. “Just buying bonds does nothing for us,” he said.

The proposed changes would stop foreign investors from parking money in low-risk bonds, waiting for them to mature and fours years later picking up their Australian passports.

The investor visa program was initiated in 2012 and was expected to see mainly Chinese money head into ‘compliant’ managed funds or venture capital, but in reality those investors have proved to be risk averse and the money has gone in government-backed bonds.

In China the scheme has proved popular with wealthy investors looking for greater security for their money and a ‘safe haven’ country if something goes wrong in their homeland. The scheme’s popularity has been boosted by Canada closing down a similar scheme in August.

Under the new “platinum” visa, known as the Premium Investor Visa, applicants will be guaranteed permanent residency within 12 months if they invest $15 million.

The $5 million visa provides residency after four years. Both visas have no requirement for English language proficiency.

Since its debut the scheme has seen $2.2 billion invested in complying funds. Applicants awaiting final approval have committed a further $2.9 billion.

The keener focusing on what the significant investor visa program aims to achieve comes at a time when the Federal Government is examining a report on the impact of Chinese investment on the Australia property market and whether buyers have been using illegal structures to circumvent foreign investment rules on property transactions.

That report is not expected to be released until the end of the month after the conclusion of the visit by Chinese President Xi Jinping next week.

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