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Premium Investor Visa (PIV) offering a more expeditious, 12 month pathway to Australian Residency.

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The new Premium Investor Visa (PIV) will require an investment of $15 million

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PIV holders will be eligible for permanent residency after holding the complying investment for 12 months.

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Thursday, 16 October 2014

Premium Investor Visa takes required offshore injection to $15 million

Premium Investor Visa
Premium Investor Visa
The Federal Government plans to introduce a new visa program, encouraging more high net worth individuals to make Australia home.

It proposes to create a new Premium Investor Visa (PIV) which offers a faster 12 month pathway to permanent residency for those who invest at least $15 million.

Changes are also being planned to the Significant Investor Visa (SIV) program which was established under the Labor government with the aim of encouraging foreign investment.

The SIV gives a pathway to permanent residency for those who invest at least $5 million in Australia for at least four years.

The PIV criteria for eligible investments are also being change so that they align with "the Government's national investment priorities".

These criteria will be determined by the Federal Government's Austrade agency in consultation with the key economic and industry portfolios.

Austrade will also become a nominating body for the SIV.

The PIV will be introduced from July 1, 2015, while the SIV changes will take place during 2014-15.

The targeted investment eligibility criteria will be determined by Austrade following consultation with key economic and industry portfolios.

It is likely the investors will quickly buy an Australian home, with fund manager Roger Montgomery suggesting property prices, at least at the high-end, could well be supported for some time yet.

"Wealthy foreigners often purchase property in Australia as an investment – a trend which has surely exacerbated house price inflation, particularly in Sydney and Melbourne,"

Wednesday, 15 October 2014

New $15m Visa - Premium Investor Visa

Advisers have cheered the creation of a $15 million fast track to permanent residency for wealthy foreigners, in a move by the Abbott government to harness Asia’s wealth to boost economic growth and job creation.

They said it puts Australia on the front foot in the competition for rich investors looking to safeguard their wealth in stable offshore markets.

“Australia competes with many countries for high net wealth migrants, making it an attractive prospect is in the national interest,” migration lawyer Alan Rigas said.

The premium investor visa program, announced on Tuesday as part of the government’s competitiveness agenda, gives permanent residency to applicants investing $15 million in certain assets after 12 months.

“The changes can only lead to more investment,” Prosperity Fountainguard Advisers’ Luke Malone said, who led a nine city investor roadshow throughout China in June.

Fountainguard has a second investor delegation currently en route to Shanghai, where it will present to more than 20 individuals looking to invest up to $20 million each. He said the visa, available from July 2015, will be “highly attractive” to this group.

But business migration agent John Findley feared much of this investment will be attracted to property assets. It will drive up prices, which many, including billionaire Lang Walker, said are already inflated by a flood of Chinese developers.

“The likelihood of the $15 million going into property is very real and very high,” said Mr Findley.

INVESTMENT CHOICES TOO BROAD
He said investment choices for compliant funds are too wide and the government should direct it towards infrastructure, or new investment in small and medium businesses.

NSW recently scrapped the requirement for significant investor visa applicants to park $1.5 million into low yield Waratah Bonds.

As part of the changes announced on Tuesday, Austrade will be handed responsibility for drawing up the list of complying investments.

While details are yet to be released, the government has indicated compliant investments will align to five sectors earmarked for growth: food, agri-business, mining technology and services, gas and energy resources, medical technology and pharmaceuticals, and advanced manufacturing.

Latest figures show that to July 1, the federal government has granted 286 significant investor visas, out of a total of 1027 applications, bringing $1.4 billion worth of foreign investment. Most came from China.

The significant investor visa program, which began in 2012, grants permanent residency to foreigners who invest a minimum of $5 million in prescribed assets after four years. A review by the department of immigration found other countries with similar investor visa programs “have less onerous application criteria and processing requirements”.

The government wants to “target premium investors more effectively”, and streamline the administration of the program. It also wants to “diversify the sources of investors” under the program, while maintaining safeguards to ensure it is not abused.


New Premium Investor Visa (PIV) Announced

The Government today announced important changes to the Significant Investor Visa and creation of a Premium Investor visa. 
The new Premium Investor Visa (PIV) will require an investment of $15 million, nomination by Austrade and has no residency requirements.  PIV holders will be eligible for permanent residency after holding the complying investment for 12 months.
Other changes include:
  • the involvement of Austrade in the nomination of applicants on behalf of the Australian Government and in determining complying investment policy
  • allowing 'role swapping' between primary and secondary applicants during the provisional visa stage​
  • introduction of 180 day residency requirements for secondary visa holders​
  • changes to improve visa processing times
The changes will be made progressively through the 2014-15 programme year, with changes requiring legislative amendment expected to come into effect from 1 July 2015.
These changes will not apply to current SIV holders or current applications.
Further information is available in the Department's SIV Fact Sheet and SIV Review FAQ Sheet


Tuesday, 14 October 2014

Premium Investor Visa (PIV), $15,000,000 VISA Federal Government expands investor, 457 visa schemes

The Federal Government is expanding the investor visa scheme and making it easier to hire workers on 457 visas.

The Significant Investor Visa (SIV) program was established under the previous Labor government with the aim of encouraging foreign investment.

The SIV gives a pathway to permanent residency for people who invest at least $5 million in Australia for at least four years.

The Abbott Government is proposing to create a new Premium Investor Visa (PIV) which offers a faster 12-month pathway to permanent residency for those who invest at least $15 million.

Changes are also being planned to the SIV, which the Government says include "streamlining and speeding up visa processing", more promotion of the program internationally and strengthening integrity protections.

The criteria for eligible investments are also being change so that they align with "the Government's national investment priorities".

These criteria will be determined by the Federal Government's Austrade agency in consultation with the key economic and industry portfolios.

Austrade will also become a nominating body for the SIV, complementing the current state and territory governments' role as nominators, and will be the the only body that can nominate applicants for the PIV.

The PIV will be introduced from July 1, 2015, while the SIV changes will take place during 2014-15.

At the same time, the Federal Government has also responded to a review of the 457 skilled worker visa program.

"The Government will streamline the processing of sponsorship, nomination and visa applications to reward low risk applicants and refocus compliance and monitoring activities on high risk applicants," the Prime Minister's office said in a statement.

It will also set English language requirements flexibility with regard to the industry and occupation for the visa applicant and increase the sponsorship approval period for 12 to 18 months for start-up businesses.

However, the minimum wage for 457 visa holders will remain at $53,900, ahead of a review within the next two years.

The Government also said other safeguards will also remain in place.

"It will continue to be a requirement that a foreign worker receives at least the same market rates and conditions that are paid to an Australian doing the same job in the same workplace," it said in the statement.

Monday, 13 October 2014

Premium Investor Visa - Tech entrepreneurs see future value in new industry policy

Australian technology entrepreneurs have said changes to the tax treatment of employee share options, greater investment in science skills and loosening of restrictions on using workers imported on 457 skilled migrant visas, would help level the playing field for startups trying to compete on the global stage.

As part of the government’s “Industry Innovation and Competitiveness Agenda,” released on Tuesday afternoon, previous rules that meant equity issued to employees was taxed at the point of issue, rather than when the options are exercised have been removed. Instead businesses with a turnover of less than $50 million will be able to provide employee share options at a small discount that will not be subject to up-front tax, as long as the employee holds the shares or options for at least three years.

In addition the maximum time for tax deferral has been extended from seven to 15 years, in a move the government said would give startups more time to be competitive and succeed.

Meanwhile following a review of the 457 Visa program, sponsorship approvals will extend from 12 to 18 months for startups, and English language requirements will become more flexible with a new caveat that standards need only be appropriate for the industries and occupations being sought.

As a further move, aimed at increasing the potential pool of investors in local businesses, the significant investor visa (SIV) class will be expanded to encourage more high net worth individuals to move to Australia.

Currently these visas are available for applicants having an eligible investment in Australia of $5 million, for a minimum of four years. Under the plans announced on Tuesday this will be extended to add a new Premium Investor Visa (PIV), offering a more expeditious, 12 month pathway to permanent residency than the SIV, for those meeting a $15 million threshold.

SKILLS ADDRESSED
In a further pillar of the new industry policy the government said it will invest $12 million to improve the focus on science, technology, engineering and mathematics (STEM) subjects in primary and secondary schools across the country.

Co-founder of online retailer Shoes of Prey Jodie Fox said the changes to ESOP rules were a positive move towards alleviating the legislative hurdles put in the way of early stage Australian businesses. She said the move to address educational short-falls in STEM, offered hopes that local startups would eventually not have to fight over scraps when it came to suitably skilled tech staff.

“Australia’s start up scene is teeming with enthusiasm but handicapped by regulatory frameworks. Relieving some of the tax issues around a key point of leverage for new businesses is a big step towards a flourishing ideas economy,” Ms Fox said.

“Improvement in the STEM disciplines along with the alleviating taxation on Employee Shares helps to address both sides of the issue. Firstly, growing technology talent here, and incentivising them to stay.”

The changes to ESOP rules have come too late to save founder of social networking intelligence company Local Measure Jonathan Barouch from spending a high price to establish share schemes under the old regime. However he said the changes had needed to be made for a long time.

He said Local Measure had set up an employee share scheme two years ago, but the system had been so complicated that it had cost $20,000 to get going.

REDUCING COSTS
“In the US, it is possible to buy an off-the-shelf share scheme and have it set up and in place for about $1000. That’s a very big difference when compared to Australia. The changes will level the playing field,” Mr Barouch said.

“The reality is that in Australia we are fighting for global talent. Employee share schemes are an important form of incentive for tiny companies that can’t afford to compete with the large upfront salary packages of multinationals, or more established companies with deeper pockets.”

He said short term cost savings from the new scheme would be very welcome, but he was more enthused by the longer term prospect that more talented youngsters will be encouraged to work for innovative startup companies.

“This impact should not be under-estimated. Some of the talented kids who might instead have gone to work for one of the big consulting firms - or left Australia altogether for Silicon Valley - may now be tempted to stay,” he said. “The changes will make a huge difference among the grassroots of the start-up sector.”

Aside from the 457 Visa changes introduced, Mr Barouch said he had also been hoping for a visa class specifically aimed at entrepreneurs, which he believed would help attract budding innovators, who would rather move to Australia than Singapore or across to the UK.

Co-founder of tech-focused venture capital firm BlackBird Ventures Rick Baker said employee share schemes had become one of Silicon Valley’s core tools for creating hugely valuable businesses. He said he was currently working with startup that was struggling to hire two top people due to its inability to provide a simple employee option plan that didn’t punish the employees with upfront tax.

“Denying Australian startups this tool makes it harder to convince the best people to join our startups and is one of the factors for moving our best businesses offshore. Most of all it denies us the opportunity to spread rewards for success to a wider group of those responsible for it,” Mr Baker said.

“Creating a viable ESOP system for Australia will in fact increase long term tax revenue, as it will foster innovation.”

PREVIOUS FRUSTRATION
Speaking at the Bradfield lecture in Sydney on Monday night, co-founder of high profile Australian tech success story Atlassian Scott Farquhar said the previous share option policy had forced workers overseas.

He said Atlassian had recognised the vital importance of having share-incentivised staff at a startup and had been giving employees options from the start. However he said, due to the system in place, this had cost the company $5.4 million in tax.

“We made it a priority and were lucky that we could afford it, but many other companies are not in the same fortunate situation we were in,” Farquhar said. “It is another disincentive to stay in Australia if you have a tech sector start-up.”

Mr Farquhar also pointed to a shorfall in Australian education as a major headwind on the local tech sector. He said enrolments in tertiary computer science were falling, at the same time as demand for technologically literate workers skyrocketing.

“This lack of university interest probably starts at the school level, where there no uniform national requirement to teach computer and software skills,” he said.

Premium Investor Visa - Start-ups win $200m tax breaks for share perks

The Abbott government will introduce a $200 million tax break for employee share schemes, invest $188.5 million into innovation centres, and overhaul skilled worker visas, as part of a $400 million industry policy.

Prime Minister Tony Abbott announced the “Industry Innovation and Competitiveness Agenda” on Tuesday, which aims to drive growth and jobs in five industries: food and agribusiness; mining equipment and services; oil, gas and energy; medical technology and pharmaceuticals; and advanced manufacturing.

A key part of the agenda is changes to the tax treatment of employee share schemes to encourage entrepreneurship and start-up companies.

Businesses with a turnover of less than $50 million will be able to provide employee share options at a small discount that will not be subject to up-front tax, as long as the employee holds the shares or options for at least three years.

Only companies that are unlisted and incorporated for less than 10 years will be able to apply, and their employees will be able to defer their tax bills from seven years to 10 years.

The government will also reverse the 2009 changes by Labor to employee share schemes which impose immediate tax liability on employees with share options and triggered many schemes to shut down almost overnight.

The government will also update the “safe harbour” valuation tables used by companies to value their options so that they reflect current market conditions.

The controversial 457 visa program will also be overhauled to make it easier for employers to hire skilled overseas workers “while maintaining strong safeguards against abuse”.

“A business that is forced to close because it is unable to access the labour that it requires employs no-one,” the government said.

“That is a lose-lose situation for both employers and employees.”

The government will streamline the processing of sponsorship and visa applications to reward low-risk applicants, give start-ups more time to become sustainable by increasing the sponsorship approval period from 12 months to 18 months, provide greater flexibility in English language testing to ensure the standards are appropriate for their industry.

The government will retain the temporary skilled migration income threshold at $53,900 but will review that level in the next two years.

The government will also expand the significant investor visa program to encourage more high net worth individuals to move to Australia.

It will introduce a premium investor visa offering a speedier approval for permanent residency if the investor invests $15 million or more, from 1 July 2015.

Sunday, 12 October 2014

Premium Investor Visa - Surge in Chinese property buys takes state total to $462m

CASHED-up Chinese buyers have tripled their spending on Queensland real estate, farmland and commercial property since the global downturn, outlaying a record $462 million last financial year.

The Chinese almost doubled their real estate spending in the Brisbane City Council area during 2013-14, to a record $185m — up from $96m the previous year.

China is now the biggest source of foreign investment in real estate in Queensland, the only state or territory to track purchases by offshore buyers.

On the Gold Coast, where property prices plummeted during the global financial crisis, Chinese buyers topped the list of foreign buyers by snapping up $196m worth of property during 2013-14 — 5.9 per cent more than 2012-13.

Americans were the most active foreign investors in Brisbane, spending $244m last financial year — up 60 per cent in 12 months.

But Chinese buyers almost doubled their expenditure in Brisbane, to $185m. Singaporean investors bought property worth $97m and Malaysians spent $32m.

In the tourist city of Cairns, Chinese investment nearly halved to $4.5m but Singaporean investment rocketed from just $890,000 in 2012-13 to $11.5m during 2013-14.

The Asian investment surge is detailed in the latest annual report of Queensland’s Foreign Ownership of Land Register Act, which reveals Chinese investment was too low to show up in the ranking of the six top investors at the start of the financial crisis in 2008-09.

Within a year, however, Chin­ese buyers had spent $150m on Queensland property, ranking third behind Korea and Singapore.

China’s expenditure of $463m in 2013-14 was 43 per cent higher than the 2012-13 result, which had been inflated by the sale of the nation­’s biggest irrigator, Cubbie Station, to a Chinese consortium for $240m in January last year.

The federal parliamentary standing committee on economics is investigating whether foreign investment is fuelling Australia’s property prices.

The head of the committee, Liberal MP Kelly O’Dwyer, has flagged imposing an application fee for offshore buyers to finance a Treasury crackdown on illegal purchases.

She has criticised the Foreign Investment Review Board for failing to enforce its restrictions on foreign buyers, who are banned from buying established residential property.

Foreigners are allowed to buy housing off the plan, while temp­orary migrants, such as those on 457 visas and foreign students, can buy an established home as long as they sell it when they leave.

Immigration Department data provided to the parliamentary inquiry reveals that Chinese invest­ors have put tens of millions of dollars into real estate through the “significant investor’’ visa scheme.

It shows that 90 per cent of the scheme’s applicants are Chinese, and 8 per cent have put their money into managed property funds worth $27.5m. The department is considering applications from 610 migrant investors, offering to invest $3 billion.

The significant investor visa waives the points test and English-language requirements for mig­rants who will invest at least $5m in Australia for four years.

They cannot spend the money directly on buying property, but can invest in managed funds or property development companies.

The parliamentary committee was due to report last week, but the inquiry has been extended for another six weeks.

The Parliamentary Secretary to the Treasurer, Steven Ciobo, has declared that planning controls and a shortage of housing — rather than foreign buyers — are to blame for property price rises.

Housing prices in Sydney have soared by nearly 15 per cent in the past year, according to data compiled by RP Data.

Prices jumped 8.5 per cent in Melbourne, 5.1 per cent in Brisbane, 5.5 per cent in Adelaide and 3.6 per cent in Perth.