Review should recommend an expanded significant investor visa program
Monday 10 March 2014
The announcement yesterday by the Government that it intends to conduct a review into Australia’s significant investor visa program is an important opportunity to address key shortcomings in the current regime, according to the Australian Private Equity & Venture Capital Association Limited (AVCAL).
“The significant investor visa program is now an essential component of the policy framework that helps to make Australia an attractive destination for foreign capital from high net worth individuals,” said AVCAL’s Chief Executive, Yasser El-Ansary.
“One of the biggest shortcomings of the current regime is that the list of eligible asset classes does not include intermediated investments through private equity and venture capital funds,” he said. “There is no policy basis to justify excluding these funds from the significant investor visa regime, and so that should be addressed by the Government as part of the wholesale review into the existing rules in this area,” Mr El-Ansary added.
AVCAL has campaigned for some time that the list of eligible asset classes should be expanded, to allow high net worth business migrants to play a more significant role in supporting investment in small and medium sized enterprises across all sectors of the Australian economy.
"Our economy is in the middle of major structural transformation across many industry sectors, and so we need to look at every opportunity to support investment in Australian businesses that can compete in a globalised marketplace. To compete, businesses have to be innovative, and boosting the availability of capital investment is a vital ingredient in backing businesses to develop new technologies and processes,” Mr El-Ansary said.
Many other countries, including the US, Singapore, UK and New Zealand, use similar programs to attract foreign investments. “The global market for capital investment is highly competitive, so as a nation we have to constantly re-evaluate how we can ensure we have the right policy settings to continue to win our fair share of that investment pool,” according to Mr El-Ansary.
The Government has an opportunity as part of this review to send a message to the rest of the world that our economy is ‘open for business’ and that we are taking deliberate steps to attract foreign investment into our businesses to fuel economic growth and job creation for our future."
AVCAL listed the extension of the significant investor visa regime as one of three key policy reforms that the Government should adopt as part of the upcoming 2014-15 Federal Budget, to help drive more foreign investment into Australian businesses (view the submission).
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Author: Adrian O’Shannessy, Director, Greenwoods & Herbert Smith Freehills
Author: Dr Kar Mei Tang, Head of Policy and Research, AVCAL