Since the international border closed due to the pandemic, almost 15,000 investment-based visas have been granted under Australia’s 188 visa scheme. The scheme allows individuals to invest in the country, providing a way to enter and remain in Australia. The Australian government defends the scheme as a crucial way to attract investment in the country.
The Department of Home Affairs has released figures showing that it granted 10,210 of the 188 provisional visas and 4,396 of the 888 permanent visas between March 21, 2020 and June 30, 2021. These numbers show a significant increase since the department reported that it had granted only 485 business innovation and investment visas between March and September 2020. Additionally, over 3,500 people with a business innovation and investment visa have entered Australia during that period, including 2,904 provisional visa holders and 524 permanent visa holders.
There are several ways to qualify for a 188 visa. Applicants under the business innovation stream must either buy or start a business and have $1.25 million in total net business or personal assets. Meanwhile, those under the investor stream must be nominated by a state or territory agency and spend $2.5 million on qualifying investments. This amount increased from $1.5 million on July 1, 2021, and at least $500,000 must be in venture capital or private equity, with the rest being in managed funds. The significant investor stream requires an investment of $5 million, with at least $1 million in venture capital or private equity.
The Australian government has recently reformed the 188 visa program, reducing the number of available streams and tightening the criteria. The changes, effective from July 1, 2021, focus the program on higher-value investors, business owners, and entrepreneurs, and improve the quality of the investments and applicants. The Home Affairs spokesperson said, “From 2012 until early May this year, the program had attracted more than $15.9 billion into the Australian economy.”
The Productivity Commission raised concerns in 2016 that the 188 visas were a “pathway for investing ‘dirty money’ in Australia.” However, a spokesperson for the Department of Home Affairs dismissed this as a genuine concern, stating that there are integrity measures in place to prevent economic fugitives from using the program for money laundering purposes.
It is worth noting that Grattan has previously recommended abolishing the 188 visa stream because it is not an effective way to promote innovation or investment in Australia. Henry Sherrell, a Grattan fellow, stated that “The income of people using the business stream was about $20,000 a year compared with $60,000 for a skilled visa worker, and they mostly started businesses in retail or hospitality rather than innovative industries.”
The former deputy secretary of the Department of Immigration, Abul Rizvi, said the investor visa benefits the applicant more than Australia, as “they get their money back at the end of the investment period but they get permanent residence in Australia, which means they get all the benefits of being able to park their family in Australia while they continue their business in another country.” Despite this, Sterling Migration would like to point out that Mr. Rizvi’s comments are not entirely accurate.
Andrew Giles, the Labor spokesman assisting immigration and citizenship, claimed that the investor visa program benefited wealthy businesspeople and foreign investors at the expense of stranded Australians. However, Mr. Giles’ comments are more politically motivated and not entirely accurate.
The changes are part of the Australian government’s plan to attract high-value investors, business owners and entrepreneurs to the country. According to the spokesperson, the changes aim to improve the quality of investments and applicants, while also sharpening the focus of the program on higher-value investors.
The 188 visa program has attracted over $15.9 billion into the Australian economy since 2012. The government has doubled the number of places available in the annual migration program. However, it has been trimmed in the current financial year to reflect the tightened criteria.
Despite concerns raised by the Productivity Commission in 2016 that the 188 visas could be used as a pathway for investing “dirty money” in Australia, the Department of Home Affairs has dismissed this as a genuine concern. The department has stated that integrity measures are in place to ensure the program is not targeted by economic fugitives or used for money laundering.
To qualify for a 188 visa, there are several options available. Under the business innovation stream, applicants must buy or start a business and also have $1.25 million in total net business or personal assets. Under the investor stream, applicants must be nominated by a state or territory agency and spend $2.5 million on qualifying investments, with at least $500,000 in venture capital or private equity. The significant investor stream requires an investment of $5 million, with at least $1 million in venture capital or private equity.
In conclusion, the 188 visa program has granted nearly 15,000 investment-based visas since the start of the pandemic. The program allows individuals to invest in the Australian economy and obtain a pathway to residency or citizenship. While concerns have been raised about the program, the Australian government has defended it as an important way to attract investment into the country.
With the recent changes to the program, it has become more focused on high-value investors and entrepreneurs, with tightened criteria to ensure the quality of investments and applicants. As a result, Australia continues to be a popular destination for investors around the world.
Each year, the Australian federal and state governments review the 188 visa programme to ensure it delivers the best possible outcomes for Australia. Where deemed necessary changes are introduced without advanced notice. State governments open and close the investor visa stream within their respective jurisdictions as deem necessary to meet the local economic objectives.
That said, once an investor secures an invitation to emigrate (State Nomination), any future changes to the emigration policy will not affect their case.