On 19 May 2021 the Minister for Immigration, Citizenship Services and Multicultural Affairs announced changes to Australia’s Business Innovation and Investment Program (BIIP). These changes were presented as a reform to the BIIP following the 2020 review. The changes came into effect on 1 July 2021 and apply to all visa applications and expressions of interest submitted after this date.
The changes include increases in thresholds potentially making it more difficult for foreign business owners and investors to utilise the BIIP, but also include a potential boost for entrepreneurs.
The Minister presented the rationale for the changes in terms of ‘getting a better deal for Australia’.
What are the main changes?
The Program remains a two-stage process, beginning with a subclass 188 provisional or temporary visa to be held for at least 3 years (maximum 5 years with the potential for a 2-year extension or a 2 + 2 for the Significant Investor stream) until the visa holder is eligible for the subclass 888 permanent visa.
The existing 9 visa streams have been rationalised to 4 visa streams: Business Innovation, Investor, Significant Investor and Entrepreneur.
The major changes for each visa stream are outlined below.
Business Innovation Visa Stream
To ensure the program is attracting migrants with proven business skills, applicants will now be required to hold overseas business assets of AUD 1.25m (up from AUD 800,000) and have an annual turnover of AUD 750,000 (up from AUD 500,000) to prove their business acumen.
Visa applicants must be under 55 years of age.
The requirement to have a minimum of 65 points from the points table for this visa stream remains. Points are awarded for age, English language ability, educational qualifications, financial assets, business turnover, business experience and innovation.
The Business Innovation Visa Stream continues to require nomination from the State or Territory where the applicant intends to establish the Australian business. States and Territories are yet to open their programs or announce their criteria for nomination.
Investor Visa Stream
This stream is for business owners or persons holding eligible investments, with at least 3 years of experience and a successful business/investment record. Post 1 July 2021 applicants under this stream must invest AUD 2.5m in ‘complying significant investments’ in the following proportions:
- at least AUD 500,000 in venture capital and private equity funds which invest in start-ups and small private companies.
- at least AUD 750,000 in approved managed funds. The managed funds must invest in emerging companies listed on the Australian Stock Exchange.
- a ‘balancing investment’ of at least AUD 1.25m in managed funds.
This is a significant change to this stream, which previously required a designated investment of AUD 1.5m in Government bonds.
This stream also has an age requirement (under 55), a minimum of 65 points, and nomination from a State or Territory.
Significant Investor Visa Stream
For applicants after 1 July 2021, the total investment amount under the Significant Investor Visa (SIV) stream remains AUD 5m. However, the mix of investments under the ‘Complying Significant Investments’ framework has changed. The AUD 5m must now be invested in the following proportions:
- AUD 1m in venture capital and private equity funds which invest in start-ups and small private companies. This is an increase from the previous AUD 500,000.
- AUD 1.5m in approved managed funds investing in emerging companies listed on the Australian Stock Exchange.
- a ‘balancing investment’ of AUD 2.5m in managed funds. This is a decrease from the previous AUD 3m.
The 1 July 2021 changes also address the use of fund of funds, emerging companies and derivatives, and the date for investment into venture capital and private equity investment funds (reduced from within 12 months to 6 months from the date of grant).
The SIV stream remains free of any age, English language or business/investor background requirements. State or Territory nomination remains a requirement.
Entrepreneur Visa Stream
The Entrepreneur Visa stream has suffered from a very low success rate since first introduced. From 1 July 2018 to 31 January 2021 only 62 temporary visas were granted under this stream, and there were nil permanent visa grants reported.
Pre 1 July 2021 this stream required a funding agreement of AUD 200,000 with a government agency or a registered Venture Capital Limited Partnership or Early Stage Venture Capital Limited Partnership. From 1 July 2021 this requirement has been scrapped and replaced with State/Territory endorsement.
The Entrepreneur Visa stream continues to be available for only persons under 55 years of age and the visa applicant must have a genuine intention to undertake a ‘complying entrepreneur activity’ in Australia.
States and Territories are yet to announce their requirements to provide endorsement. If the South Australian pilot is anything to go by, States/Territories may give priority to innovative ideas and activity in certain sectors.
Neil Arora is an Australian Migration Lawyer and Consulting Principal of Keypoint Law. Neil specialises in business, investment and corporate migration. Neil is available for a complementary initial consultation to discuss these changes and opportunities for you and/or your business.
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please also note that the law may have changed since the date of this article.