Business skills: 132 visa closing 1 July 2021; Innovation visa to require at least $1.2 million net assets and $750,000 annual turnover; SIV shake-up coming?
/The Government’s review of Australia’s Business Innovation and Investment program (BIIP) has been published and details of upcoming changes have emerged. Amendments include closing a visa subclass, increasing minimum assets and annual turnover requirements, and removing existing streams for the Subclass 188 - Business Innovation and Investment (Provisional) visa holders.
The Acting Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs announced yesterday changes to Australia’s business skills visas that will come into effect from 1 July 2021.
While the number of business skills visa places have almost doubled for this program year to stimulate economic growth and job creation, changes announced will only affect applications made from the start of the next program year.
Closure of Subclass 132 – Business Talent visa
The first, and perhaps biggest, announcement is the closing of any new applications for the direct-to-permanent Subclass 132 – Business Talent visa from 1 July 2021. The two streams under this subclass, the Significant Business History stream and the Venture Capital Entrepreneur stream, will be abolished. This will avoid the need for the Department of Home Affairs to undertake the 24-month survey of these visa holders with possible cancellation as a result of the primary visa holder not:
Obtaining a substantial ownership interest in an eligible business in Australia, or
Utilising their skills in actively participating at a senior level in the day-to-day management of that business, or
Intending to continue to do either of the above.
By removing this subclass, business owners and those with agreements with an Australian company to receive venture capital funding will be forced to apply for a 188 visa either under the Business Innovation stream or Entrepreneur stream, respectively. To become permanent residents, 188 visa holders must satisfy relevant criteria and apply for a Subclass 888 - Business Innovation and Investment (Permanent) visa, which effectively acts as a check on business activity. For the Entrepreneur stream, the $200,000 funding threshold will be scrapped and in its place the need for the endorsement of a state or territory.
Initial 188 visas will be granted for five years, an extra nine months on existing visa grant duration. The total possible window to undertake the relevant business activity for an 888 visa, however, will be reduced: the Business Innovation stream allowing one extension of two years, and Significant Investor stream allowing two extensions of two years each.
The other stream that will be abolished is the Premium Investor stream, which is unsurprising as the number of applicants and grants are likely to be in the low single digits.
Business Innovation net assets increased to $1.2 million and annual turnover increased to $750,000
For business owners, there will be two major increases for 188 visas under the Business Innovation stream. These are that:
The business and personal assets of the primary applicant, their spouse or de facto partner, or their assets combined, that can be applied to the establishment or conduct of a business in Australia must have a net value of at least AUD 1.2 million. This is an increase from AUD 800,000; and
The primary applicant had an ownership interest in one or more established main businesses that had an annual turnover of at least AUD 750,000 for at least 2 of the previous 4 fiscal years at the time of invitation. The previous turnover amount was AUD 500,000.
One common misconception for the unfamiliar is that simply buying an established business in Australia (or starting one up) is a pathway to a business skills visa. The above two requirements represent minimum asset hurdles and the need for a history of business ownership and management, which many aspiring business owners cannot meet. The other important hurdle is scoring at least 65 points on the business skills points test, which does not look set to change.
There was a Subclass 845 – Established Business in Australia visa, which required business ownership of at least 18 months. This visa was repealed in 2012 when the new BIIP program commenced.
Complying investments for the Significant Investor visa to change?
Lastly, the Significant Investor stream (SIV) may receive a shake-up of its complying investment framework. This is not confirmed as the Minister’s media release only alludes to its possibility. Any changes are due to be announced early next year so stakeholders have sufficient time to adjust.