Proposed Changes to SIV

There has been a proposal released in February 2015 stating the proposed changes to the significant investment visa.

According to The Australian Trade Commission (Austrade) the proposed changes to the SIV structure which are designed to encourage applicants to invest into more active areas of the economy which include small emerging firms and venture capital.

This proposed framework for the complying investments will restrict the ability to invest into residential real estate through managed funds including residential development. It will also require higher risk investments such as; one million must be invested into early stage venture capital funds approved by the government, and one and a half million must be invested into managed funds that invest in small companies listed on the Australian stock exchange. Due to this, a minimum of fifty percent of an SIV applicant’s funds must be invested in higher risk investments. These proposed changes would take effect from the 1st July 2015.

From the 1st of July 2015, the following managed fund investment options are not expected to be available;

  • – Australian agribusiness
  • – Bonds issued by the Government
  • – Cash held by Australian deposit taking institutions (such as banks)
  • –  Loans secured by mortgages over real estate
  • – Term deposits issued by Australian financial institutions (such as banks)

Any SIV applicants or prospective applicants should seek advice to consider the impact of these proposed changes. There have not been any announcements yet made on transitional arrangements for applicants processed between now and the 30th of June 2015. However, it is expected that any investments made and for which SIVs were granted prior to the 1st of July 2015 remain compliant if they were compliant before this time.

Also new application for SIV applicant will be put on pause from the 24th of April 2015 until July after proposed changes have been finalises.

Source: Austrade