Continuing from our last issue on188Abusiness innovation and investment migration — see:Many clients invited before and after the policy changes! A closer look at state nomination streams with no mandatory language or education requirements and low investment thresholds in the new financial year! New opportunities and challenges lie ahead,this issue covers the remaining categories
Subclass 188B — Investor stream
Subclass 188C — AUD 5 Million Significant Investor stream
Subclass 188E — Entrepreneur stream
Key Federal Policy Changes for the 2021–22 Financial Year
Change 1: Investment Amount
Subclass 188B visa applicants will be required to increase their investment amount from AUD 1.5 million to AUD 2.5 million, while Subclass 188C Significant Investor visa applicants will continue with their AUD 5 million investment unchanged.
Change 2: Investment Proportions
The total AUD 5 million investment for Subclass 188C remains unchanged, but the allocation proportions have been adjusted: VC/PE venture capital investment increases from 10% to 20%, emerging companies (small-cap) remains at 30%, and the balanced investment component is reduced from 60% to 50%.
Change 3: No Venture Capital Endorsement Required
Subclass 188E has removed the requirement to secure AUD 200,000 in investment from a venture capital firm, reducing the difficulty of the application.
Let’s now examine the Department of Home Affairs’ latest application requirements in detail
Subclass 188B — Investor Migration
Suitable for: share market investors and property investors
Subclass 188C — AUD 5 Million Significant Investor Migration
Suitable for: high-net-worth individuals with sufficient capital but limited time to spend in Australia
Application requirements
1. No education requirement, no English language requirement, no age limit; must hold investable assets of AUD 5 million or more;
2. Invest AUD 5 million in Australian complying investment products, comprising:
– at least 20% (AUD 1 million) in venture growth investments;
– at least 30% (AUD 1.5 million) in emerging company investments;
– up to 50% (AUD 2.5 million) in balanced investments;
Requirements for transition to permanent residency
– hold the Subclass 188C visa for at least 4 years while maintaining the required investment;
– prior to applying for permanent residency, the primary applicant must reside in Australia for at least 40 days per year, or the spouse must reside for at least 180 days per year.
This financial year, the Federal Government has made some adjustments to the Subclass 188C investment requirements
– venture capital and growth-focused private equity funds increased from AUD 500,000 to AUD 1 million
– emerging companies listed on the Australian Securities Exchange (ASX) remains unchanged at AUD 1.5 million
– the balanced investment component reduced from AUD 3 million to AUD 2.5 million
The advantages of Subclass 188C remain unchanged: no age limit, no points test, no education or English language requirements, and the residence obligation requires only 40 days per year in Australia for the primary applicant — just 160 days in total over 4 years.
The following is the latest Subclass 188C visa grant letter for a Newstars client in Beijing:
The question we are asked most often by business owners is exactly how long it takesfrom application to approval, because for busy business owners, time is money.We are pleased to share exclusively the Newstars Subclass 188C client’sdetailed timeline from application to visa grant:
18 December 2020: Queensland state nomination submitted
5 January 2021: state nomination invitation received
27 January 2021: visa application lodged
March 2021: physical documents posted
3 August 2021: investment instruction letter received
4 August 2021: health examination and police check notification received
14 September 2021: investment documentation submitted
15 September 2021: VAC2 received
26 September 2021: VAC2 fees paid
28 September 2021: visa granted
The entire process took just 9 months — and during the pandemic no less! Business owners with the capacity to apply can do so with confidence!
Newstars Sydney Migration Lawyer Tony’s Commentary
For the Subclass 188C visa, one critical step is demonstrating the lawful source ofthe AUD 5 million investment funds,commonlegitimate sources include employment income, investment returns, gifts and inheritancesand other means.
It is worth highlightingthe matter of giftsin particular:
Typically, gifts must occur between immediate family members. Where the funds are gifted from parents to their child, and the applicant is the child,it is still necessary to establish how the parents lawfully acquired those funds.
The Department of Home Affairs has also made clear thatfunds obtained through gambling cannot satisfy the requirements, as gambling is considered a high-risk area for money laundering. Interestingly, however, funds obtained through a lottery win are acceptable to the Department.
Newstars on Change
.org has launched a petition to the Prime Minister and the Minister for Immigration
— over 10,000 signatures!
1. Following New Zealand’s policy lead, grant a one-off amnesty to temporary residents who have been struggling through long waits for migration
2. Restore the skilled migration visa allocation for this financial year to at least its original level of 108,000
SBS has followed up with a report
ABC News will also be featuring a detailed report soon!
We continue to call on everyone to do their part
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(Long-press the QR code below)
Subclass 188E — Entrepreneur stream
Suitable for: those with English proficiency / international students in Australia / entrepreneurs
Application requirements:
1. Applicant must be under 55 years of age
2. The applicant must be engaged in, or intend to carry on, a qualifying business activity in Australia with a genuine intention to continue it. The qualifying business activity must be connected with an innovative concept, commercialising an Australian product or service, or driving the growth of an Australian business.
The following business activitiesare not eligiblefor Subclass 188E
– residential real estate
– labour hire
– purchasing an existing business or franchise in Australia
3. English requirement: IELTS score of 6 in each of the four bands
Unlike other business and investment migration streams, Subclass 188E does impose a strict English language requirement on applicants.
The key challenge is having the business plan accepted by the relevant state government.
Those are the federal requirements. Let’s now look atthe New South Wales Government’sspecific requirements for the submitted business plan and investment:
– the business plan must clearly demonstrate the applicant’s innovative idea and how it will be successfully implemented, how the innovative product or service will be commercialised, how the business will grow, and how New South Wales will benefit.
– the business plan must also clearly show that the applicant already has:
– evidence that the concept has been validated for practical application (e.g. customer interviews, surveys, etc.)
– potential business clients (B2B) or a consumer market channel (B2C)
– a scalable solution deployable across multiple clients
– intellectual property or commercialisation rights
Investment requirements
Under the previous policy, applicants were required to have endorsement from a venture capital firm or the Australian Federal Government, along with a commitment to invest AUD 200,000 (which was one of the more challenging requirements for Subclass 188E). The new policy has removed the AUD 200,000 investment requirement, replacing it with a requirement for applicants to demonstrate that they have sufficient funding from approved organisations to carry out their innovation project.
Approved organisations include:
– the Federal Government
– the New South Wales State Government
– publicly funded research or innovation organisations
– higher education institutions
– investors registered as an Australian Venture Capital Limited Partnership (AFOF) or Early Stage Venture Capital Limited Partnership (ESVCLP)
Compared to the New South Wales Subclass 188E, which is difficult to access,South Australia’sSubclass 188E still offers genuine application opportunities, and here are the specific requirements for South Australia:
1. Must meet the Federal Department of Home Affairs requirements;
2. Language score must achieve 6 in each of the four IELTS bands;
3. Must intend to reside in South Australia;
4. Must intend to establish a company headquartered in South Australia with strong potential to meet the Department of Home Affairs’ Subclass 888 visa criteria within 5 years, including achievement of the relevant success factors.
5. Must intend to establish a start-up with potential for sustainable high growth and future capacity to employ South Australians.
6. Must obtain support from a designated business body that has assessed and approved your entrepreneurial activity — specific bodies include:
Stone& Chalk
New Venture Institute(NVI)
Moonshots
ThincLab
The Innovation & Collaboration Centre(ICC)
7. Where the business operates in one of South Australia’s nine priority industry sectors, applications will receive priority processing — the nine sectors are:
Stone& Chalk
New Venture Institute(NVI)
Moonshots
ThincLab
The Innovation & Collaboration Centre(ICC)
Where the business operates in one of South Australia’s nine priority industry sectors, applications will receive priority processing — the nine sectors are:
Creative Industries
Defence
Energy and Mining
Food, Wine and Agribusiness
Health and Medical
Advanced Technology
International Education
Space Industry
Tourism
8. Applicants aged 55 or over must demonstrate that the proposed entrepreneurial activity will deliver particular economic benefit to South Australia.
Currently, South Australia does not require investment from a third-party organisation — only a letter of support is needed to apply. As the policy has just been announced and applicant numbers are still low,this stream is still in its prime window, so interested applicants should act promptly.
Newstars has a team of experienced investment migration lawyers, registered agents, and consultants to help you plan your migration pathway and avoid common pitfalls.
We hope that our expertise can help business owners in Australia and overseas successfully obtain permanent residency and begin a new life in Australia.
Contact our professional consultants for an assessment
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