As a solicitor and registered migration agent, I have been approached by many high net worth clients for my advice on their business migration pathway. When I talk about a “high net worth” client, I mean the individuals who are more than capable of investing $5million into Complying Investments for a Significant Investor Visa (‘SIV’). Given their successful businesses and investment histories, most high net worth clients also meet the criteria for the Subclass 132 Business Talent Significant Business History Stream, which is more commonly known as a “132A” amongst the migration industry.
Around two years ago, when the NSW state government was still strict with nominating a 132A, it took the NSW government almost 9 months to approve a 132A nomination application for one of my clients. Now, the NSW State Government has been speeding up the assessment process. I recently lodged a decision-ready 132A nomination application with the NSW State Government, which was approved within one week. The current relaxed assessment process has caught the attention of many high net worth clients. Whilst the SIV is a temporary business visa which provides the SIV visa holder a pathway to apply for a permanent residency in 4 years’ time under Subclass 888. It is obvious that the 132A offers them an immediate permanent residency, but the 132A also has some downsides.
After obtaining a permanent residency through a 132A visa, the 132 visa holders will be subject to a 3-year monitoring period. During this monitoring process, the Department of Immigration and Border Protection (‘DIBP’) will look at whether 132 visa holders have used their skills to establish and run a business in Australia. In particular, under Section 134(1) of the Migration Act 1958 (Cth), the DIBP has the power to cancel a 132 visa if the visa holder:
- has not obtained a substantial ownership interest in an eligible business in Australia; or
- is not utilising their skills in actively participating at a senior level in the day-to-day management of that business; or
- does not intend to continue to hold a substantial ownership interest in, and utilise their skills in actively participating at a senior level in the day-to-day management of, an eligible business in Australia.
As 132 visa holders are required to submit their business plans prior to obtaining a nomination from the respective state/territory governments, the DIBP may also consult with the nominating state/territory governments as to whether the 132 visa should be cancelled.
Although it is true that the 132 visa does not dictate that the visa holder must be present in Australia to run the business, any lengthy absence from Australia may prompt the DIBP to form a view that the visa holder has not been utilising their skills in actively participating at a senior level in the day-to-day management of the business. Further, if there is insufficient supporting documentation to demonstrate the visa holder’s management and involvement in the business, the 132 visa may be cancelled by the DIBP.
To answer the initial question about the choice between the SIV and 132A, we need to ask the applicant whether they really need or intend to manage the business in Australia. As most high net worth clients need to manage their businesses in their home country, they will be unable to be in Australia and a SIV visa will be more suitable.
After I explain the differences between a SIV and 132A to my clients, they often reply by saying: “the SIV is a temporary visa. I can get Permanent Residency straight away under 132. I am only required to invest $1.5million into run a business. My friends will help me out whilst I am in China. So I still want to do 132.” And, I would subsequently respond by asking them:
- How well do you know the business and legal environment in Australia?
- Do you really understand the business you are going to do and what it is?
- Can you trust your friends, in terms of their management skills, business acumen, and honesty/reliability?
- How much are you willing to lose in this business?
- Are you an entrepreneur with a genuine commitment to establish a new business in Australia?
I acknowledge that the complying investment requirement for a SIV being $5million is much larger than the amount required for a 132A. However, although you may be uncomfortable with parting with your $5million and giving it to fund managers with whom you are not acquainted, at least they are licensed financial advisors and must invest your money in a way as regulated by the Australian Securities and Investments Commission (ASIC), whilst your friends are most likely not.
