Australia consistently remains one of the best countries to live in, and ranks highly for its healthcare, education, lifestyle, wealth and security. Sable International’s Sam Hopwood looks at the visas that allow you to move to Australia with your family by making an investment or starting a business in Australia. Watch the video or read the transcript below.
Video topic navigation
- Why move to Australia: 09:27
- Things to consider before you move: 13.31
- About Australian business and investment visas: 15:48
- The Business and Innovation visa 188a: 20:18
- The Business and Innovation visa 188a – permanent visa: 23:51
- Investor visa 188b: 24:59
- Significant Investor visa (SIV): 30:41
- Australia’s response to Covid-19: 37:09
- The Australian government is looking to attract more 188 visa migrants: 44:10
- Q&A: Can you make an investment in a residential property for the SIV? 48:31
- Q&A: Do I get all my money back from my investment? 49:52
- Q&A: Can one continue to run their business in their home country? 52:07
- How the Australian government measures applicants: 53:28
Transcript topic navigation
(This transcript has been lightly edited for clarity)
- Why move to Australia
- Things to consider before you move
- About Australian business and investment visas
- The Business and Innovation visa 188A
- The Business and Innovation visa 188a – permanent visa
- Investor visa 188B
- Significant Investor visa (SIV)
- Australia’s response to Covid-19
- The Australian government is looking to attract more 188 visa migrants
- Q&A: Can you make an investment in a residential property for the SIV?
- Q&A: Do I get all my money back from my investment?
- Q&A: Can one continue to run their business in their home country?
- How the Australian government measures applicants
Andrew Rissik: Sam, welcome and thanks for staying up late. I know it's probably dark there already and probably almost bedtime. Thanks very much for joining us at a time that suits our clients, probably a bit better than you. Tell us a little bit about yourself, and then you're in charge for the rest of the way until the Q&A.
Sam Hopwood: Thank you, Andy. It is a little bit past my bedtime. It's just gone 10 o'clock, so I'm normally wrapped up in bed at this time of night reading a good book. I'm very happy to be here tonight to present this webinar and to try and educate our clients and prospective clients on all things Australian.
Personally, I have been with the business for, I lose count, I think this is my 16th or 17th year. I started in the UK, back in 2015 in London. I was travelling the UK as most Australians do in their younger years. I'm lucky enough to have a British and Australian passport and was caught up in the UK for five or six years. This particular employer that I'm still with now is the first employer I had in London and I just happened to strike upon a very good relationship with who turned out to be a very good employer and quickly found myself in a role in a UK immigration advisory role. I learnt the ropes and sort of kicked off from there. Now I'm a registered migration agent here in Australia. I've been a registered agent for eight years now. I've been back home here in Australia for just over 10 years now.
I run the Melbourne office. Personally, I'm not from Melbourne, I'm from north of the border. I'm a New South Welshman born and bred in Sydney. My family and friends still hail from Sydney.
I'm a sports fan. Fortunately, Melbourne has everything sports when it comes to Australia. We've got Formula One, we've got tennis, we've got the MCG, we've got the Boxing Day test. AFL is huge here in Australia. So, for those of you who have been to Melbourne before, you'll probably appreciate what I'm talking about, because everyone here is sports mad.
We're one of the safest countries in the world.
SH: Thanks, Andy. Appreciate it. Before I tell you why you should choose Australia, just to let you know that I've travelled to South Africa every couple of years, sometimes three times a year for the past 15 years. So, I know a lot about South Africa. I know a lot about South Africans. I've travelled all over South Africa. I have a lot of good friends who are South African. So, I understand your culture. I understand your humour. I understand what you're all about. I think I understand why Australia makes a lot of sense as to why you would enjoy migrating to Australia as opposed to other countries around the world.
Why move to Australia
SH: I'm going to give you some statistics here. According to the United Nations, Australia is the second-best country in the world to live in. According to me, it's the best country to live in, but that's up for debate. The UN measures 197 different countries over a bunch of different metrics. Those are typical metrics that you would expect to see in any report or magazine that was talking about migration and they are quite easy to identify: education, health, lifestyle, security, wealth, etc. We rank very highly across the world when it comes to these metrics. We've got a great education system; we've got a great healthcare system. Our lifestyle, you can see by the picture there on the left-hand-side is the Gold Coast.
We have this outdoors lifestyle that we embrace. Security, we're one of the safest countries in the world. I have travelled South Africa with some friends and family in the past and have had to educate them on how South Africa at times isn't so safe, and how you have to protect yourself here and there.
We're a first world country and we're quite a wealthy country, we have a lot of resources. We've done quite well on the global scale whilst selling those resources.
Those are the statistics that you hear and read in tables and in books. But mostly, though, you choose Australia because it's got all the good stuff that South Africa has got. I know South Africa has got all this good stuff. You've got a great education; you've got a great lifestyle. You've got fantastic wineries, and you've got beaches, and you've got things that I love going to when I’m in South Africa as well. So, we've got all the good stuff that you've got, but we haven't got as much as the bad stuff. So, we don't have the crime. We don't have the stories that you have about home invasions and having your car stolen. Yes, we do have crime, but we just don't have it on the same scale that you do. Most importantly, we speak the same language as South Africans. And that's not Zulu, we don't speak Zulu. When I talk about language, I don't talk about the English language, although we do share that. That is important, and it does make life easy. But by language, I mean, the language of culture, and that is you braai and we barbecue, we play rugby (not as good as you), we play cricket, although we probably shouldn't talk about it. Let's not talk about what happened in Cape Town.
We enjoy the outdoors, our culture, business practices, tax systems, our schooling and our general way of life. They're similar to you in South Africa. This is really important when you're transitioning and choosing a country to migrate to – why not choose a country which is similar to you in a lot of respects? So, when you get here, you don't have to re-learn a new language and your assimilation is easier. I do talk to people who come to Australia or have migrated to other countries and do struggle to actually find their feet in a new country. It's not entirely easy. But I think coming to Australia, where we have a similar culture will make it easier. I think I've sold Australia enough there and we can move on to some other topics.
We're a big country but technology and internal domestic flights have made us small enough that it doesn't really matter where you are.
We're a big country. I live down here in Melbourne and as I said, my family lives in Sydney, that's roughly 1,000 kilometres away. Perth's on the other side of the country, it's a good five-hour flight away. But what Covid's taught us if nothing else is that the world is actually a small place, and the country is a small place and technology works to your benefit.
Things to consider before you move
SH: I would ask each and every one of you, if you think you're migrating to Australia to a certain place because you have friends there or you have family there, just consider for a moment that you might not be able to migrate to that particular city because of visa regulations, for example, but then you might be able to migrate to a different city. That's a good thing that you can still get into Australia and maybe not your first choice as far as state or city is concerned. But travelling within Australia is very easy. We have cheap internal flights. I can fly from Melbourne to the Gold Coast, sometimes it's on special for 120 bucks, which in our world is not a lot of money. So, we're a big country but technology and internal domestic flights have made us small enough that it doesn't really matter where you are.
I'm in Melbourne but I do business with people in Sydney, Brisbane and in Perth. You're not limited by your location and your offering just because you happen to be physically located in a particular place in Australia. We have a lot of clients who migrate from Johannesburg, and they’ve got a business in Joburg and they want to go to Perth specifically because Perth's only six hours ahead of Joburg. So, whilst it's sort of three o'clock in the afternoon, and it's eight o'clock in your morning, and the crossover is easy, you can manage two businesses in two different countries. So, there are benefits of being on the east coast and on the west coast. But, again, I would just try and stress to you, don't think that you have to be in a particular location because of friends or family. You can travel around and see friends and family. Don't limit yourself by location is my recommendation. You don't always get what you want, immediately, but you might get it at a later date. Once I’ve explained the visa subclasses in some more detail, they'll make more sense. Let's talk about the visas.
About Australian business and investment visas
SH:Today, I'm only talking about three different visa types. They are broadly referred to as the Australian business and investment visas. They fall under subclass 188. Every Australian visa has a numerical value attached to it. We refer to it as a subclass. In this case, we're talking about 188 A's, B's and C's. I'm talking today about criteria and regulations, which will be effective as of 1 July. So, a bit of a disclaimer, if you were to read the law today and the regulations and some of the websites and information which is out there, it may not reflect what I'm talking about, because I'm talking about changes which were announced in December last year, which will become effective on first of July this year. I don't think there's any point in me telling you about what's the law today, because it's changing in less than two months. So, if you invest in two months' time, you won't have an opportunity to submit a visa application anyway. So, we might as well talk about what's coming. We used to have nine different visas within this stream, we only have four now, and I specifically talk about three of those streams.
Each of the states have their own individual criteria as to what type of migrants they're trying to attract.
There are some common features to each of these visas and I'm just going to read through these top points. All of these visas are temporary, and they're granted for a period of five years, or they will be after the first of July. They can be converted to permanent residence after three years. So, you'll have a pathway to permanent residency after three years. These are all state nominated visas, meaning that you must approach one of the state governments, you must gain their support. The state is said to “nominate you” in order for you to be eligible to apply for a visa. You must be invited to apply for a visa before you can go ahead and submit a visa application. You then make a commitment to live in that state until you are granted your permanent residency. So, the state is making a commitment to give you a nomination and you are making a commitment and you are obliged, then to live and work and create, do business and you know, settle in that particular state. The state governments have a limited quota of visas, so the state governments are quite demanding in their requirements when assessing you, the potential migrant.
It's important for everyone to understand that the states are in competition with each other. There are seven states and territories here in Australia and the federal government handed out a certain number of visas to each of the states. They say, “Well, here's your allocation, and here's your allocation and that's what you get.” Some states get more than others, depending on their size and what their demand usually is. Some states are trying to attract more migrants to their state than others are. So, each of the states have their own individual criteria as to what type of migrants they're trying to attract. What type of migrants with what particular types of businesses they're trying to attract.
So just because you want to go to New South Wales, for example, doesn't mean that New South Wales might want you. So, you might not be the type of migrant that New South Wales wants. Your type of business might not be what New South Wales is looking for. Because New South Wales has so many applicants, they have the opportunity to pick and choose through those applicants and then potentially, you might not get nominated by New South Wales. However, perhaps you might get nominated by South Australia. So, this is what I'm talking about. We're a big country, but you need to think about different states as different opportunities. If you can get into South Australia and be nominated by them, go and live in Adelaide, put your business there or invest there in Adelaide and you can still do business across the rest of Australia.
These are the three types of visas that we're going to talk about today. They are the Business and Innovation visa (subclass 188A), the Investor visa (188B), and the Significant Investor visa (188C).
The Business and Innovation visa 188A
SH: The Business and Innovation visa 188A. This visa is predominantly for people who are interested in coming to Australia and actively managing a business. You need to be involved in managing that business. You can buy into a new business; you can bring your existing business or you can start a business from scratch. But you need to be coming to Australia with the intent of working actively within a business.
The general criteria are that you must be under the age of 55, however, there is an exception to the rule. You can be over the age of 55 if you can demonstrate that your business and you as a person and your wealth will bring significant economic advantage to the state. So, if your business is considerably large, or you have a new patent, or you have special exports that are going to bring Australia a large income, then the state government has the ability to waive the criteria of the age if they see that you're going to bring significant economic advantage to the state.
You need to demonstrate that you've had an overall successful career in business. You need to demonstrate that in at least two of the past four years, you've had an ownership stake in a business with an annual turnover of at least AUD 750,000. As I said, the criteria have changed recently, so this is not the criteria that you'll find on the website at the moment. At the moment, the website talks about 500,000. So, for those of you who've already done your research, and these numbers don't marry up, that's why because these numbers will change as of the first of July.
Your net assets must be greater than AUD 1.25 million. They can be business assets, they can be your personal assets, they can be assets of yours and your wife or your de facto partner. You must have an intention to actively manage the business in Australia. When you apply to the state government, you need to talk about what your intention is, what type of business you intend to run. It doesn't have to be the same business that you currently run in South Africa, but it has to play to your skills, it has to make sense. You have to provide them with a business plan of some depth that talks about what your intention is when you get to Australia. You need to have done your research and either found a gap in the market as to how your business in South Africa will plug into the Australian market, or you need to find a similar business or a business that you can apply your skills to in Australia that it is plausible that you could come to Australia and actively manage with reasonable success. The state government needs to see from your application that it’s likely that you will succeed in what you're saying that you'll do. That's the criteria to get into Australia on the temporary visa.
From one July, it'll be granted for a period of five years, then you come to Australia on that visa. Once you get in the door, you then need to set about going to work in a business that you own and setting yourself up for success, so that somewhere down the track within that five-year period, you can then apply for the permanent visa.
The Business and Innovation visa 188a – permanent visa
SH: The permanent visa has criteria: You need to have an ownership stake in an Australian business with a turnover of at least AUD 300,000, which is not huge here in Australia. You need to have net assets of at least AUD 600,000. Your business needs to employ at least two full-time staff. Your staff cannot be family members, so you can't employ your daughter and your son and say well, that's the business taken care of. They need to be Australian citizens or permanent residents who are not related to you. You need to physically have lived here in Australia for at least 12 months. You need to be able to pass medical and police checks.
It's important that when you are applying for this visa, you understand the concept of the temporary visa and then the concept and the criteria of the permanent visa and the transition which needs to take place so that you set yourself up for a strategic move to Australia into a business that's then going to allow you to hit these numbers so that you can then become a permanent resident further down the track.
You need to demonstrate an overall successful career in business or investments.
Investor visa 188B
SH: Moving on to the 188B, referred to as the Investor visa. So, this particular visa is for people who do not want the pressure of running a business and are happy to make an investment in government bonds. You can invest in a business of your own at the same time, but you don't have those benchmarks of turnover in an Australian business in order to achieve permanent residency. We'll run through the criteria for this visa to initially get into Australia.
You've got to be under the age of 55, but again, there is an exemption if you can demonstrate exceptional economic benefit to the state. Some state governments like Western Australia, for example, say that if you bring more money, if you're willing to double your investment, for example, they will waive the age criteria. All states have different parameters when it comes to waiving age criteria. Again, you need to demonstrate an overall successful career in business or investments.
In at least one of the past five years, you must have managed a business which you had a 10% stake in, or you must have managed investments of a value of at least AUD 1.5 million. Just on the management of those investments, because some of you might have portfolios that are managed by a broker, which is fine and within the rules and very common. But you need to demonstrate that you are responsible for the decision-making process in the management of those investments, that you measure the rate of return on those investments and the decisions you make are based on information that you have of the market. Essentially, what the Australian government is saying is, they want to attract people who are educated and savvy on investing and not people who are fortunate to have wealth and have someone else manage it. People who are actively involved in the day-to-day management of those investments and of their portfolio and they're up to date on what the market does. You'll need to demonstrate that you're that person - that you are actively involved and that you are educated on your portfolio.
In addition, you need to demonstrate that your net assets are greater than AUD 2.25 million. Again, they can be yours, or yours and your significant other (your spouse or de facto partner). To get this visa, you've got to invest AUD 1.5 million in state government bonds and it’s got to be there for four years. State government bonds are at this point in time, a very static investment, they're not returning a great deal. The return on investment is kind of like the cash rate at the bank at the moment or even less in some circumstances. You're basically giving your capital to the state government for four years and at the end of that four-year period, they give it back, but you're not going to get a lot of return on that investment.
It's worth noting that there is a paper that has been published recently where the government has called for recommendations on how the AUD 1.5 million investment could be used to better effect. It suggested that they might change this AUD 1.5 million from state government bonds into a more commercial focused investment where it might be put into the Australian Stock Exchange and split up similarly to how the SIV is split up. We'll get onto the SIV in a moment.
Again, you've got to pass medical and police checks. Once you make the investment in Australia, your visa will be granted and then you need to migrate to Australia and spend a certain amount of time here. Once your funds are invested, you can then concentrate on a permanent visa. On the right-hand side, I have the dot points for the criteria for the permanent visa.
Essentially, you need to hold this investment for four years. The funds will be returned to you at the end of the four years, but you're not going to become a permanent resident unless you hold that investment for the full four-year period. In those four years, you've got to be physically located here in Australia for at least two of those years. Again, you need to pass medical and police checks.
In comparison to the 188A, the criteria for achieving permanent residency is a lot easier. There aren’t those benchmarks that we talked about for running a business. It's a very static investment, you give it to the state government, you say, basically, in four years, I'll get my money back and I'll get permanent residency. I don't have those concerns and those benchmarks which I need to hit within a business. If I want to, I can sit on a beach and put my feet up and enjoy myself or I might want to concentrate on doing other things, investing in another business or running another business. But I don't have those concerns about the benchmarks which I need to hit within that particular business. So that's the 188B.
Obviously, there's a high risk to this part of the investment, but there's a high rate of return potentially, when it goes right.
Significant Investor visa (SIV)
SH: Let's move on to the Significant Investor visa. So, this is what they refer to as the SIV. The criteria for this visa is more simple than the last. Essentially, you need to invest AUD 5 million. Let's run through the criteria quickly: There's no age limit, so they don't mind what age you are as long as you and your spouse or your de facto partner have assets for at least AUD 5 million, you can demonstrate that those assets are legally acquired, you can demonstrate that they're unencumbered, you don't have mortgages that are greater than and you can use those funds for making your compliant investment in Australia. Chances are, you have a good chance to obtain the SIV. It's worth noting that this particular visa can be sponsored and nominated by a state government. However, it can also be nominated by a federal government body known as Austrade. If you're using an Austrade, then you're entitled to this visa without having to make a commitment to any particular state in Australia. This is a good thing, it means you don't have to commit to where you want to live. In the long term, you can make that decision when you get here.
The dot points in the middle of the presentation here are all about the complying investment. This is where I get most questions from clients in regard to this particular type of visa, because everyone wants to know, where’s my five million bucks going to go? It needs to go into what's referred to as a complying investment, so you don't choose where it goes. To a large extent, it's already chosen for you. This particular investment strategy has been designed by the Australian government.
So, at least 500,000 or 10% of your total investment is invested into venture capital funds, or private equity funds that invest in start-ups and small private companies in Australia. What the Australian government is trying to do here is they're trying to plug cash into small businesses who are in the start-up phase in Australia, who private equity have identified as businesses with a good runway potentially for success, but need cash to get them off the ground. From the brokers who I speak to in the market who are responsible for making the investment, they told me that this part of the complying investment is actually the part that returns the most money. As far as a rate of return is concerned, obviously, there's a high risk to this part of the investment, but there's a high rate of return potentially when it goes right.
The second part of the compliance investment is at least AUS 1.5 million or 30% of your total investment is invested in eligible managed funds – All listed investment companies that invest in emerging companies in Australia, again listed on the ASX, so not as risky. But again, investing in Australian companies is what the Australian government's going to do with your money. They're trying to plug more money into the Australian economy and into growing the economy and growing new business here in Australia. The balance of your investment, the remaining AUD 3 million, goes into more secure investments, more reliable investments. They could be securities, bonds, property, cash and derivatives. There's a number of different types of investments that the balance of your investment will go into. When you're making your complying investment in this particular visa category, you will use a broker here in Australia who's a specialist in the SIV category, and they will educate you greatly on their particular portfolio, how many times they've made this investment and what the rate of return is. You won't go to a normal broker who just ordinarily invests money for people in ASX. The people who do this particular investment are specifically focused on this visa type. I know a lot about the visa and I know a lot about compliant investments. There've been some horror stories out there from clients who have, unfortunately, made investments that were not complying, and therefore do not qualify for permanent residency at a later date.
The general criteria for permanent residency is that you must hold that complying investment for four years, and that you must have lived in Australia for at least 160 days, across the course of those four years, you must pass medical and police checks as well. It's a more obvious criteria, I guess we could say, there's nothing overly tricky in the criteria. It's basically, have you got the net wealth to invest? Are you willing to hold it for four years? If you're ticking those boxes, then chances are that you'll qualify for the SIV.
We enjoy life here in Australia pretty much without Covid and life’s fairly normal.
Australia’s response to Covid-19
SH: We've been quite fortunate here in Australia, with Covid. We've been fortunate for these reasons that I'm going to talk about now.
We're an island nation, we're a great big island in the middle of the Pacific Ocean and we're here pretty much all on our own. Because of that, we were able to take measures to close our borders to prevent people from coming to Australia and stop the spread of Covid. We did that relatively early, which meant that we didn't have a lot of Covid here and we were able to quarantine and close things down to such an extent that we've virtually eliminated Covid at this point in time. So, we still have a very strict quarantine system. If you do manage to come to Australia for whatever reason, then you'll have to do a mandatory 14-day quarantine in a hotel room when you get here.
Recently, I had a colleague from our Cape Town office travel to Australia, he migrated to Australia on a permanent basis with his family. So, he, his wife and his two kids arrived about two months ago. They now work in the office here with me and Marlon. They had to do two weeks in quarantine with two small children in a hotel room. It wasn't easy. But they say it was worth it. So that's what's waiting for you when you get to Australia is the first 14 days in a hotel quarantine, unfortunately.
There are limited reasons as to why Australian citizens can leave Australia at this point in time, so I can't go on holiday as I normally would in certain parts of the world or travel to certain parts of the world as I would. Essentially, you can only leave Australia if you've got a good reason, if it's for work, or if it's for attending a funeral or seeing a loved one. You've got to have a pretty good reason to get out of Australia. We've limited the number of people who can come to Australia and the visa holders. The foreign citizens who can come to Australia have been limited based on certain skills and visa types. These things that the Australian government has done haven't been popular, not with the Australian public and not with overseas citizens because its greatly disadvantaged people. But what it has done, I guess is it has prevented the spread of Covid here in Australia and now we enjoy life here in Australia pretty much without Covid and life’s fairly normal. In addition to that, our government handed out large subsidies to businesses across Australia, during the pandemic, whilst we were getting over the initial shock of the pandemic, and initial lockdowns. There were large government subsidies handed out so that the economy kept on ticking along. Businesses kept their head above water, and so that we can bounce back out of Covid. Our unemployment rate is back down to 5.6% as compared to 5.1% pre-pandemic. The economy's chugging along pretty well here in Australia, and the federal treasury is pretty happy with how things are going.
Our vaccine programme hasn't gone all that well, we still haven't got that many people vaccinated. The government said we'd have everyone vaccinated by October this year, that's probably not going to happen. It is a bit of an issue because the sooner we get vaccinated, the sooner we can open up our borders and really start seeing other people and trading with other people and getting more skills, but we have got a plan to roll out vaccines across Australia entirely. I think this week, they've started vaccinating those who are between 50 and 60 years of age. So, they're slowly working their way down the age brackets.
We have a massive amount of spending at the moment on infrastructure, so projects like road and rail mining resources, etc. There's a huge amount of government spending going on here in Australia at the moment. It's a good time to be in Australia as far as the economy is concerned, jobs is concerned. If you work in construction, or in mining or in associated industries, then you're probably going to do pretty well at the moment. The price of iron ore on the global scale at the moment is I think at almost an absolute all-time record high. We export a lot of iron ore out of West Australia. China buys a lot of iron ore from us to make steel. This is driving our economy and bringing in a lot of income into Australia, which is good for our overall wealth.
In total, although it's very sad, we only had just over 900 deaths here in Australia for Covid. Of those, almost 800, or just over 800 were here in Victoria, and most of those were in aged care. So, on the world scale, we've navigated our way through Covid very well, and we haven't been impacted all that much. Now we find ourselves in a very Covid-normal manner – we don't wear masks, social distancing is not really a thing. To give you an example, 85,000 people attended a sporting match at the MCG just a kilometre away from where I'm sitting now, on Friday night, last week. That's the new normal for us. We don't have any Covid community transmission here in Australia. So, life is pretty normal as far as Covid is concerned, for the time being, we have had little outbreaks here and there. Someone was said to have Covid in New South Wales the day before yesterday, they're not sure how he contracted it. It must have gotten out of quarantine somehow. So, we're going to have little outbreaks here and there, but it looks for the large part that we're keeping on top of those outbreaks.
The 188 business and investment visas are liked by the Australian government… these visas bring quality migrants to Australia.
The Australian government is looking to attract more 188 visa migrants
SH: Then a little bit more about Covid but how it relates to the visa, which is good news for anyone applying for this particular visa type. The 188 business and investment visas are liked by the Australian government. The Australian government sees these visas as a way to bring quality migrants to Australia. The Australian government wants more people to come to Australia on these particular visas because they see people who apply for these visas are innovative, entrepreneurial, skilled people with some wealth. They want them to come to Australia, and they want to impart those skills and those entrepreneurial habits into Australia and into the Australian economy and it's a good thing for Australia. For these reasons and further to help Australia recover from our Covid slump, the Australian government has taken some steps to boost this particular visa category.
They've doubled the visa category from a quota of just over 7,000 in the year prior to just over 13,000 in this current year. We have our migration planning levels announced on the first of July each year and we expect that they will probably maintain that level or even increase it further. From 1 July this year, they have introduced a new streamlined priority processing system for this particular visa as well, which is great news. It means you can get processed quicker, and get to Australia sooner. They have made all visa holders of the 188 visas exempt from the inward travel bans. So, a lot of other people who have temporary visas can't come to Australia at this point in time. Whereas everyone holding a 188 visa is exempt from the travel bans.
AR: Sam, thanks very much. Ladies and gentlemen, I think you'll agree there’s a lot of information there. At first, it's always very complex, but Sam is a specialist and please reach out to him. Sam, I think you must have explained it really well, because there’s not a lot of questions, but we'll get to that shortly. But just very quickly, on these particular visas, as Sam said, they sort of fairly Covid-friendly. If Australia is a place that you want to go via this route, how would one take the next step? What you do is you get in touch with us, we'll understand your family structure, what you're looking to try and achieve and then based on that, you'll have a chat with Sam and his team and understand exactly what it entails.
Once you make the decision to move forward, then everything sort of kicks into play. Locally here, we'll help you with all the paperwork that you need, in order to start collating all the information for your application, and all the guidance of the team in Australia. Right down to when you actually make the investment.
We can assist you with all your tax clearances to move your foreign exchange over to Australia. We're in the FX business and we have the ability to get the clearances from the Reserve Bank, if it's more than your annual allowances of R11 million per person. Just understand that you're in good hands, we understand all the different aspects of the process and more importantly, we can really help you with all of that. So that's the approach we do – look at a turn-key from sort of cradle to grave – to make sure that what is actually quite an arduous journey is made a little bit easier. Also, what we do is we keep you focused so that you actually keep the momentum up. What often also happens is when somebody embarks on a journey like this, the complexity just tends to put that sort of on the backburner, so if you do want to make this move, start the enquiry, and start your planning sooner rather than later.
AR: The one question that I thought, well worth posing on the Significant Investor visa, I know that I think 60% of the investment will go into sort of more conventional investments and one of the classes mentioned there was property or real estate. Is that still something that has to be bought through a broker? Or can one make an investment in a residential property to live in that would then count towards that investment?
SH: Well, no, the entire investment must be made through the broker. So, if you choose to make a purchase outside of that five million, then that's not counted inside of the designated investment. It's important to note that the broker will take care of the entire investment. You do get some choice as to where that investment might be made when it comes to the balancing 60%. When it comes to property in real estate, it might be that the broker says, well, there's some commercial real estate in this portfolio that we could put some funds into. But it's certainly not going to be your residential property that is invested within the five million designated investment.
AR: Thanks very much, hence the name Significant Investment visa. The other question is at the end of the period, do I get all my money back from my investment or is there any portion of that that is ever a donation to the Australian state or to the federal government?
SH: Good question and a common question. First of all, you'll get paid a return on investment, usually on a quarterly basis, whether it be through the SIV or whether it be through the standard Investor visa with the government bonds. There is no donation made to the government. So, the government is not deducting from your investment at all. The 188b, where you're putting AUD 1.5 million into government bonds, is obviously a very secure investment, it's a government treasury bond. The return on investment is very low, but you're entitled to and will get back your entire investment at the end of that period of investment. Obviously, with the Significant Investor, AUD 5 million which is broken up into a different portfolio, there's some risk built into that. So, there's a potential to lose some money on some investments, but obviously to make money elsewhere in the entire category. But again, there's no donation made, unlike some other investment programmes throughout other parts of the world. This is a purely commercial investment across the ASX.
It's very common to continue to own and run a business or investments in South Africa or in other parts of the world whilst you establish yourself in Australia.
AR: Great, thanks very much. I think that's a very important point you made. I mean, there are a wide variety of these investment migration programmes and some of them have got really significant donations to the government. Some of them have got, I think, also some fairly risky investments just by virtue of where they are. I think certainly, Australia represents a totally well-balanced strategy compared to living in a place like South Africa. I mean, just listening to you throughout that conversation, your government's obviously very on top of how much capital it needs and where it needs to be deployed, and where the skills through the skilled visas need to be deployed, which is good to see.
Just another question: Can one continue to run their business in their home country (for argument) back in Johannesburg, whilst transitioning on the move to Australia?
SH: For sure. Look, very few people pick up their whole life and move in one solid transition. Most of my clients will still have investments, they will still have interests in businesses, they'll have ownership stakes, they'll have management responsibilities. So, a lot of my clients will be spending time in both countries. Pre-Covid it'd be common for these clients to be going back and forth between Australia and South Africa to continue to manage businesses and transition from one country to the other. Quite often, the business in South Africa is assisting from a cash flow point of view. So, you don't want to divest of that business immediately. You want to continue to run that. You might sell a portion of it to a partner and transition out of it that way. But it's very common to continue to own and run a business or investments in South Africa or in other parts of the world whilst you establish yourself in Australia.
AR: Thanks for that. Sam, just one of the things I mean, we were talking about this, the difference between the various state governments, etc. In terms of how they measure applicants, I assume some states are easier than others to get into or is it a pretty level playing field?
SH: Definitely, some states are more popular than others. The majority of the clients that I speak to say we want to go to Brisbane, we want to go to the Gold Coast. These are lovely places in the world to live. This means Queensland's very popular and so they have a lot of applicants and so Queensland has the opportunity to pick and choose as to who they want. They have tightened their funnel so to speak. So not everyone will get into Queensland, and then people will need to look at other states and territories. But they will learn that there's a lot of other beautiful places in Australia with a lot of opportunities that they might need to curtail their enthusiasm about the Gold Coast for a period of time. You might get there eventually. I say to some of my clients, go to Adelaide. It's beautiful. It's still close to the beach. It's very close to the wine farms – McLaren Vale is right there on your doorstep. It's got a lot to offer. If I didn't live in Melbourne, I'd probably live in Adelaide. I've got clients now who are in Adelaide who've been there for just over a year and they say Sam we're never moving to the Gold Coast because we love Adelaide so much. So yeah, be careful what you wish for. The grass is not always greener on the other side. Have a broad and open mind to where it is that you might land in Australia is my advice.
AR: Thank you, that was well explained. I think that kind of brings me to the end of the Q&A. Sam, before I wrap up, is there any sort of parting advice or comment that you'd like to give to our listeners?
SH: The last thing that I always like to impart to prospective migrants is get in touch, talk to a registered agent, do your research, do not embark on this mission on your own. It's not something that I advise anyone to do on their own. It's a minefield out there. So, whether you engage with us, or whether you engage with another registered agent, or immigration lawyer, make sure you get specialist advice. Make sure you talk to someone who's done this before.
AR: Thanks very much. I think that's pretty sage advice. Ladies and gentlemen, once again, thanks very much for giving up an hour of your day to come and listen to us. I guess my wrap up summary is very similar.
The minute you start putting a border between yourself and your investments, or you start deciding to physically relocate, you introduce all sorts of different risks and it's very important to understand before you physically relocate. Speak to your financial advisor. You're very welcome to chat with us as we've got some great advisors on our team. Understand what the implications are tax-wise. When you start physically moving yourself and your business, it can trigger all sorts of capital gains events, and there's a lot of things one needs to consider.
What we see often is people make very emotional decisions about relocating, and they don't always look before they leap. It can be really, really costly. You always have stories of people who go and it wasn't quite what they expected, they end up coming back. These are significant events in one's life and can really wipe out a lot of your wealth. So, make sure that you're dealing with people, check them out, do your due diligence, never rush. Act if you feel that you do want to move and you want to create some sort of future legacy for your children and your family outside of the country. By all means, do it. But just do it carefully and make sure that you plan and good luck with your decisions.
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