New venture capital SIV scheme off to very slow start as Chinese mostly want property

New venture capital SIV scheme off to very slow start as Chinese mostly want property
New venture capital SIV scheme off to very slow start as Chinese mostly want property

Just 19 millioniares have sought significant investor visa permits since Australia overhauled its requirements from July, the Australian Financial Review has reported.

New applicants now must invest some of their $5 million into smaller equities and venture capital, directing investment away from passive investment towards investment in innovation and industrial development.

It was sitting at seven applications two months ago.

Some 1,600 applicants, mostly from China preferred the former fast track residency scheme that allowed low-risk government debt and property investments investing around $3.8 billion into Australian assets after the Federal Government created the golden visa in 2012. 

Under the new rules, applicants must spend $500,000 on funds investing in startup and small private companies, $1.5 million on small-cap equity funds, with the other $3 million on managed funds across Australian listed securities, eligible corporate bonds or notes, annuities and property.

Investment in residential real estate will only be permitted to comprise 10% of the $5 million minimum investment amount, although investors may invest in excess of this outside of this limit.

"The cost of the visa has gone up the risk curve," David Chin, the Sydney-based managing director of Basis Point Consulting Pty told the paper.

Chinese nationals accounted for 91 percent of applications under the old program, Goldman Sachs Group Inc. estimated.

Australia granted around 750 of the visas between November 2012 and March 2015 from 1,679 applications submitted, government data show with Victoria the most popular destination.

The new Federal Government rules which require investors to put their money into riskier assets such as venture capital come as likely investors also struggle to shift money following China's official central government move to tighten capital controls.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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