Australia's Significant Investor Visa: AUD 5 Million and What You Actually Get

Australia's Significant Investor Visa (SIV), formally known as the Business Innovation and Investment (Provisional) visa (subclass 188, stream C), requires an investment of AUD 5,000,000 in complying investments for a minimum of four years. It is the most financially demanding investor visa in the Asia-Pacific region, but it offers a pathway to Australian permanent residency with the lowest physical presence requirement of any Australian business visa — just 40 days per year.

Legal Framework

The SIV operates under the Migration Act 1958 and Migration Regulations 1994, specifically Schedule 2, subclass 188 (Business Innovation and Investment — Provisional) and subclass 888 (Business Innovation and Investment — Permanent). The programme is administered by the Department of Home Affairs and requires state or territory government nomination.

Investment Requirements

The AUD 5,000,000 must be allocated across three prescribed categories under the Complying Investment Framework (CIF), introduced in July 2015 and amended in March 2021:

Category 1: Venture Capital and Growth Private Equity (Minimum 20%)

• At least AUD 1,000,000 must be invested in qualifying Australian venture capital or growth private equity funds
• Qualifying funds must be registered as Early Stage Venture Capital Limited Partnerships (ESVCLPs), Venture Capital Limited Partnerships (VCLPs), or Australian Venture Capital Funds of Funds (AFOFs) registered under the Venture Capital Act 2002
• The investment must be in new capital commitments (not secondary purchases of existing LP interests)

Category 2: Eligible Managed Funds — Emerging Companies (Minimum 30%)

• At least AUD 1,500,000 must be invested in eligible managed funds that invest in emerging companies listed on the Australian Securities Exchange (ASX) with a market capitalisation of less than AUD 500,000,000
• Qualifying funds include managed investment schemes registered with ASIC that meet the emerging company investment mandate

Category 3: Balancing Investments (Maximum 50%)

• Up to AUD 2,500,000 may be invested in a broader range of eligible managed funds, including those investing in:
  • ASX-listed companies (all capitalisations)
  • Australian corporate bonds
  • Annuities issued by Australian institutions
  • Australian real property (commercial or residential, but not direct ownership — must be through a managed fund)
  • Philanthropic contributions to approved Australian ventures (limited)

Prohibited Investments

• Direct real estate purchases
• Direct share purchases (must be through managed funds)
• Term deposits with Australian banks
• Government bonds (removed from Category 3 in the March 2021 reforms)
• Investments in residential real property fund that is primarily residential (more than 10% of assets in residential property)

State or Territory Nomination

Before applying, the investor must secure nomination from an Australian state or territory government. Each state has its own nomination criteria, but common requirements include:

• Demonstration of genuine intent to reside in the nominating state
• A statement of commitment to the state's economy
• Compliance with the complying investment framework
• Some states require a minimum period of intended residence or business activity

Nomination fees vary: AUD 500-2,000 depending on the state.

Physical Presence Requirement

The SIV has Australia's most lenient presence requirement:

• 40 cumulative days per year in Australia during the four-year provisional visa period (total 160 days over four years)
• This is averaged; minor shortfalls in one year may be compensated by excess presence in another, provided the cumulative target is met
• The applicant must maintain the complying investments for the full four-year period

For comparison, the Business Innovation stream (subclass 188A) requires a much more substantial presence.

Application Process

Step 1: Expression of Interest (EOI)

• Submitted through SkillSelect, the Department of Home Affairs' online system
• The EOI registers the applicant's intention and is visible to state/territory governments for nomination
• No fee for the EOI itself

Step 2: State Nomination

• The applicant contacts or is contacted by a state/territory government
• Nomination approval is typically issued within 4-12 weeks

Step 3: Visa Application (Subclass 188C)

• Filed with the Department of Home Affairs
• Visa application fee: AUD 9,390 per primary applicant (plus AUD 4,695 per dependant aged 18+, AUD 2,350 per dependant under 18)
• Supporting documents include: financial statements, source of funds documentation, investment strategy, police clearances, health examinations, English language evidence
• Processing time: 12-18 months (though some applications take longer)

Step 4: Complying Investments

• The AUD 5,000,000 must be invested within the required timeframe after visa grant
• Investments must be maintained for the full four-year provisional period
• The investor must provide annual investment holding statements to the Department of Home Affairs

Step 5: Permanent Residency (Subclass 888C)

After four years on the provisional visa, the investor may apply for permanent residency:

• Confirm that the complying investments were maintained for the full period
• Confirm that the 40-day per year presence requirement was met
• Application fee: AUD 2,590
• Processing time: 12-24 months

Total Costs

Item	Amount (AUD)
Complying investment	5,000,000
Visa application fee (primary)	9,390
State nomination fee	500-2,000
Permanent residency application	2,590
Legal/advisory fees	30,000-60,000
Fund manager fees (annual)	1-2% of invested capital
Total fees (excluding investment)	75,000-150,000

Fund management fees over the four-year holding period can total AUD 200,000-400,000, making the true cost of the programme significantly higher than the headline AUD 5M investment.

Tax Implications

Australian Tax Residency

Holding a subclass 188C visa makes the investor an Australian tax resident if they spend sufficient time in Australia or demonstrate other indicia of residency under the individual tax residency tests (Section 6(1) of the Income Tax Assessment Act 1936, as amended by the individual tax residency rules). The 40-day minimum presence does not automatically trigger tax residency, but it may in combination with other factors (Australian bank accounts, property, family presence).

Key Tax Features

• Personal income tax: Progressive rates from 0% to 45% (plus Medicare levy of 2% and temporary budget repair levy of 2% on income above AUD 180,000 — the latter expired but may be reintroduced)
• Capital gains tax: Included in assessable income. A 50% CGT discount applies to assets held for more than 12 months.
• Foreign income: Australian tax residents are taxed on worldwide income. Foreign tax credits are available.
• No inheritance tax: Australia does not impose estate or inheritance tax.
• Superannuation: The compulsory superannuation system does not apply to self-funded investors but may be relevant if the investor takes up employment.

Temporary Resident Exemption

Subclass 188C visa holders may qualify as "temporary residents" under the Income Tax Assessment Act 1997 if they do not satisfy the "domicile test" and their spouse is not an Australian citizen or permanent resident. Temporary residents benefit from:

• Exemption from Australian tax on foreign income (except employment income for work performed for an Australian entity)
• Exemption from Australian CGT on non-taxable Australian property (i.e., foreign assets)
• This exemption is extremely valuable for SIV holders with substantial foreign investment portfolios

The temporary resident exemption ceases once the investor obtains permanent residency (subclass 888C), at which point worldwide income becomes fully assessable.

Programme Status and Future

The Australian government announced in May 2024 that it would close the SIV programme to new applicants as part of the Migration Strategy review. Existing provisional visa holders will be permitted to transition to permanent residency, but new EOIs are no longer accepted for the subclass 188C stream.

Applicants who have already lodged EOIs or received invitations to apply may still have their applications processed. However, anyone considering the SIV for the first time should note that the programme is effectively closed to new entrants.

Key Takeaways

• The SIV requires AUD 5,000,000 invested across three prescribed categories: venture capital (20%), emerging companies (30%), and balancing investments (50%). Direct property purchases and bank deposits are prohibited.
• Physical presence of just 40 days per year makes it the most flexible Australian business visa, but fund management fees of 1-2% annually add significantly to the total cost.
• The path to permanent residency is four years on the provisional visa followed by a permanent visa application. Total timeline from application to PR is approximately 5-7 years.
• The temporary resident tax exemption shields foreign income and foreign CGT from Australian tax during the provisional visa period. This exemption ends upon grant of permanent residency.
• The programme has been closed to new applicants as of 2024. Existing applicants and provisional visa holders may still complete the pathway.
• Total costs including investment, fees, and fund management charges over four years can reach AUD 5.3-5.6M, making this one of the most expensive residency-by-investment programmes globally.