Overview

The Migration Regulations 1994, as amended by the instrument F2013L01571, aim to specify eligible managed fund investments for the purposes of the Significant Investor stream under the Subclass 188 Business Innovation and Investment (Provisional) visa and the Subclass 888 Business Innovation and Investment (Permanent) visa. This legislative instrument was introduced to address the need to clarify and expand the list of eligible investments for the specified visa categories. The instrument operates under the authority of the Minister for Immigration and Border Protection and was made to explicitly define what constitutes a complying investment in the context of managed funds. The overall policy objective is to ensure that investments are directed towards sectors that foster economic growth and innovation in Australia, thereby supporting the broader goals of the immigration program. The instrument, which commenced on 23 November 2013, outlines a comprehensive list of eligible investments, including infrastructure projects, Australian real property, bonds, and other financial instruments, with the aim of channelling capital into productive areas within the Australian economy.

Scope and Application

The Migration Regulations 1994, as amended by Instrument F2013L01571, detail specific types of investments that qualify as complying investments for the purposes of the Significant Investor stream under the Subclass 188 Business Innovation and Investment (Provisional) visa and the Subclass 888 Business Innovation and Investment (Permanent) visa. This regulation applies to individuals who are making investments in managed funds to meet the eligibility criteria for these visas. The investments must be in particular assets, including infrastructure projects in Australia, cash held by Australian deposit-taking institutions, bonds issued by Commonwealth or State/Territory governments, corporate debt in Australian listed companies or trusts, real property in Australia, Australian agribusiness, annuities issued by Australian registered life companies, and certain derivatives used for non-speculative portfolio management purposes, among others. These investments must comply with the specified conditions and proportions as outlined in the regulation. The regulation extends its applicability to entities or individuals directly or indirectly investing through an investor-directed portfolio service, ensuring a comprehensive scope that covers all necessary investment channels. The geographic reach of this regulation is confined to Australia, affecting entities and individuals within the Australian jurisdiction. The regulation does not specify any exclusions, exemptions, or thresholds beyond those outlined in the detailed list of eligible investments. Subordinate instruments may further refine or expand upon the specific types of investments or conditions for compliance, aligning with the overall legislative intent to facilitate targeted investment under the specified visa categories.

Key Provisions

The Migration Regulations 1994, specifically under subregulation 5.19B(1), stipulate that an investment by a person (the investor) qualifies as a complying investment if it meets all the requirements set out in the regulation (subregulation 5.19B(1)). These regulations also detail, under paragraph 5.19B(2)(c), that investments in managed funds, whether directly or through an investor directed portfolio service, must be for a purpose specified by the Minister through a written instrument. The current instrument, IMMI 2013/051, specifies eligible managed fund investments and replaces the previous instrument, IMMI 12/117, to broaden the list of eligible investments for the Significant Investor stream under the Subclass 188 Business Innovation and Investment (Provisional) visa and the Subclass 888 Business Innovation and Investment (Permanent) visa. The instrument delineates that investments in complying managed funds must be limited to specific types of assets, including infrastructure projects in Australia, cash held by Australian deposit-taking institutions, bonds issued by the Commonwealth or a State or Territory Government, bonds, equity, hybrids, or other corporate debt in companies and trusts listed or expected to be listed on an Australian Stock Exchange within 12 months, bonds or term deposits issued by Australian financial institutions, real property in Australia, Australian agribusiness, annuities issued by an Australian registered life company, derivatives used for portfolio management and non-speculative purposes (constituting no more than 20 per cent of the total value of the managed fund), loans secured by mortgages over investments listed in subparagraphs 2(a) to 2(h) of the instrument, and other managed funds that invest in the investments listed in subparagraphs 2(a) to 2(j) of the instrument. The parties or entities governed by these regulations must ensure their investments align with the specified categories to be considered complying investments. This means meticulous documentation and adherence to the listed types of investments to maintain eligibility under the migration regulations. Failure to comply with these provisions can result in the investment not being recognised as a complying investment, potentially affecting eligibility for the visas under the Significant Investor stream. For breaches of these regulations, the consequences can be significant. While the explanatory statement does not explicitly outline the penalties or consequences, breaches of migration regulations generally can lead to administrative penalties, visa cancellations, or exclusion from Australia. The severity of the penalty can depend on the nature and extent of the breach, and in some cases, criminal charges may be applicable. The specifics of the penalties are not detailed in this explanatory statement but would typically be found in the relevant sections of the Migration Act 1958 and other related legislation.