Overview

The Migration Regulations 1994 (the Regulations) were enacted to provide a structured framework for the administration of Australia's immigration policies, with subsequent amendments enhancing the focus on innovation and investment. The Instrument IMMI 16/075, made under the authority of paragraph 5.19E(6)(a) of Division 5.3 of Part 5 of the Regulations, aims to address the issue of channelling investment towards emerging enterprises and innovation by specifying the activities that do not qualify as "complying entrepreneurial activity" under the Subclass 188 and Subclass 888 visas. This regulation was introduced to foster a more dynamic and innovative economy by discouraging investment in passive sectors such as labour hire entities, residential real property, and existing entities including franchises, which already attract substantial capital flows. The policy objective is to promote investment in new businesses and the commercialisation of innovative research and development in Australia, thereby encouraging job creation and local innovation. The development of this Instrument involved extensive consultation with various federal departments and industry groups, as well as consideration from the Office of Best Practice Regulation, which determined that a Regulatory Impact Statement was not necessary. The Instrument is designed to take effect immediately after the commencement of the Migration Amendment (Entrepreneur Visas and Other Measures) Regulation 2016, ensuring a smooth transition and implementation of the new guidelines.

Scope and Application

The Instrument IMMI 16/075 is made under the Migration Regulations 1994 and specifies activities that are excluded from the definition of a complying entrepreneurial activity for applicants seeking the Subclass 188 (Business Innovation and Investment (Provisional)) visa or the Subclass 888 (Business Innovation and Investment (Permanent)) visa in the Entrepreneur stream. This legislation aims to exclude certain investment activities, such as those related to labour hire entities, residential real property, and existing entities including franchises, to encourage investment in emerging enterprises and the creation of new jobs. The specified activities are considered passive areas of the economy that already attract significant capital flows. The Department of Immigration and Border Protection consulted with various government departments and industry groups before drafting this Instrument. The Office of Best Practice Regulation has determined that a Regulatory Impact Statement is not required for this Instrument. The Instrument is not subject to disallowance and does not require a Statement of Compatibility with Human Rights. This Instrument applies to applicants for the Subclass 188 or Subclass 888 visa in the Entrepreneur stream. The scope of the legislation is confined to the exclusion of certain activities to ensure that the visa scheme encourages investment in new and innovative enterprises rather than established or passive economic areas. By excluding specified activities, the Instrument aims to foster the commercialisation of innovative ideas, the development of new enterprises, and the promotion of local commercialisation of innovative research and development. The exclusions apply nationally and are designed to influence investment patterns across all states and territories in Australia. The regulation commences immediately after the commencement of the Migration Amendment (Entrepreneur Visas and Other Measures) Regulation 2016, ensuring that the exclusions are effective from the specified date.

Key Provisions

The key provisions of this legislation, as outlined in IMMI 16/075, detail the specific activities that are not considered compliant entrepreneurial activities for the purposes of applying for a Subclass 188 or Subclass 888 visa under the Migration Regulations 1994 (paragraph 5.19E(6)(a)). These activities, which are intended to be excluded from the scope of the entrepreneurial visas, include investment in labour hire entities, residential real property, and existing entities such as franchises. This exclusion is meant to encourage investment in emerging enterprises and the commercialisation of innovative research and development in Australia, rather than in areas that already attract significant capital. The obligations imposed by this regulation on applicants seeking the Subclass 188 or Subclass 888 visas are clear. They must ensure that their proposed entrepreneurial activity does not involve any of the specified excluded activities. These applicants need to demonstrate that their activity is genuinely innovative and will contribute to the development of new enterprises and the creation of new jobs in Australia. To comply with the regulation, applicants must provide detailed information about their proposed activity and how it meets the requirements of a complying entrepreneurial activity, excluding the specified activities. Failure to comply with the provisions of this regulation can result in serious consequences for applicants. Although the specific penalties for non-compliance are not detailed in the text, applicants who submit an application that does not meet the requirements of a complying entrepreneurial activity may face refusal of their visa application. In more severe cases, ongoing non-compliance or misrepresentation could lead to further actions such as cancellation of visas, exclusion from Australia, and potential bans on future visa applications. These outcomes underscore the importance of adhering to the specific activities outlined in the regulation to ensure compliance with the visa requirements.