Atlas Advisors Australia has issued a statement surrounding changes to the Complying Investment Framework (CIF) for the Business Innovation and Investment Program (BIIP) ahead of the 1 July crossover where the BIIP will be simplified from nine to four streams, prompting changes to eligibility requirements.
As part of the company’s statement, executive chairman of Atlas Advisors Australia Guy Hedley urged the government to prioritise the effective use of migrant investment to “fill critical funding gaps” in Australian seed-stage venture capital, noting a “heavy hit to seed-stage venture capital in recent years was compounded by frustrating delays in the processing of BIIP applications”.
“This is stymying the flow of funding for seed-stage venture capital and emerging companies which Australia’s economy needs to create future jobs and revamp industry technological capabilities,” Mr Hedley said.
“It currently takes around two years for an application to be determined, compared to five years ago when time frames were vastly more efficient — between six and nine months.”
Mr Hedley said speeding up processing for BIIP applications “could unlock more than $100 million that capital-starved start-ups needed to grow in the post-pandemic economy”.
“Many seed-stage start-ups are facing a funding shortage because of the impact of COVID-19 on the riskiest stage of venture capital,” he said.
“Fast-tracking approval for BIIP applications could help innovative Australian companies in areas such as life sciences and agribusiness to survive and thrive beyond this period of uncertainty.”
Further, Mr Hedley noted that the government “could get better use out of migrant investment by redirecting funds under programs such as the Significant Investor Visa program away from emerging listed companies, property and bonds towards venture capital”. It can achieve this, he said, by increasing the allocation towards venture capital from 10 per cent to 20 per cent.
“Stimulating seed-stage venture capital would significantly increase start-up growth, jobs and industry technological capability — making it a far better deal for Australia,” he said.
In commenting on the changes to the BIIP in December last year, acting Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs at the time (now education minister), Alan Tudge, described them as enabling greater investment in key sectors. The changes, Mr Tudge added, will go a long way in creating Australian jobs.
“Almost $1.3 billion was invested through the Business Innovation and Investment Program last year, investment that is critical to our COVID-19 economic recovery,” Mr Tudge said at the time.
“These changes will maximise the economic contribution of these high-value investors to get the best possible outcome for Australians.
“Our Migration Program for 2020–21 is clearly focused on job creators, those with key skills and migrants who are going to invest in Australia’s future.”
As per the Department of Home Affairs website, the key changes to go into effect from 1 July 2021 include:
The program will be simplified from nine to four visa streams: Business Innovation, Entrepreneur, Investor, and Significant Investor. There will be a clear pathway to permanent residency for each category.
The Premium Investor, Significant Business History and Venture Capital Entrepreneur visas will be closed to new applications from 1 July 2021. Applications already lodged for these visas will still be processed.
Provisional visa holders in all four streams will be able to apply for permanent residence if they meet the requirements after three years, but the provisional visa will now be valid for five years, meaning they have additional time to meet the requirements.
Business Innovation and Significant Investor visa holders will also continue to be able to extend their provisional visas if they do not meet the business and residence thresholds in the required time frame.
Business Innovation provisional visa holders can apply for a two-year extension provided they demonstrate a realistic commitment to continuing to manage a business that has been actively operating in Australia for the previous two years.
Significant Investor provisional visa holders can apply for two, two-year extensions provided they continue to maintain their complying significant investment.
The requirements for Business Innovation visa holders will be increased to ensure the program is attracting migrants with proven business skills. Business Innovation visa holders will be required to hold business assets of $1.25 million (up from $800,000) and have an annual turnover of $750,000 (up from $500,000) to prove their business acumen. These settings have not changed since 2012 when the program was first introduced.
The $200,000 funding threshold required for Entrepreneur visa applicants will be scrapped. Applicants will need to be endorsed by a state or territory government. This follows the successful Supporting Innovation in South Australia pilot program and will give states and territories an additional way to attract international entrepreneurs.
The government will also be consulting widely with industry to inform any further changes to the Complying Investment Framework. Any changes to the framework will be announced in the early half of next year, with sufficient time for businesses and investors to adjust.