Australia is an attractive location for foreign investors to capitalise on a broad range of business and investment opportunities. The Australian Government welcomes foreign investment, and has an open foreign investment policy, therefore making it safe and secure for foreign investors to migrate, do business and invest in Australia.
Robust Economy | Dynamic Industry | Innovation Skills | Global Ties | Strong Foundations
Invest in Australia as a nation that is at the forefront of research and development, education, business and innovation. Our natural resources are limitless which provide vital energy supplies to the world. Medical and technical advancements abound resulting in a high quality of life. This article is designed as a quick introduction to the Business Innovation and Investment VISA 188 (Subclass) applicants exploring how to invest in Australia.
Why Invest and do Business in Australia?
Australia ranks in the top 5 countries to immigrate and the nation was built on colonial settlement from 1788 with the arrival of the First Fleet of British ships to Sydney, New South Wales. Since then Australia has developed into second and third generation immigrants who have found a home in Australia.
- One-third of all majority foreign-owned businesses operating in Australia are investments from the US, the UK and Japan combined, therefore account for half of the employment among all majority foreign-owned businesses.
- Almost two-thirds of exports from majority foreign-owned businesses are generated from US, UK and Japanese-owned businesses.
- Foreign-owned businesses also contribute significantly to Australia’s IVA. Businesses from the US, UK and Japan contribute around 10 per cent (combined) of Australia’s IVA, resulting in 10 per cent of total business assets are held by foreign-owned businesses from the US, the UK, Japan and Switzerland. (source: Austrade)
How to Invest in Australia?
- Your migration agent or attorney can work with our business broker to help you gain more knowledge about how to invest in Australia and select your target business
- Understand the local legal and financial environment particularly the Foreign Investment Review Board (FIRB). Confirm any regulatory approval requirements before you buy a business or invest in Australia
- Structure your financial situation in advance to ensure an optimal outcome and potentially avoid legal pitfalls
- Plan for long-term and short-term business funding to prepare for situations outside your control. Because each country has different finance rules and regulations which take time to work through
- Spread your risk and resources, but most importantly make an informed decision about the sector your planning to invest in Australia
- Think strategically long-term and have an exit plan in mind. While integration is difficult and time-consuming, it can make the difference between successful and unsuccessful deals
Advantages of Investing in Australia
Invest in Australia while enjoying your perfect climate from high temperatures and humidity in the tropical north to temperate Sydney weather to below freezing in the Canberra and Snowy Mountains regions
Quality of Living
Australia’s is rated the 9th highest in the world, according to the 2017 Social Progress Index. Sydney ranks 10th globally. Melbourne 16th and Perth comes in at 22nd according to the Mercer 2017 Quality of Living Rankings.
Almost 279,000 businesses across sectors such as accommodation, cafes, restaurants and takeaway food services, retail and transport. According to the latest statistics available (as at 30 June 2016). The industry employes around 890,000 people and the total Australian workforce for 2016-17, consequently increasing from 4% to around 924,600. Australia experienced record inbound tourism in 2016-2017 driven by strong growth from China, Malaysia, Hong Kong
The financial, regulatory, legal, political and economic systems are well established and provide security to Investor Stream applicants looking to invest in Australia
Australia’s (baby boomer) population is fueling the development sector in aged care and health services. Baby boomers are typically healthier and wealthier than their parents, thereby living longer and re-defining the housing market
Internal and external immigration stimulates the housing and building economy. Therefore, immigration has an enormous role to play in the Australian property market. About 55% of our massive population growth is made up of migrants from overseas
Spend by governments and private partnerships benefit growth planned around Australia. For example, Nowra and Western Sydney north rail link in NSW. The rail upgrade and duplication in Victoria. The Bruce highway and Beerburrum rail, and Cunningham Highway upgrades in QLD to name a few
Australia’s easy access via sea and air is a major factor for import and export services especially, in the Asian region. Hence, two-way trade in 2016 was A$673 billion, which made up 40% of our GDP. Nine of Australia’s 12 largest markets have a total trade of A$373 billion are within the Asian region
Business Innovation and Investment VISA (Subclass 188)
Visa applicants working with their respective migration agents and seeking nomination by an Australian State or Territory government must lodge an Expression of Interest (EOI) through the SkillSelect system. This article ‘Invest in Australia‘ is written as a guide for those applicants considering migrating to Australia through the ‘Business Innovation and Investment Visa 188 (subclass)
188 VISA allows you to
- invest in Australia through establishing a new or develop an existing business or
- make a designated investment with an Australian state or territory government or
- participate in a complying entrepreneurial activity in Australia
- make and maintain a complying investment in Australia or
- travel in and out of Australia for the life of your visa
- bring members of your family unit with you to Australia
- seek permanent residence by applying for a Business Innovation and Investment (Permanent) visa (subclass 888)
Invest in Australia FIRB approval for
- Foreign government investors
- Media sector
- Land rich entities
Invest in Australia – QUICK FACTS
- The visa is valid for four years and three months from the date it is granted.
- Applicants for a subclass 188 visa in any stream prior to 1 July 2015, may apply for a subclass 888 permanent visa after 3 years and 11 months.
- Possible extension stream if you hold this visa under the Business Innovation stream or the Significant Investor stream to meet criteria.
- If you hold this visa under the Investor stream or Premium Investor stream, you cannot apply for an extension stream under this visa.
- Business Innovation stream provisional visa holders can apply for one extension up to six years.
- Significant Investor stream provisional visa holders can apply for up to two extensions to eight years.
- Each extension stream lets you stay and invest in Australia for another two years.
Australian Investor Obligations
Foreign Investment Review Board (FIRB)
The Australian Government expects all entities seeking to invest in Australia to maintain the highest standards of corporate behaviour. Irrespective of whether those entities are Australian or foreign owned. Persons wanting to invest in Australia or involved in operating these entities are expected to understand Australia’s regulatory environment and abide by all the relevant requirements. Foreign investors should be aware of their obligations outlined in the link below. These requirements are ongoing and may change from time to time. Accordingly, investors are expected to keep themselves up to date with the FIRB and changes to their obligations that may occur.
- Australia has seen a strong population growth which will continue to underpin the property markets. Last year, Australia’s population grew by 389,100 people to reach 24.5 million by the end of March 2017
- Invest in Australia for housing which has averaged approximately 164,000 dwellings over the last 5 years. The demand will continue to 2021, therefore continuing strong population growth (underpinned by net migration of 240,000 per anum)
- Household and demographic shifts in composition (more one and two-person households), means Australia is likely to grow by 172,000 households a year, resulting in a 5% increase in demand
Health and Aged Care
- Invest in Australia $20 billion aged care sector, which employs over 224,000 staff across more than 1,800 businesses. Caring for over 270,000 elderly and disabled Australians across the country
- Australian baby boomer generation is reaching saturation point the aged care sector is the fastest growing market in this country https://japara.com.au/news/future-trends-in-australian-aged-care/
- This baby boomer demographic born between 1946-1965 is estimated to be 5.5 million in 2017
- Baby boomers are set to change the healthcare industry and the provision of aged care in the years ahead
- Invest in Australia with a record of groundbreaking innovations. Most noteworthy technologically connected workforce facilitating our highly educated, multi-cultural and multilingual society
- A vibrant telecommunications industry lies at the heart of furthering the digital imperative for Australia’s future generations
- Per capita, Australian is the 3rd largest connected country with access
- Connected households with internet access currently about 86.1% and mobile broadband subscriptions are 132.5 per 100 inhabitants
Why Invest in Australia?
The economy has outperformed other countries for more than two decades, as a result is achieving great success in global markets. The full report can be found here ‘Why Australia’ BENCHMARK REPORT 2018 from the Australian Trade and Investment Commission (Austrade)
The Australian economy is forecast to be the 13th largest in the world and the fifth largest in the Asian region in 2018, despite the fact the country is home to only 0.3 per cent of the world’s population. Australia’s nominal GDP is estimated at US$1.5 trillion (A$1.9 trillion) resulting in 1.8 per cent of the global economy. Australia has almost tripled the value of its total production from two decades ago
The country is a leading provider of goods and services that are in high demand across the global economy. Australia is a major producer of natural resources, including significant liquefied natural gas reserves. Clean, green agricultural commodities and premium food are coming into production. Operates in sophisticated financial markets, including the world’s sixth largest pool of managed fund assets, and a noteworthy leading destination for education and tourism
Australia is an ingenious nation that invented the black box, penicillin for civilian use, high-speed WIFI, the cervical cancer vaccine and Google Maps, among other innovations. Invest in Australia entrepreneurship funds and programs on the rise. One of 9 OECD countries that recorded an increase in the number of new businesses between 2013 and 2017. Almost half of all Australian firms are innovation-active, laying the groundwork for future discoveries
The dynamic Asian region integration is driving wealth creation and overall economic growth. Of the top 12 export markets in 2016, ten were in the Asian region and all were rated above investment-grade. Their combined value was around A$227 billion, making up more than two-thirds of Australia’s total goods and services export earnings of A$330 billion in 2016
The country is one of the easiest places in the world to do business, ranking 14th out of 190 economies. It takes around 2.5 days and a minimum of three procedures to start a business. Australia also ranks particularly well for enforcing contracts (3rd globally), getting credit (6th) and dealing with construction permits (6th).
FOREIGN INVESTMENT INFLOW
The latest confidence indicator towards Australian housing market remained positive in Q4, although waning compared to previous quarters. NAB’s view for 2018 largely unchanged.
The NAB’s quarterly residential property survey Q4 report tracks opinions of around 250 property market experts such as real estate agents, property developers, fund managers and owners.
The share of foreign buyers in Australian housing markets however continued to fall in Q4, dropping to a 6 year low 8.4% in new property markets and a 5-year low 5.5% in the established housing market.
World Investment Report 2018
Foreign direct investment (FDI) inflows to Australia, which more than doubled in 2016, maintained their high level at US$46 billion in 2017.
According to the United Nations Conference on Trade and Development’s (UNCTAD) World Investment Report 2018, Australia remained in the top ten global destinations for FDI.
From 2011 to 2017, Australia attracted an annual average of US$47 billion in FDI inflows, compared with an average of US$28 billion over the previous term (2004 to 2010). This represents a growth rate of 70% over the two periods, well above the world average of 24% and developed economies of 12%.
This solid growth has raised Australia’s share of global FDI inflows to 3% in the period of 2011–17 from 2.2% in the previous period. Australia’s economic resilience, strategic business location, increased global trade and investment ties, sound governance and political stability continue to position Australia as an attractive investment destination.
Australia was the eighth largest recipient of FDI inflows in the world in 2017, up from the ninth position in 2016. The total value of Australia’s FDI inflows stood at US$46.4 billion in 2017, marginally down 2.9% from the inflows in 2016. Global FDI inflows fell by 23% in 2017 to US$1.43 trillion from US$1.87 trillion in 2016. (source: Austrade)
Invest in Australia Further Research
Accrutus Capital has provided this quick summary of important information to help your decision when investing and setting up a business in Australia. More detailed information can be found on these Australian Government portals
- Tourism Australia http://www.tourism.australia.com/en
- Business Innovation and Investment Visa (subclass188) https://www.homeaffairs.gov.au/Trav/Visa-1/188-
- Austrade – Doing business in Australia https://www.austrade.gov.au/international
- Foreign Investment Review Board http://firb.gov.au/investment/
- Australian Taxation Office https://www.ato.gov.au/
- Reserve Bank of Australia https://www.rba.gov.au/
- Australian Prudential Regulation Authority https://www.apra.gov.au/
- Fair Work Ombudsman https://www.fairwork.gov.au/find-help-for/visa-holders-and-migrants
- Australian Securities and Investment Commission https://www.asic.gov.au/
- Superannuation Guarantee https://www.fairwork.gov.au/find-help-for/visa-holders-and-migrants
- Australian Consumer and Competition Act https://www.accc.gov.au/
- Australian Privacy Act 1988 https://www.oaic.gov.au/privacy-law/privacy-act/
- Trade, import and export https://www.australia.gov.au/information-and-services/business-and-industry/trade-import-and-export
- Anti-money laundering and Counter Terrorism Act https://www.oaic.gov.au/privacy-law/other-legislation/anti-money-laundering
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