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Australia is cancelling its Millionaire Visa. The rich can't buy their way into the country now

Akshata Kamath
Akshata KamathSep 12, 2022 | 15:28

Australia is cancelling its Millionaire Visa. The rich can't buy their way into the country now

How will the world's rich migrate to Australia now, if the Golden Ticket Visa is cancelled? (Photo: Getty Images)

Australia's 'Golden Ticket' visa also known as the 'Millionaire Visa' allowed an investor to stay in Australia for up to five years if they tipped at least A$5 million (about Rs 27.36 crore) into approved investments and intended to hold that investment for the life of the visa. But as the scheme is costing Australia their own money and even attracting rich Chinese investors and Cambodian politicians with criminal backgrounds, the country plans to close it.

What's the Millionaire Visa? Just like we get travel visas and work visas, the Australian government created a Business Innovation and Investment (Provisional) visa for high net worth individuals in 2012. This investment visa is made of two parts: a provisional visa '188C' and a permanent visa '888'. These Australian visas allow a foreign investor to stay in Australia for up to five years if they invest at least A$5 million into approved investments and intend to hold the investment for the life of the visa. 

As per Y-Axis, Australia is the most preferred country for HNI's. (Photo: Getty Images)

What are the criteria to get your hands on Australia's Golden Ticket Visa? Investors have to invest at least:

  • A$500,000 (about 27.36 crores) in venture capital and growth private equity funds that back start-ups and small private companies, of which 
  • A$1.5 million (about 8.20 crore) is in approved managed funds that invest in emerging companies on Australia's stock exchange, and
  • A “balancing investment” of at least $3 million (about Rs 16.41 crore) in managed funds
  • Applicants must be nominated by a state or territory agency.

The loophole in the visa: This Significant Investors Visa (SIV) scheme has juicy advantages: there is no upper age limit for applicants and investors who do not even know basic functional English can apply for this scheme. (Imagine an 80-year-old politician who wants to retire in Australia with his illegal money). Also, if certain requirements are met, applicants can apply for a permanent visa.

The Golden Ticket Visa is seen as a “pathway for investing ‘dirty money’ (gambling or money laundering) in Australia. (Photo: Getty Images)

Who holds the Millionaire Visas of Australia? As per the Sydney Morning Herald, about 15,000 rich millionaires have held an Australian visa since the pandemic. From March 2020 to June 2021, almost 3,500 people held business innovation and investment visas. Of these, 85% are Chinese investors, 3.6% are from Hong Kong, and the rest are from South Africa, Malaysia, and Vietnam. 

Why are the Chinese so interested in this visa? The Chinese have historically been one of the Top 5 immigrant nationalities to have settled in Australia for decades. As per Reuters, China also saw a massive crackdown on corruption from 2014 onwards, and to avoid getting caught in this crackdown, many wealthy Chinese moved their money out of China into Australia. As Australia turned out to be a good place to keep their money safe, they referred it to other Chinese businesses (as businesses in China largely work on referrals) that also followed suit.

Also, the Chinese culturally associate the number eight with wealth, prosperity, and good fortune which led the quantum of Chinese investors to explode in the following years. Even though they did not need to, Chinese investors made multiple subsequent investments in the Australian stock markets (about 4-5 times the initial investment). 

(If you have watched Season 2 of the show 'Luxe Listings' on Amazon Prime (a show on real estate investments in Australia for the rich), you might have noticed how the show introduced a Chinese realtor Monika Tu to show the reality of her ''foreign clientele'')

 &nbsp;</p><p>&nbsp;</p><p><strong>Did Australia benefit from the Golden Visa?</strong>&nbsp;As foreign investors brought in money, Australia got to use interest-free funds for its economic programs.&nbsp;Though the visa requirements have changed over time, Australia has seen a capital inflow of somewhere between A$11 billion to 16 billion (around Rs 60,211 crore to Rs Rs 87,579 crore) through this visa program.&nbsp;&nbsp;</p><p><strong>Why&nbsp;is&nbsp;Australia not favoring&nbsp;this visa now? </strong>Australia&#39;s&nbsp;public policy think tank &#39;The Grattan Institute&#39;,&nbsp;Abul Rizvi&nbsp;(ex-deputy secretary of the Department of Immigration), and many other government heads have&nbsp;recommended that the Golden Ticket Visa be abolished. Even Australia&rsquo;s Home Affairs Minister Clare O&rsquo;Neill doesn&#39;t see a lot of benefits in continuing this&nbsp;scheme. This is because the Golden Ticket Visa holders:&nbsp;</p><ul> <li><strong>Are not as &#39;&#39;high quality&#39;&#39; as Australia expects: </strong>Investors in these visas generally tend to be in their late stage of life and/or business career. They are mostly over 45 and&nbsp;have limited English skills, so they basically want to settle down and retire in Australia. Also, rich political & criminal goons (like <a rel='nofollow' href="https://www.theaustralian.com.au/subscribe/news/1/?sourceCode=TAWEB_WRE170_a_GGL&dest=https%3A%2F%2Fwww.theaustralian.com.au%2Fnation%2Fhun-sen-cronies-allegedly-buying-golden-tickets-into-australia%2Fnews-story%2Fb486dfa3d997accbaca41fe4123b9288&memtype=anonymous&mode=premium&v21=dynamic-high-control-score&V21spcbehaviour=append#:~:text=Super%2Drich%20members%20of%20Cambodia's,to%20local%20Cambodian%2DAustralian%20leaders." target="_blank">rich members of Cambodia&#39;s&nbsp;corrupt Hun Sen regime</a>) are known to be using this visa for laundering illegal money from gambling and other sources into Australia. Australia wants to restrict this to have higher value investors, business owners and entrepreneurs to improve the quality of the investments and applicants.&nbsp;</li></ul><figure class="image"><img alt="" height="540" src="https://akm-img-a-in.tosshub.com/sites/dailyo//resources/202209/mana5280-ivg8lkdrtjs-unsplash120922011318.jpeg" width="720" /><figcaption>Photo: Unsplash</figcaption></figure><ul> <li><strong>Are costly for Australia because they pay lesser taxes than skilled workers</strong>: Initially, the income of visa users using the business stream was about $20,000 a year while a skilled visa worker would earn around $60,000 pa. This means&nbsp;that business owners would pay comparatively lesser taxes to the government. As per Clare O&#39;Neill, it costs the government &#39;&#39; A$120,000 more (about Rs 65 lakh per investor) in public services&nbsp;than they pay in taxes over their lifetimes&#39;&#39;.&nbsp;</li> <li><strong>Doesn&#39;t effectively&nbsp;promote innovation or investment in Australia</strong>:&nbsp;Most foreign folks start&nbsp;businesses&nbsp;in retail or hospitality instead of innovative industries. This also means that projects&nbsp;that normally wouldn&#39;t be green-lit are being financed.</li> <li><strong>Investors can get their invested money back and don&#39;t even have to give up their&nbsp;&#39;permanent residency&#39;</strong>: Investors get their money back by the end of the investment period and also get to be permanent residents&nbsp;of Australia. This means that business folks park their family in Australia and receive access to&nbsp;benefits like medicare and free education,&nbsp;while they continue their predominant business in another country.</li></ul><p>So the rich visa applicant benefits&nbsp;more than Australia itself.</p><p><strong>The after effects now:&nbsp;MA Financial Ltd, the&nbsp;&lsquo;Gold Ticket&rsquo; Visa adviser,&nbsp;</strong><strong>sees a 20% plunge in share prices.</strong></p><p><strong><img alt="" height="540" src="https://akm-img-a-in.tosshub.com/sites/dailyo//resources/202209/gettyimages-104271845120922030124.jpeg" width="720" /></strong></p><p>MA Financial is a financial services company that manages the foreign funds that come from China into the Australian stock market. As news broke of the possible revocation of the Millionaire Visa,&nbsp;share prices dropped&nbsp;by 20% in 20 minutes on September 12, 2022, which led to a halt in the trading of shares. Remember&nbsp;</p><p>(Even though MA Financial&rsquo;s average share monthly trading volume is only 2.5 lakh shares,&nbsp;about 8.38 lakh shares of MA Financial were traded on the Australian Stock Exchange in 20 minutes).&nbsp;</p><p>Why? Because <a rel='nofollow' href="https://www.fool.com.au/2022/09/12/why-did-the-ma-financial-share-price-just-crash-20-before-being-halted/" target="_blank">wealthy international clients contribute </a>$3.4 billion to MA Financial&rsquo;s $7.2 billion total assets under management and the scheme changes could make or break MA Financials.&nbsp;</p><p>What do you think of this scheme?</p>
Last updated: September 12, 2022 | 22:54
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