An expansion of the Significant Investor Visa (SIV) program could boost venture capital funding for Australian business and generate economic growth, according to the Australian Private Equity and Venture Capital Association (AVCAL).
AVCAL chief executive Yasser El-Ansary said the SIV program has been a significant part of Australia’s strategy in competing for global capital from offshore investors, generating $720 million in offshore funding since late 2012.
Mr El-Ansary believes, however, that the program needs to be expanded to “allow offshore investors to allocate capital to other asset classes that are critical to supporting the growth of Australia’s future, such as venture capital and private equity”.
In its submission to the Department of Immigration and Border Protection review, AVCAL argued the “narrow band of eligible asset classes under the list of complying investments’ is one of the shortcomings of the existing SIV regime.
“In the venture capital sector, new investment from private individuals over the last three years has averaged $33 million each year, and we think that a more expansive Significant Investor visa programme could lead to a substantial lift in that level of investment over the next few years,” said Mr El-Ansary.
AVCAL noted that other developed economies such as the United States, United Kingdom and Singapore are using SIV-equivalent programs to “channel offshore investment into those industry sectors that need funding support to catalyse targeted economic activity”.
“There is an intense global race for capital from investors who are looking for markets that offer sustainable growth potential into the future, and that’s where Australia has an opportunity to seek out new investment into venture capital and private equity, which will be critical to Australia’s future economic prosperity,” Mr El-Ansary said.