BasisPoint Consulting's managing director, David Chin, told InvestorDaily that the SIV scheme is likely to attract $5 billion every year from an estimated 1,000 global SIV investors, which could provide new capital and export opportunities for SMEs.
"Chinese entrepreneurs have a better affinity toward SMEs and towards making joint ventures as well as new business opportunities," Mr Chin said.
"The scheme is still in its early stages, but being involved now would make investors a first mover in this new industry."
Mr Chin said Australian SMEs with an SIV investor can benefit by gaining new capital from a 'silent investor' as well as obtaining new export opportunities through the investor's network in Asia.
Research has found China to be the main source country for investors interested in the government's SIV scheme, he said,
Chinese investors have a particular interest in Australia, Canada, Singapore and the United States as investment destinations, but he noted that Australia is a frontrunner due to its existing economic ties with the country.
"From my research, China is the main source country and even the immigration department has alluded to the fact that with the number 888 part of the name of the scheme obviously that 888 is a lucky number in Chinese culture," Mr Chin said.
"Singapore and Canada have closed their ultra-high net worth immigration schemes because there were just too many investors and the US is not as attractive because they have quite onerous global tax implications if you become a US resident.
"There are also existing economic ties between China and Australia and these economic ties are growing."
Mr Chin said China's economy is in the very early stages of a financial boom and entrepreneurs in China are looking for opportunities to develop their own businesses.
This, he said, provides a significant opportunity for Australian SMEs.
"This [estimated] amount is nearly half of the entire net self-managed super fund inflows last financial year," Mr Chin said.
"It is also half the capital raised by all the initial public offerings on the ASX last year, so the SIV is significant."
