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IMPACT – MEDIUM
What is the change? Australia has launched a new Premium Investor Visa (PIV) programme, available by invitation to foreign nationals capable of investing A$15 million (about US$11 million) in the Australian economy. The country has also made changes to its Significant Investor Visa (SIV) programme, open to foreign nationals who invest A$5 million (about US$3.7 million).
What does the change mean? Foreign nationals invited to do so can obtain permanent residence through the PIV programme in 12 months by investing A$15 million. Foreign nationals capable of investing A$5 million are able to apply for permanent residence through the SIV programme after four years. Investment requirements are more flexible for foreign nationals invited to participate in the PIV programme.
Background: PIVs will be available by invitation only. The required A$15 million can be invested in a number of ways, including securities, government bonds, certain corporate bonds, real property (excluding residential property), deferred annuities, or government-approved philanthropic donations. Investors are eligible for permanent residence after 12 months and are not required to live in Australia during that time.
Officials made changes to the SIV programme in an effort to steer money away from passive investments such as government bonds or residential real estate.
SIV applicants must invest at least A$5 million over four years, including at least A$500,000 in select venture capital or private equity funds investing in start-ups and other small private companies; at least A$1.5 million in managed funds or Listed Investment Companies (LICs) that invest in emerging companies on the Australian Securities Exchange (ASX); and an investment of up to A$3 million in managed funds or LICs that invest in a mix of ASX-listed companies, corporate bonds, annuities, and real property.
SIV applicants cannot count previous investments toward the A$5 million total. They must invest their money for at least four years before being eligible for permanent residence and are required to be in Australia for at least 40 days for each year they have held an SIV.
BAL Analysis: The PIV and SIV programmes provide alternative migration routes for wealthy investors capable of investing large sums of money and interested in relocating to Australia. The PIV provides flexible investment opportunities for foreign nationals invited to participate in the programme, though it remains to be seen how many people will take Australia up on the opportunity given the A$15 million price tag. The SIV programme has proved to be relatively popular, and by changing the investment requirements, the Australian Government is hoping to give a boost to start-ups and other emerging companies.
This alert has been provided by BAL Australia. For additional information, please contact australia@bal.com.
MARN: 9683856
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
IMPACT – LOW
What is the change? Australia has adjusted its Skilled Occupations List (SOL) for independent skilled migration applicants.
What does the change mean? Cabinet makers and panelbeaters (auto body mechanics) will be added to the list, while urban and regional planners, dentists and dental specialists will be removed. The changes are based on the levels of demand in Australia for people holding such jobs.
Background: The SOL provides a list of jobs available to skilled migrants who are applying for visas independent of sponsorship from a company or nomination from a state or territory. The list is adjusted to reflect changing demands in the Australian labour market. The changes described above take effect 1 July. A complete list of the nearly 200 jobs on the SOL is available on the Department of Immigration and Border Protection’s website.
BAL Analysis: The changes make it easier for cabinet makers and panelbeaters to migrate to Australia, even absent a sponsor. It makes it more difficult for urban and regional planners, dentists and dental specialists to migrate to the country. BAL will continue to monitor news of any possible changes to the SOL in the future.
What is the change? Under a pilot program, Australia will offer 10-year multiple-entry visitor visas to Chinese nationals.
What does the change mean? Chinese travellers will be able to make repeat visits to Australia without having to renew their visas for 10 years.
Background: The visas aim to attract the growing number of Chinese tourists and compete with the U.S. and Canada, who have both recently extended 10-year visas to Chinese nationals. The number of tourists from China is expected to top 200 million by 2020, and Chinese visitors already contribute A$5 billion to the Australian economy. Business travellers conducting permitted business activities are also eligible for Visitor Visas.
BAL Analysis: The move comes on the heels of the China-Australia free trade deal signed Wednesday and represents another provision to liberalise movement and trade between China and Australia.
What is the change? Australia and China have signed a landmark free-trade agreement.
What does the change mean? The China-Australia Free Trade Agreement, or ChAFTA, was crafted to provide greater access to Australia and China for business visitors, intra-company transferees, contractual service suppliers and company executives.
Background: Australian Minister for Trade and Investment Andrew Robb and Chinese Commerce Minister Gao Hucheng signed ChAFTA Wednesday after the deal was agreed to in principle in November 2014.
Australia’s commitments under the agreement include providing stays of four years, with possible extensions, for Chinese intra-corporate transferees and contractual service suppliers; stays of up to three months for Chinese installers and servicers; stays of 90 days for business visitors or six months, with possible extension, for business visitors who are service sellers; and stays for spouses and dependants equal to the stays provided to principals, provided that period is for at least 12 months.
China’s commitments under the agreement include providing initial stays of up to three years for intra-corporate transferees (including executives, managers and specialists); initial stays of up to one year or the duration of the contract for contractual service providers; stays of up to 180 days or the duration of the contract for installers and maintainers; stays of up to 180 days for business visitors; and stays for spouses and dependants equal to the stays provided to principals, provided that period is for at least 12 months.
ChAFTA follows similar agreements between Australia and Japan (JAEPA) and Australia and South Korea (KAFTA). The Australia-China agreement may be the most significant for Australia, however, as China is the country’s biggest trading partner.
BAL Analysis: It will still take some time for the agreement to enter into force; however, ChAFTA represents a liberalisation of barriers across many categories of workers, business visitors and investors.
What is the change? A disallowance motion in the Senate has reversed a recent rule that lowered the market-rate salary exemption from A$250 000 to A$180 000 for 457 visa holders. The exemption threshold will revert back to A$250 000.
What does the change mean? Foreign employees must earn at least A$250 000 for employers to be exempt from salary-equivalency rules. For employees making less than the exemption threshold of A$250 000, employers must prove they are earning the same as their Australian counterparts.
Background: Employers must show evidence that they are paying the market rate to 457 visa holders, but are exempt if the worker’s base salary reaches a threshold set by the Government.
In April, the exemption threshold was lowered significantly to A$180 000, allowing more employers to benefit from the exemption.
BAL Analysis: The return to the higher exemption threshold means employers will not qualify as often for the exemption from market-rate salary assessments.
IMPACT – HIGH
What is the change? A union covering employees of the Department of Immigration and Border Protection and Customs and Border Protection is planning intermittent work stoppages 15 to 26 June.
What does the change mean? The stoppages may delay international travellers at several airports and reduce services at government agencies, including visa processing.
Background: The Community and Public Sector Union is taking the protected industrial actions to protect members’ pay and benefits after the federal budget called for further cuts in public sector jobs. The industrial agreement is due to expire 30 June and a proposed agreement has been circulated to employees for an upcoming vote.
These airports will be affected by the strikes on the following dates:
Sydney: 16 and 18 June Perth: 18 June Darwin: 18 June Brisbane: 24 June Gold Coast: 24 June Melbourne: 25 June Adelaide: 26 June Cairns: 26 June
BAL Analysis: DIBP is taking contingency measures to minimise the impact on services; nevertheless, businesses, travellers and visa applicants should plan for delays in the coming weeks.
What is the change? Australia’s Federal Court has ruled that a Darwin company must pay nearly A$126,000 to 457 visa holders the company employed and more than A$26,000 in unpaid taxes.
What does the change mean? The company, Choong Enterprises Pty Ltd, was also fined A$175,000 for 457 programme violations in April; it now faces a tab topping A$335,000. The Australian Government’s aggressiveness in pursuing legal action is a sign of how serious officials are taking 457 sponsorship violations. At the same time, officials have stressed that the vast majority of 457 sponsors comply with programme requirements.
Background: Australia’s Subclass 457 visa allows skilled workers to enter and work in Australia for up to four years. Employers participating in the 457 programme must satisfy industrial relations regulations and meet a number of requirements, including minimum salary and labour market testing.
In the recent case, the Federal Court found that Choong Enterprises failed to provide minimum terms and conditions of employment, failed to keep proper records and illegally recovered funds from visa holders for migration agent fees. Some workers were found to have worked for 60 hours a week at A$12 per hour and were not given sick leave or extra pay for overtime hours and public holidays.
The ruling is just one example of Australia’s efforts to crack down on 457 programme abuse. Government officials have stressed, however, that, on the whole, the programme benefits the Australian economy and that the vast majority of 457 sponsors comply with the programme’s requirements.
Cracking down on abuse is a key component of the Government’s recently announced overhaul of the Subclass 457 visa programme. Assistant Minister for Immigration and Border Protection Michaelia Cash said in a statement about the Choong Enterprises case that the Government has “no sympathy for those who abuse our migration programme and blatantly disregard laws that are in place to protect workers and legitimate business owners.”
BAL Analysis: Though most 457 programme sponsors follow the rules, the Government’s focus on 457 violations is a reminder of the importance of complying with visa guidelines. Penalties can be harsh and may include fines, sanctions and legal action. Contact a BAL Migration Agent if you have any questions about staying in compliance with Subclass 457 or other visa requirements.
What is the change? The Australian Government will raise visa application charges (VACs) across a number of visa categories. What does the change mean? Foreign nationals and employers sponsoring visa applicants should prepare for increased fees beginning 1 July.
Background: The Government estimates it will raise A$437.1 million over four years as a result of higher VACs and through a cost-recovery programme imposed on those applying for citizenship.
Some VAC increases will be modest; others will be more significant. VACs for Subclass 457 visas will increase 2.3 per cent, or A$25, from A$1035 to A$1060. VACs for Significant Investor visas will increase by 50 per cent, from A$4675 to A$7010. Visas in other streams will see VAC increases of 5 or 10 per cent, while Electronic Travel Authorities (ETA), eVisa and Refugee and Humanitarian visas will not be affected.
VACs for applications made overseas will be increased to come into alignment with VACs in Australia. The exception will be for Child Visas; domestic VACs for Child Visas will be dropped so that they come into alignment with overseas VACs for Child Visas. A full list of the new VACs is available on the Australian Government Department of Immigration and Border Protection’s website.
The Government also anticipates significant revenue through a cost-recovery programme imposed on those applying for citizenship. “Moving to full cost recovery for citizenship costs is consistent with the Australian Government Cost Recovery Guidelines and is underpinned by the principle that cost recovery promotes equity where the recipients of a government service, rather than the general public, bear its costs,” the budget says.
BAL Analysis: Employers and foreign nationals applying for visas to Australia on or after 1 July should check the new rates and be prepared to pay higher VACs.
What is the change? Australia’s temporary skilled migration income threshold (TSMIT) will remain set at A$53,900 per year. The market salary exemption threshold, however, will be significantly reduced from A$250,000 to A$180,000 per year.
What does the change mean? Employers will be exempt from rules requiring them to evidence paying market-rate salaries for any primary 457 visa holders or applicants who will receive earnings of at least A$180,000 per year.
Background: The TSMIT will remain at A$53,900 per year, where it has been set since 1 July 2013. The TSMIT represents the minimum market salary rate that an equivalent Australian employee would receive for the same, or similar, position that a sponsoring employer is seeking to fill with a foreign national. Foreign nationals must receive earnings in accordance with the relevant market salary rate for the nominated position or occupation. If the market salary rate for the position the business wishes to fill falls below the TSMIT, then the relevant 457 nomination application criteria will not be met. An exemption to evidence that the market salary rate requirement will be met applies to those primary 457 visa applicants/holders who will receive annual earnings of A$180,000 or more.
BAL Analysis: The drop in the market salary exemption threshold is good news for employers, as they will not have to worry about market salary rate requirements for primary 457 visa holders/applicants making at least A$180,000 per year.
What is the change? Australia has changed its English-language testing requirements for primary Subclass 457 visa applicants, altering the required minimum scores and permitting more providers to administer tests. Changes have also been made to the English-language requirements for the Recognised Graduate (Subclass 476) and Temporary Graduate (Subclass 485) visa programmes.
What does the change mean? The changes represent a more flexible approach in dealing with English-language requirements, a change that will be welcomed by employers and visa applicants for these subclasses.
Business impact: The changes should have a positive impact on business, as high-skilled foreign nationals will have more options for satisfying English-language requirements before beginning work in Australia.
Background: The changes are part of Australia’s efforts to overhaul the Subclass 457 visa programme.
As of 18 April, an average score of 5 across the four competencies of the International English Language Testing System (IELTS) – listening, reading, speaking and writing – will count as passing. Under old rules, a score of at least 5 in each category was required. A minimum score of 4.5 in each of the categories will still be mandated.
Besides the IELTS test, authorities will also accept the Occupational English Test (OET), the Test of English as a Foreign Language internet-based test (TOEFL iBT), the Pearson Test of English Academic (PTE) and the Cambridge English: Advanced test (CAE) (for tests undertaken after 1 January 2015). Passing scores are as follows:
Source: Australian Government.
The Australian Government will exempt Subclass 457 applicants who can prove they have five cumulative years of full-time study at the secondary or tertiary level where instruction was delivered in English, whereas previously applicants had to demonstrate five consecutive years of full-time study. Those who will earn a base salary of A$96,400 per year will also be exempted from formal English-language testing.
Other changes that became effective 18 April 2015 touched on the Recognised Graduate visa (Subclass 476) and Temporary Graduate visa (Subclass 485) programmes. In these two subclasses, an average IELTS score of 6 (or the equivalent on another acceptable test) across all four competencies will count as passing, so long as the applicant does not score lower than IELTS 5 (or the equivalent on another acceptable test) on any individual competency. Previously, applicants had to score at least an IELTS 6 in each category.
BAL Analysis: The new testing requirements will provide greater flexibility for those migrating to Australia on Subclass 457 and other visas. The changes to the testing programme – along with the broader Subclass 457 overhaul – are welcome news to Australian employers.