Home / SIV program gathers pace, $5b inflow tipped

The Significant Investor Visa program is gathering pace with the sector’s first regular publication, SIV Australia, predicting the initiative could generate A$5 billion in capital inflows in its first full year.

David Chin, principal of the publisher Basis Point Consulting, says the publication aims to help Australian funds and businesses to capture opportunities from this new industry.

An inflow of $5 billion is equivalent to one-sixth of the superannuation industry’s net inflows and about half of all of the IPOs in Australia during 2011-2012. This is based on the research firm’s estimate of 1,000 visas per year.

Chin said that a seminar sponsored by the Commonwealth and NSW governments in May showed several interesting facts from the early activity in SIVs:

• Over 93 per cent (160) of the 171 applications lodged to date have been received in the past three months (to mid-May).
• It is expected that most SIV applications will be processed within six-nine months.
• Approximately 90 per cent of SIV EOIs (expressions of interest) recorded an intention to invest in government bonds as their first investment preference. About 5 per cent indicated private companies as their first investment preference, and about 4 per cent in managed funds.
• However, of the 90 per cent who indicated bonds, around 70 per cent want to remain in bonds and 30 per cent wish to also consider other complying investment options.
• 90 per cent of EOIs have been submitted by applicants from the People’s Republic of China.
• 47 per cent of visa applicants wish to invest and reside in NSW, 38 per cent in VIC, 10 per cent in QLD, 3 per cent in WA and 2 per cent in SA.
• The first SIV was granted to a toy manufacturer from China who will reside in Victoria, and will invest in Victorian government bonds.

The publication resides on: www.basispoint.com.au