What Australia’s ‘golden visa’ reversal means for rich investors

The Australian government has declared the necessity to abolish the ‘golden visa’ programme, which permitted affluent investors unrestricted entry into the country upon meeting a quota of about £2.6 million.

The government points to the infiltration of illicit funds into the system, attributing it to the criteria considered before granting individuals the privilege of the said visa.

In a statement made by Australia’s Minister for Home Affairs, Clare O’Neil, on Monday, she underscored that the ‘golden visa’ policy is proving detrimental rather than beneficial to the country.

“It has been obvious for years that this visa is not delivering what our country and economy needs,” Clare O’Neil said in a statement.

Instead, the government is exploring the possibility of issuing visas to skilled applicants from other nations, encouraging them to contribute their expertise to foster the growth of the country.

The programme has issued thousands of Significant Investor Visas (SIV) since its inception in 2012. Government data indicates that 85% of the approved applicants have originated from China.

Promoted as a means to attract foreign investment and ignite innovation, individuals were required to make investments exceeding £2.6 million in Australia to qualify.

However, in 2016, a government investigation expressed worries about its susceptibility to “money laundering and other illicit activities.”

Meanwhile, in 2022, The Australian newspaper disclosed that individuals associated with Cambodia’s Hun Sen regime were among those exploiting the system.

Australia reversing or modifying its ‘golden visa’ policies could impact wealthy investors who were considering or have already invested in the country through such programmes.

It means that wealthy overseas investors who want to gain residency in the country will no longer be able to do so by investing $5 million in Australia.

Some of them may lose their chance to obtain Australian residency or have to wait longer or pay more for alternative visa options. Some of them may also face legal or financial consequences if they are found to have used the SIV scheme to launder money or evade taxes.

On the other hand, some of them may benefit from the new skilled-worker visas, if they have the qualifications and experience that Australia needs.

“For far too long corrupt officials and kleptocrats have used golden visas as a vehicle to park their illicit funds in Australia and arguably hide their proceeds of crime,” welcomed Clancy Moore, the chief executive of Transparency International Australia.

A ‘golden visa’ is typically a residence-by-investment programme offered by certain countries to attract wealthy individuals, investors, and entrepreneurs. It allows foreign nationals to obtain residency or citizenship by making a substantial investment in the host country. These programmes vary widely from one country to another, with different investment requirements, benefits, and conditions.

Australia has followed in the footsteps of the UK, which discontinued a programme granting expedited residency to ultra-wealthy individuals in 2022. The decision in the UK was prompted by apprehensions about the potential influx of illicit Russian funds.