The Australian government's changes to the Business Innovation and Investment Program will nurture more early and seed stage start-ups in Australia.
Executive Chairman of leading wealth manager Atlas Advisors Australia, Guy Hedley said the changes would have significant positive effects on Australian business and the economy.
The government's changes include a revamp of the Significant Investor Visa and Investor Visa programs under which wealthy applicants can migrate to Australia while committing significant funds to the growth of our economy.
The complying investment framework has been revised with an increase in the allocation of investment towards venture capital from 10 per cent to 20 per cent and a further 30 per cent to emerging small cap listed companies.
"The government has listened to calls by Atlas Advisors Australia for an increase in allocated funds towards venture capital," Mr Hedley said.
"These changes will be key to Australia's competitiveness in attracting wealth and investment from prominent businesspeople in Hong Kong and other destinations.
"Wealthy and highly experienced migrant businesspeople are keen to provide the investment and expertise Australia needs to help build local businesses, industries and employment."
Mr Hedley said while later stage venture capital appeared to be performing soundly, seed stage venture capital was struggling for survival.
Statistics show the number of seed-stage funding deals in Australia have declined from around $320 million in 2016-17 to $120 million in 2018-19.
"These changes mean ailing startups can look forward to a renewed future and the possibility of attracting serious investment and expertise to help them drive growth and innovation," Mr Hedley said.
"Combined with the fast-tracking of 5000 people a year for permanent residency under the Global Talent and Temporary Activity visa, these changes will create better incentives to attract people with unique expertise and experience to Australia."
The BIIP provides a significant opportunity for Australia to fill gaps in lost capital as a result of COVID-19 related falls in immigration, Mr Hedley said.
"Providing greater incentives for a higher proportion of high net worth migrant investors to apply to programs such as the Significant Investor Program will lift Australia's competitiveness on a global scale."
Mr Hedley said requiring funds to provide annual independent audit reports demonstrating compliance with the complying investment framework was unnecessary.
"All fund managers are required to hold an Australian Financial Services License and are already subject to independent audit requirements by the Australian Securities and Investments Commission," he said. "The duplication involved at a fund level is an unnecessary step."
The BIIP has brought more than $16 billion in investment that has assisted the growth of industries and jobs.
About Atlas Advisors Australia
Atlas Advisors Australia is a leading funds manager and investment advisory business, operating between China and Australia offering a wide range of financial services and wealth management solutions. With operations in Sydney and Melbourne in Australia and Shanghai in China, we are able to support investors in all China and Australia locations.
