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Australia Targets China’s Rich With ‘Millionaire’ Visa
2012-11-13
Brief:Australia prepare the Significant Investor Visa scheme for Chinese Millionaire,aimed at attracting the world’s wealthy to make the move and park their money Down Under.
Australia will accept applications under a new program, known as the Significant Investor Visa scheme, aimed at attracting the world’s wealthy to make the move and park their money Down Under. The only catch is that the A$5 million must be invested in state and territory Australian government debt, privately-owned Australian companies and managed funds that invest in Australian assets regulated by the Australian Securities & Investment Commission for four years.

Consultants expect no shortage of takers especially from China, which is seeing an increasing flow of wealthy citizens sending money overseas, investing in assets as diverse as condos in Cyprus, or education for children overseas. A Wall Street Journal analysis of these flows suggests that in the 12 months through September, about US$225 billion headed out of China, equivalent to about 3% of the nation’s economic output last year.

PwC said it’s estimated that, in China alone, there are over 60,000 “super rich” individuals who have more than A$16 million in assets, and something like over a million millionaires.

But rules in China that prevent individuals or businesses from moving money across its borders add another layer of complication for Chinese wishing to apply for the new Aussie wealth visa. Chinese individuals aren’t allowed to move more than $50,000 per year out of the country. Chinese companies can exchange yuan for foreign currencies only for approved business purposes, such as paying for imports or approved foreign investments.

Financial advisers say these rules are easily circumvented already by China’s wealthy. Methods include physically carrying money out of the country on private jets, or using funds already held in offshore accounts. A note on the website of the Australian Department of Immigration & Citizenship says that applicants for the visa must prove the A$5 million has been “lawfully acquired” and is “unencumbered”.

As a sweetener, Australia’s government has cut residency requirements from two years to 160 days over a four-year period, giving business migrants significantly greater flexibility than a decade ago.

"The super-rich money is yet to come out from China,” said Macquarie Private Wealth Division Director Lucinda Chan . Ms. Chan said Macquarie is already experiencing strong demand from predominantly Chinese nationals seeking financial planning and investing advice related to visa applications.

Deloitte estimates that Australia’s government will issue up to 700 visas a year for wealthy individuals with A$5 million to park.
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