In August 2022 the States and Territories were only given a total of 810 allocations for 188 visas. All states and territories aside from Move to South Ausralia have now run out of business visa allocations.
On 8 December 2022, the Migration Program Planning Levels for 2022-2023 were released.
Unfortunately, the Federal Government did not allocate any more places to any of the states/territories for Business Investment Visa 188.
So with no state nominations available, the Federal Government has effectively closed the 188 visa for this migration year, up until the 30 June 2023.
This is a type of stealth closure, without an announcement by the Federal Government, but with the same effect.
The 188 visa is called the Business Innovation and Investment Program (BIIP).
There are four streams of the 188 visa:
- Business Innovation stream- 188a Visa - for succesful busines owners.
- Investor stream-2.5 million Investment Visa 188B Australia
- Significant Investor stream- 5 Million Investment Visa Australia - Visa 188C SIV
- Entrepreneur stream- Visa 188E Australia. This visa stream lets you carry out entrepreneurial activities in Australia. You can stay for up to 5 years .
Each stream requires that the applicant to obtain state nomination before lodging a visa.
With no further allocations available to the states from the Federal Government, the 188 has been effectivly closed up until 1 July 2023.
How did the news break about the closure of 188 visas?
The Federal Government has not publicly announced the closure of the business programs.
It has been left to the states to make announcements in relation to running out of allocation and then not being given any more.
The 188-visa allocation story so far this 2022 to 2023 program Year
So far this year the Federal Government gave 810 allocations, divided between all the States and Territories.
The States and Territories and many potential applicants were eagerly awaiting further allocations.
On 21 December 2022, Move to South Australia confirmed its final nomination allocation for business visas remained at 70 places for this program year ending 30 June 2023. Hence, it closed the nomination to Investor Stream (188B) and Significant Investor Stream (188C). There are a very limited number of places available for Business Innovation Stream (188A) (closing on 31 January 2023) and Entrepreneur Stream (188E).
In the meantime, New South Wales, Victoria, Queensland, West Australia, and Australian Capital Territory are closed for this program year due to reaching out the allocation of places.
How many Business Visa Allocations were planned for 2022 to 2023? What happens to unused allocations?
There was a planning level of 5,000 places for Business Innovation and Investment visas at the beginning.
The 188 Business Investment visa has been a very popular visa stream in Australia which attracts a lot of high net-worth people from around the world.
The last 2021-22 planning level for Business and Investment Visa was 13,500 places.
This year, the Federal Government has only sent out 810 allocations for all states and territories.
It means almost 4,200 places will be left unused this year.
There is no official announcement on how the Australian Government will be using these places for.
However, with the current biggest invitation round in the history of 189 Visa (35,000 invitations in December), the unused places could be sent to skilled visa streams to address skills shortages.
What are the reasons for the Federal Government closing the 188 visa?
The Australian federal government has started a review process for the Australian migration program. submissions were due by the 15th Of December.
It appears that the federal government has already made its mind up in relation to the direction that the Australian migration program will take, by the closing of business investor and entrepreneur visas.
This could be due to the influence of the Grattan Institute, which has published a paper, claiming that business migrants pay less tax over their lifetime than skilled visa migrant workers.
The Grattan Institute is in favor of abolishing the Business Innovation and Investment program (BIIP) on the basis that applicants for these visas tend to be older, and they claim earn lower incomes and cost more in health services.
Please refer to ‘The $119 billion free lunch’ by Brendan Coates, Tyler Reysenbach by this link
The Busines Visa program was introduced by the Labor Gillard government in 2012. But more recently Federal Home Affairs Minister Clare O'Neil has criticised the BIIP program.
She indicated:” It is a visa program (Significant Investor Visa) that I think isn’t adding value to the country and it’s something that we will be looking at”
She also said: “At the moment, I can’t see a lot of reasons to maintain it as part of our program.”
As this program year only has 6 months left, we think that the Federal Government is trying to focus its 100% effort on the skills shortages rather than business and investment visas.
Skilled workers are in high demand, especially those in Agriculture, Hospitality and Healthcare.
Australian Business and Significant Investor Visas Subclass 188 Closed - New Visa Expected in 2024! Read more here!
What other options are available? Are these other options suitable?
188 visa potential applicants may consider other visa options, for example,
- Global Talent Visa
- General Skilled Visa
- Employer Sponsored Visa
- Family Visa – Partner Visa, Parent Visa
However, many of those that were planning for a 188 visa might not be in a position to meet the requirements for these other visa options.
The employer sponsored and general skilled visas have higher English and lower age requirements.
Parent visas are very slow to be processed and rely on the applicant having at least half of their children in Australia as holders of Australian PR or Citizenship.
So in many cases, unfortunately, those that would have applied for a 188 Business or Investor visa might struggle to meet the criterai for other visas.
Comments by Immigration Lawyer, Chris Johnston
The closure of the business visa 188 has left many potential applicants frustrated and the states with interested applicants but with no nominations.
We understand this is very difficult for many applicants who are planning a 188, with the allocation of 5000 not being reached.
Hopefully, more allocations will be available in the new financial year starting 1 July 2023.
We suggest that the Grattan Institute’s model does not measure all the far-reaching benefits that flow from business migrants.
The Grattan Institute has failed to measure all the income generated by the visa holder, does not measure the benefit of the investment on Australian employment, property developments, Australia exports or business activity and does not offset the effect of private health cover which almost all business and investor visa holders have on the costs side of the equation.
The benefits of business migrants can be seen in an example published in an article in LinkedIn by Luke Headland from Investment Migration Industry Group (IMIG):
"Case Study of SIV visa holder 1:
SIV Complying Investment $ 5,000,000.00
Additional capital brought to Australia $ 15,000,000.00
Investments remaining home country $8,000,000.00
Total investment capital $28,000,000.00
Income from SIV complying investment $337,000.00
Income from business employment activity in Aus $250,000.00
Income from additional Aus investments $360,000.00
Total Australian sourced income $947,000.00"
As we can see, there may be a few taxes associated with this visa holder:
- Income tax
- Capital gains taxes on the re-balancing of investments
There are many tax payments and expenditure not measured by Grattan, including high international student fee rates and luxury family home with double the level of stamp duty.
I have also observed that business migrants often invest much more in Australia through upgrading businesses and buying extra businesses, than is required to get a visa.
My view is that the Grattan Institutes figures used to criticise business visas are flawed, as they:
- do not measure all the forms of tax income from SIV holders, effectivey underestimateing the income SIV holders generate for the government.
- overestimate the health costs, as almost all SIV holders have private health insurance.
It is also important to note that by closing the 188 visa, the Government is closing all four streams.
This means the government is closing to business innovation applicants or the 188A. This is a visa that is for successful overseas business owners, which are required to establish or buy an Australian business, and to successfully operate the business for at least two years.
This means the government is closing the Entrepreneur visa or the 188E, which is aimed at promoting Entrepreneurs to move to Australia and to start new and exciting businesses.
Australia is lagging further and further behind in relation to attracting innovation. Many other countries have now put in place digital nomad visas, which are designed to attract young people that have online and remote businesses.
Australia has closed the Entrepreneur visa and does not have a Digital Nomad visa.
I am concerned that while the Minister for Home Affairs has made some negative comments about the 188 SIV visa, the recent measures of failing to give out allocations to the states, are closing all four business visa streams.
It is hard to believe that Australia does not want high net worth business owner migrants, investors or entrepreneurs?
Most State and Territory governments have been supportive of business, investor and entrepreneurs visas. Different states have varying focusses based on their states characteristics.
As the centres for big business in Australia, NSW and Victoria have favoured the Significant Investor Visas.
South Australia Visa 188 Program has supported business visas for SA exports and property development and entrepreneur visas to innovation and new industries.
Queensland has been involved in all types of business and investor visas.
The State Governments of Australia are usually keen for high net worth business owners, investors and entrepreneurs.
Does the government modeling include the stamp duty from property purchases (nope a state tax) or the benefits of state based exports, property developments and business expansions (nope, all benefiting states and not measured by the Grattan Institute). Not to mention that the Grattan Institute's policy of huge GSM numbers straight to PR on a 189 will deliver all the migrants to Melbourne and Sydney, putting infrastructure under pressure and with no benefit to other states and territories).
So when I say Australia, it really means the Federal Government does not want high net worth business and investor visa applicants.
Why not reform the 188 visa rather than totally cut it?
The Federal Government could reform the 188 visa, to reduce age concessions, for example, if worried about aging migrants. But it seems they might be searching for that Djokovic moment, for some popularist migration related publicity. Cutting visas for wealthy people and those pesky influencer gen Z entrepreneurs.
More about the Business Visa Australia Agents and Lawyers at Work Visa Lawyers
With rapid changes in the migration policy in Australia and this unstable period, having a someone, who is specialized in the field, with you on your Business Investor Visa journey would be the best way to start.
Understanding the difficulties in choosing the best Australian Business Visa options, Business Visa 188 Agents and Lawyers team at Work Visa Lawyers has strong immigration knowledge and committed to keep updating our website and Business Innovation and Investment news in Australia.
Work Visa Lawyers ® is a migration firm founded by Lawyer Chris Johnston in 2011. Our team is focused on providing quality immigration services to our clients, wherever they are in the world. We speak English, Mandarin, Cantonese, Punjabi, Hindi, Tagalog (Filipino), Portuguese and Vietnamese.
We can help you with the Business Innovation and Investment (Provisional) visa (subclass 188) for the following four streams and Global Talent Visa:
- 188A visa - Business Innovation stream
- 188B visa - Investor stream
- 188C visa - Significant Investor stream SIV
- 188E visa - Entrepreneur stream
- 858 Visa – Global Talent Visa
We are experts in Business and Investor Visas 188 and Global Talent Visa 858 in Australia. We help overseas business owners, investors to create a new life in Australia with their family much faster through those visa streams.
Like Headland from Investment Migration Industry Group : https://www.linkedin.com/pulse/significant-investor-visa-economic-benefits-australia-luke-headland-%3FtrackingId=RSh3gNd6SfqK%252BAGqwbFMiA%253D%253D/?trackingId=L43kMQg1RTSOibkKU2mXPw%3D%3D