Designated Investment

Making a Designated Investment

The Designated Investments offered by State/Territory Treasury Corporations are:

• Primary-issue government securities with a maturity of no less than 4 years from the date of purchase
• Limited to investments of AUD750,000 with interest paid every 6 months
• Non-transferable and non-redeemable (that is, the security cannot be sold to another investor or sold back to the issuing authority before maturity)

Repayment of principal on maturity is guaranteed by the State/Territory government issuing the security.

Taxation obligations

Income you earn from your investment in Australia will have 10% withholding tax automatically deducted from the interest earned on your Designated Investment until you provide an Australian tax file number and evidence of your status to the agency in which you have made your investment.

The Australian Taxation Office (ATO) advises people arriving in Australia for the first time as business entrants to contact the ATO and apply for a tax file number.

When and how to make a Designated Investment

To make a Designated Investment you should contact the State/Territory Treasury Corporation that is sponsoring you. They will forward current information on the terms and conditions and an investment application form and instructions on how to lodge a Designated Investment in their State/Territory.

At the initial enquiry stage, the Treasury Corporation can only indicate the likely rate of return on a proposed investment. The actual rate of return on your investment will be set when you deposit your funds in the Designated Investment. Interest rates change regularly and may differ between State/Territory Treasury Corporations.

Note: You should not make a Designated Investment until you are advised in writing to do so by the office processing your application.
(The letter of advice will also include 1031 Declaration, Part 1, which will have been completed by the department's officer assessing your application. You should submit form 1031 to the selected agency.) You should select only one of the listed agencies.

The next step is to complete the investment application form and Part 2 of form 1031. Both forms should be sent to the postal address of the relevant Treasury Corporation.

Your Designated Investment must be made in time for you to enter Australia before expiry of your health and character clearances. Information on health and character clearances may be obtained from the office processing your application.

Note: Funds used to finance your Designated Investment must be personally owned and unencumbered and must have been legally accumulated as a result of your business and/or investment activities.

Individual State/Territory agencies will provide advice on procedures to transfer your funds to the Designated Investment. The funds must be in Australian dollars.

On receiving your funds, the stock issuing authority will send you a letter or certificate to acknowledge receipt. That agency will also complete Part 3 of 1031 and send it to the office processing your application. Funds can be deposited in a Designated Investment in your name or in your name and the name of your partner. One the investment is made, funds cannot be withdrawn before the four year term has expired, except in exceptional circumstances.

Your visa can be cancelled if the funds are withdrawn from the Designated Investment before the four year term expires.