11 Oct 2019
Are you thinking of buying a business to secure permanent residency in Australia? In Australia, business visa subclasses is often shrouded with misconceptions and misinformation, unlike some of the other visa sub-classes to permanent residency. But for eligible candidates, buying or starting a business is an excellent pathway to residency but many potential Clients are unfamiliar with this visa. Every day, I would get at least 5 enquiries that go like this: Client: If I start a business or purchase a business in Australia, I can definitely get Permanent Residency (PR) right? Me: Unfortunately, it is not that simple. (Tries to explain) Look… Client: (Impatiently cuts me off) What do you mean? I am willing to invest AUD 1 million to start or buy a business. That is a lot of money! Me: I understand and agree with you. However, the requirements of this visa are as follows… (begins my explanation) At this point, I can visualise other immigration experts giving me imaginary high-fives or the familiar nods of empathy. Akin to a recurring déjà vu, the above scenario has compelled me to explain the 6 common myths of the seemingly illusive Business visa Subclass 188A. So here goes:
Myth Number One
There Is No Age Requirement.
Client: I am 60 years-old and I want to apply for the business innovation visa.
Truth: Applicants must be below 55 years of age. However you may still qualify for this visa only if you can prove exceptional economic benefits such as: 1) Bringing a new technology or expertise into Australia (For example: Google/Apple) 2) Generating high volumes of new jobs or skilled jobs 3) Greatly developing the business activity in a regional area 4) Significantly increasing the revenue generation in other sectors
Not too young and not too old. There is typically an age requirement to the Business Visa Subclass 188A. Photo: Pixabay.com
Myth Number Two
There Is No Business Turnover Requirement.
Client: I have owned a business for 10 years. Surely, I can apply for this visa?
Truth: For 2 out of the last 4 fiscal years, your business must have at least AUD 500,000 annual turnover in both years. This means that some small businesses would not be able to meet this requirement regardless of how long they have been operating. The business also needs to be a qualifying business meaning that it has to provide goods or services rather than simply import or export. Moreover, if your business met the requirements 5 years ago but not in 2 out of the last 4 years, the turnover requirement would not be met.
Not all small business qualify for the Business Visa 188A. A business must meet AUD$500K annual turnover in 2 of the last 4 years. Photo: Pixabay.com
Myth Number Three
Any Ownership Shareholding Is Sufficient. Client: I own 25% of the business and the annual turnover meets AUD 500,000. This shareholding should be sufficient? Truth: You are required to own: 1) 51% if the business has an annual turnover of less than AUD 400 000; or 2) 30% if the business has an annual turnover of more than AUD 400 000; or 3) 10% if the business is a publicly listed company Here, I would like to draw your attention to a business which has an annual turnover of less than AUD 400,000 (you might be thinking, “but this does not meet the turnover requirement that you mentioned above!”). You are partially right but this visa allows an applicant to nominate 2 of their main businesses. Therefore, a combined annual turnover of both businesses can be used to satisfy the turnover requirement.
Myth Number Four
A Loss-Making Business Does Not Qualify. Client: I meet all the requirements above but my business suffered a loss in 2 out of the last 4 years. Does this mean I cannot apply for this visa? Truth: Applicants need to satisfy the requirement of an overall successful business career and the Australian Department of Immigration and Border Protection (DIBP) will consider the business’s overall profit/loss. Fortunately the good news is that losses in some years could be attributed to depreciation of assets, restructuring of business or marketing expenses which are justifiable and will be accepted by the Department of Immigration along with documentation evidence.
Myth Number Five
No Net Business Or Personal Assets Requirement + Liquidated Funds Must Be Transferred Immediately. Client: Most of my assets are in the business and I am not ready to liquidate it. Truth: At the time of invitation, you and your partner must prove net business and personal assets of at least AUD 800,000 that are lawfully acquired. You will also need to show approximately AUD 300,000 to AUD 500,000 which are available for transfer to Australia within 2 years of the visa grant, depending on the Australian State that you wish to obtain residency for. Therefore, if you apply for this visa, we recommend that you have enough liquidated funds to be transferrable to Australia for residential and business purposes.
Myth Number Six
The Route To Permanent Residency Is 100% Assured.
Client: Once I get this visa, it is just a matter of time before I get PR.
Truth: The 188A visa is a 4-year temporary residence (TR) visa.
Once granted, the applicant must set up or purchase a business in the nominating State and PR (Subclass 888) can only be applied for if the Australian business meets the following requirements while on the 188A visa:
1) Satisfy the residency requirement of at least 1 out of 2 years accumulatively (your partner can fulfil this on your behalf)
2) Maintain ownership interest (at least 50%) in the Australian business for 2 years prior to the application, 10% if publicly listed company
3) Meet an annual turnover of at least AUD 300,000 in the Australian business for 12 months prior to the application
4) Demonstrate a genuine desire to maintain a management role in the Australian business
5) Obtain continuous nomination by the nominating State/Territorial Government
6) Satisfy only 2 of the following 3 requirements for 12 months prior to the application: i. Employed at least 2 full-time Australian/New Zealand employees who are not family members in the Australian business; ii. Have net value of at least AUD 600,000 in business and personal assets iii. Have net value of at least AUD 200,000 in the Australian business assets (can be joint with partner)
Having dealt extensively with the 188A visa, I can confidently conclude that these are the most common myths and misconceptions that applicants have regarding Australia's Business Visa SubClass 188A.
In my experience, without professional help, the process itself is likely to be tedious and complex for the applicant because of constant potential changes by the Australian States as well as the Federal Department of Immigration And Border Protection (DIBP).
But there is good news. There is a great deal of subjective assessment and judgement by the Department of Immigration where an experienced immigration lawyer can position your application to maximise your chances of success. Using a business visa lawyer can make the difference.
Remember, you may only have one chance to get this right so the immigration lawyer or specialist assisting you is of paramount importance. You may not get a second chance, and the financial and personal cost of rectifying errors is far more painful than the efforts to get it right the first time.
Your immigration lawyer must be able to:
a. Secure overseas documents and translation that is highly compliance with the Australian Department of Immigration & Bord&r Protection.
b. Prepare professional reports that gets approved the first time
c. Assist with proper funds movement advice with accordance with local and international regulations
d. Provide resources to help you find profitable businesses for sale at the right price. Too many applicants invest in bad businesses causing financial losses.
e. Guide you through the process and secure the Permanent Residency visa at the end.
Foremost, don't assume hearsays are correct. Get the facts from qualified specialists to save you from further troubles later on.
Pak Liu Partner & Principal Migration Agent (MARN: 1911375) LL.B., GDLP
If you wish to speak with Pak at Calibre Migration, simply call +61 3 8766 0675 or email email@example.com
Pak Liu contributed to this post.
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