This article provides a comprehensive guide on the process, documents, and requirements for entrepreneurs who wish to immigrate to Australia through their business. It explores the option of purchasing and justifying a company as a means of migration for businessmen to Australia.
Article structure:
Business Immigration to Australia: Requirements and Process
Business immigration to Australia is a strictly regulated process controlled by the state or territory in which the entrepreneur intends to conduct their business. The process involves three main steps:
- Submitting an Expression of Interest (EOI) through the SkillSelect system to participate in the candidate selection process.
- If the application is approved, obtaining a Business Innovation and Investment subclass 188 visa, which is a temporary visa valid for 5 years.
- After 4 years of successful business operation, applying for a permanent Business Innovation and Investment subclass 888 visa.
The state government has an economic development plan and quota for the number of business applications they can approve each year. To qualify for business immigration, a foreign entrepreneur must present a project that is of interest to the state or territory.
The Business Innovation & Investment (Residence) program is designed for applicants whose applications are approved by the state government. It offers temporary business visas that provide a temporary residence permit (TRP) for a period of 5 years.
The following are the types of Business Innovation and Investment subclass 188 visas:
- 188A (Entrepreneur Visa): For individuals who have an ownership stake in a business in their home country and wish to establish a new business or develop an existing one in Australia.
- 188B (Investor Visa): For investors who want to make targeted investments in the state/territory’s economy.
- 188C (Significant Investor Visa): For those who wish to invest in the economy with at least AUD 5 million.
- 188D (Premium Investor Visa): Closed as of July 1, 2021.
- 188E (Innovation Visa): For businesspeople with innovative ideas and third-party financial support.
It is important to note that the 188 visa category is valid for 5 years, whereas prior to July 1, 2021, it was only valid for 4 years.
After running their business or investment for four years in the Australian economy, the applicant may apply for a permanent visa under the Business Innovation and Investment (Permanent) – BIIP 888 program. Applicants can reside either in Australia or overseas while applying for this permanent visa.
To qualify for the permanent visa subclass 888, applicants must have a Business Innovation and Investment subclass 188 visa and meet the requirements of the program. They can also apply if they have a Special Category Visa (subclass 444) or a Business Long Stay Visa (subclass 457IE) and meet the program’s requirements.
Business visas subclass 444 are designed for entrepreneurs from New Zealand. The subclass 132 A/B business visa stream, intended for business talent, was closed by the Australian Department of Home Affairs as of July 1, 2021. Applications for this stream are not accepted anymore, but those submitted before will be processed as usual. Subclass 457 visas are intended for the migration of highly skilled professionals. They immigrate to the country at the request of an employer approved by the state government.
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Visa type Requirements
A 188 A
- ownership of a business with a turnover of at least AUD 750,000 in 2 out of the last 4 financial years;
- possession of personal and business assets worth at least AUD 1.25 million;
- age: less than 55 years;
- a pass mark in the Business Innovation and Investment Points test: at least 65;
- a successful business career.
888
- the applicant has been in Australia on a 188A visa for at least 12 months, within 2 years before applying for an 888 visa;
- ownership and management of a business with an annual turnover of AUD 300,000 in Australia for at least 2 years before applying for the visa;
- employment of 2 Australian employees;
- possession of personal and business assets worth at least AUD 600,000.
B 188 B
possession of personal or business assets worth at least AUD 2.25 million in the last 2 financial years;
- age: less than 55 years;
- 3 years of business leadership experience;
- investment in state bonds worth AUD 1.5 million before the visa is granted;
- managed a business in which they owned 10% of shares or managed investments worth at least AUD 1.5 million for at least one of the last 5 years.
888
- the applicant has been in Australia on a 188A visa for at least 2 years, within 4 years before applying for the visa;
- invested in state or territory bonds in the last 4 years.
C 188 C
If the entrepreneur is invited to apply, they must make investments worth at least AUD 5 million. They need to be invested in proportions:
- at least AUD 1 million in venture capital funds that invest in startups;
- at least AUD 1.5 million in emerging companies.
888
The applicant must spend 40 days per year in Australia on a significant investor visa for the last 4 years and receive sponsorship from an Australian state or territory government.
Registering a Company in Australia
Every country has its own legal requirements for foreign citizens who wish to start a business within their borders, and Australia is no exception. If a businessman is not a resident, they will need a resident director – someone with Australian citizenship. Private companies require one resident director, while public companies require three. A resident director acts as an intermediary between the foreign entrepreneur and the Australian government.
Here is the registration process:
- Develop the company’s structure and name, then register it with the Australian Securities and Investments Commission (ASIC).
- Apply for an Australian Business Number (ABN), an eleven-digit identifier used by government agencies. The commercial registry issues it. Obtaining an ABN is mandatory; without it, you cannot send or receive invoices.
- Obtain a Tax File Number (TFN), which is assigned to individuals and organizations.
- Register for GST (Goods and Services Tax).
- Open a bank account.
- Apply for any licenses or permits required for your business.
Acquiring an Established Company
Purchasing a business in Australia is a feasible option, but there are certain nuances to consider. Firstly, Australia invites foreign entrepreneurs through the “Business Innovation and Investment” program, which is interested in those who offer innovations that would benefit the region’s economy or those who invest in funds that are deemed worthwhile. Consequently, purchasing a company does not fall under this visa program and will not be considered an “investment in the regional economy.”
Secondly, companies are sold by people who have grown tired of their business. It could be that the individual has lost interest in the industry or that the business is not generating a profit. Such companies are sold through specialized websites under the category “business for sale.” The contact person’s phone number is usually listed in the firm or business description. Arrange a meeting to discuss the details of the deal.
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The cost of the transaction is the profit received by the seller from their business multiplied by 1-5. For instance, if a company is sold for $100,000, the owner’s profit is around $20,000 to $40,000, or slightly more. If the buyer has experience working with financial documents, they can request the seller to present Business Activity Statements, an equivalent to local financial reporting. It is worth noting that the amount advertised is not the final price but a starting point for negotiation.
To verify the purchase for financial issues, it is advisable for the buyer to engage a legal firm in Australia to oversee the transaction. When purchasing a business, it is important for the entrepreneur to understand the industry’s peculiarities and have a grasp of how to improve the acquisition to accelerate profitability.
Popular business sectors in Australia
The following types of businesses are most commonly sold in Australia:
- small retail shops
- petrol stations with small shops
- laundromats
- dry cleaners
- repair shops
Australians themselves believe that computer and electronic sales, medical equipment and pharmaceuticals, precious metals, and mineral fuels including oil and its products, sell well in the country, but these types of companies are rarely sold.
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Advantages of business immigration to Australia 25% of Australia’s population are non-Australian citizens, indicating that the flow of immigrants to the country is significant. This means that there are many advantages to moving to Australia for business purposes, including:
-unrestricted employment rights for the business owner’s family members, regardless of the type of business visa;
-flexible temporary entry mechanism (no need to stay in Australia permanently);
-the opportunity to obtain permanent residency after 4 years;
-free treatment at public hospitals;
-access to the social security system.
