Business Migration Amendments wef 19 April

[George Lombard]

Just announced today to take effect Monday:

 

In particular, the Regulations:

• remove a criterion providing that an applicant may be eligible for the Subclass 163

(State/Territory Sponsored Business Owner (Provisional)) visa on the basis that

they are a “senior manager” to address integrity issues with the caseload;

• specify different values of business ownership interest required to be satisfied by

certain business skills visa applicants according to the size of the business and the

type of company that operates the business; and

• increase the amount of the net value of assets required to be satisfied by certain

business skills visa applicants to ensure these amounts reflect current business

establishment and living costs in Australia.

 

Full details below (including transitional arrangements designed to protect applicants in Australia):

 

ATTACHMENT

Details of the Migration Amendment Regulations 2010 (No. 3)

Regulation 1 – Name of Regulations

This regulation provides that the title of the Regulations is the Migration Amendment

Regulations 2010 (No. 3).

Regulation 2 – Commencement

This regulation provides for the Regulations to commence on 19 April 2010.

Regulation 3 – Amendment of Migration Regulations 1994

Subregulation 3(1) provides that Schedule 1 amends the Migration Regulations 1994 (the

Principal Regulations).

Subregulation 3(2) provides that subject to subregulation 3(3), the amendments made by

Schedule 1 apply in relation to an application for a visa made on or after the day on which

the Regulations commence.

Subregulation 3(3) provides that the amendment made by item [1] of Schedule 1 does not

apply in relation to an application for a visa if:

• the applicant applies for:

o a Business Skills - Established Business (Residence) (Class BH) visa; or

o a Business Skills (Residence) (Class DF) visa, on the basis of seeking to

satisfy the primary criteria for the grant of a Subclass 890 (Business Owner)

visa or a Subclass 892 (State/Territory Sponsored Business Owner) visa; and

• the applicant held a temporary visa immediately before the commencement of these

Regulations; and

• the applicant purchased an ownership interest (within the meaning of the Migration

Regulations 1994) in a business in Australia:

o before the commencement of these Regulations; and

o while the applicant held the temporary visa.

This subregulation ensures that applicants who hold a temporary visa that provides a

pathway to the Business Skills - Established Business (Residence) (Class BH) visa, the

Subclass 890 (Business Owner) or the Subclass 892 (State/Territory Sponsored Business

Owner) visa are not adversely affected by the amendment made by item [1] of Schedule 1

below. The provision ensures that the current business ownership value of 10 percent will

continue to apply to temporary visa holders who have already purchased an ownership

interest in a business as the holder of the temporary visa and then seek to satisfy the criteria

for a permanent business skills visa, regardless of whether the business is operated by a

publicly listed company.

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Schedule 1 – Amendments

Item [1] – Paragraph 1.11(1)©

This item substitutes a new paragraph 1.11(1)© in Division 1.2 of Part 1 to the Principal

Regulations.

Regulation 1.11 currently provides, among other things, that for the purposes of the Principal

Regulations that a business is a “main business” in relation to an applicant for a visa if the

applicant has, or has had, an ownership interest in the business of a value of at least

10 percent of the total value of the business.

Substituted paragraph 1.11(1)© provides that, for the purposes of the Principal Regulations,

a business is a “main business” in relation to an applicant for a visa if, among other things,

the value of the applicant’s ownership interest, or the total value of the ownership interests of

the applicant and the applicant’s spouse or de facto partner, in the business is or was:

• if the business is operated by a publicly listed company – at least 10 percent of the

total value of the business; or

• if the business is not operated by a publicly listed company; and the annual

turnover of the business is at least AUD400 000 – at least 30 percent of the total

value of the business; or

• if the business is not operated by a publicly listed company; and the annual

turnover of the business is less than AUD400 000 – at least 51 percent of the total

value of the business.

The purpose of the amendment is to ensure that where the business is not operated by a

publicly listed company, the applicant must own a substantial or controlling interest in a

business. The increase in certain ownership percentages is to limit applicants from passively

investing in businesses or swapping ownership with other business migrants for visa

purposes. This aims to improve the integrity of the business skills visa program. The

ownership percentages developed in consultation with the state and territory governments

that sponsor the majority of applicants.

Item [2] – Schedule 2, paragraph 160.214(1)(a)

This item substitutes the amount of “AUD500 000” with “AUD800 000” in paragraph

160.214(1)(a) of Division 160.2 of Part 160 of Schedule 2 to the Principal Regulations.

Paragraph 160.214(1)(a) currently provides that to be eligible for the grant of a Subclass 160

(Business Owner) (Provisional) visa, the business and personal assets of the applicant, the

applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto

partner together, must have a net value of at least $500,000.

The amendment requires that the business and personal assets of the applicant, the applicant’s

spouse or de facto partner, or the applicant and his or her spouse or de facto partner together,

must have a net value of at least $800,000.

The purpose of the amendment is to ensure that the net value of the business and personal

assets an applicant is required to have to satisfy the criterion is consistent with current living

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and business establishment costs. The current amount of $500,000 was set in March 2003

and living and business establishment costs have significantly increased since that time. The

new amount was arrived at by factoring in the increase in the cost of living, median house

prices and business establishment costs, and was developed in consultation with the state and

territory governments that sponsor the majority of applicants.

Item [3] – Schedule 2, paragraph 161.213(1)(a)

This item substitutes the amount of “AUD500 000” with “AUD800 000” in paragraph

161.213(1)(a) in Division 161.2 of Part 161 of Schedule 2 to the Principal Regulations.

Paragraph 161.213(1)(a) currently provides that to be eligible for the grant of a Subclass 161

(Senior Executive) (Provisional) visa, the business and personal assets of the applicant, the

applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto

partner together, must have a net value of at least $500,000.

The amendment requires that the business and personal assets of the applicant, the applicant’s

spouse or de facto partner, or the applicant and his or her spouse or de facto partner together,

must have a net value of at least $800,000.

The purpose of the amendment is to ensure that the net value of the business and personal

assets an applicant is required to have to satisfy the criterion is consistent with current living

and business establishment costs. The current amount of $500,000 was set in March 2003

and living and business establishment costs have significantly increased since that time. The

new amount was arrived at by factoring in the increase in the cost of living, median house

prices and business establishment costs, and was developed in consultation with the state and

territory government that sponsor the majority of applicants.

Item [4] – Schedule 2, clause 163.111, except the notes

This item omits clause 163.111, except the notes, from Division 163.1 of Part 163 of

Schedule 2 to the Principal Regulations.

Clause 163.111 currently defines “senior manager” for the purposes of Part 163 of

Schedule 2 to the Principal Regulations.

This amendment is consequential to item [5] of this Schedule, which omits the criterion

relating to applicants who are a “senior manager”.

Item [5] – Schedule 2, clause 163.212

This item substitutes clause 163.212 with a new clause 163.212 in Division 163.2 of Part 163

of Schedule 2 to the Principal Regulations.

Paragraph 163.212 currently provides that to be eligible for the grant of a Subclass 163

(State/Territory Sponsored Business Owner) (Provisional) visa, the applicant must either (a)

have, for the last two out of four fiscal years, had an ownership interest in a main business

that had an annual turnover of at least $300,000; or (b) be a senior manager.

New clause 163.212 reflects current paragraph 163.212(a) and would provide that the

applicant has, for at least two of the four fiscal years immediately before the application is

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made, had an ownership interest in a main business that had an annual turnover of at least

$300,000.

The amendment removes current paragraph 163.212(b) which provides that, as an alternative

to the requirement in paragraph 163.212(a), the applicant must be a “senior manager”. The

term “senior manager” is defined in clause 163.111 which would also be removed by item [4]

of this Schedule.

The purpose of removing paragraph 163.212(b) relating to a “senior manager” is to aim to

improve the integrity of the business visa program. Currently a “senior manager” of a small

business with little demonstrated skill and experience at senior management level can apply

as a “senior manager” for a Subclass 163 (State/Territory Sponsored Business Owner)

(Provisional) visa. A “senior manager” would instead be encouraged to apply for an

employer sponsored visa (such as the Subclass 856 (Employer Nomination Scheme) visa or

Subclass 857 (Regional Sponsored Migration Scheme) visa) or a business skills visa (such as

a Subclass 161 (Senior Executive) (Provisional) visa or Subclass 164 (State/Territory

Sponsored Senior Executive (Provisional) visa) after this amendment.

Item [6] – Schedule 2, paragraph 163.213(1)(a)

This item substitutes the amount of “AUD250 000” with “AUD$500 000” in paragraph

163.213(1)(a) in Division 163.2 of Part 163 of Schedule 2 to the Principal Regulations.

Paragraph 163.213(1)(a) currently provides that to be eligible for the grant of a Subclass 163

(State/Territory Sponsored Business Owner (Provisional)) visa, the business and personal

assets of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or

her spouse or de facto partner together, must have a net value of at least $250,000 that is

available for the conduct or establishment of a business in Australia.

The amendment requires that the business and personal assets of the applicant, the applicant’s

spouse or de facto partner, or the applicant and his or her spouse or de facto partner together,

must have a net value of at least $500,000 that is available for the conduct or establishment of

a business in Australia.

The purpose of this amendment is to ensure that the net value of the business and personal

assets an applicant must have available for the conduct or establishment of a business in

Australia to satisfy this criterion is consistent with current living and business establishment

costs. The current amount of $250,000 was set in March 2003 and living and business

establishment costs have significantly increased since that time. The new amount was arrived

at by factoring in the increase in the cost of living, median house prices and business

establishment costs, and developed in consultation with the state and territory governments

that sponsor the majority of applicants.

Item [7] – Schedule 2, paragraph 164.213(1)(a)

This item substitutes the amount of “AUD250 000” with “AUD500 000” in paragraph

164.213(1)(a) in Division 164.2 of Part 164 of Schedule 2 to the Principal Regulations.

Paragraph 164.213(1)(a) currently provides that to be eligible for the grant of a Subclass 164

(State/Territory Sponsored Senior Executive (Provisional)) visa, the business and personal

assets of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or

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her spouse or de facto partner together, must have a net value of at least $250,000 that is

available for the conduct or establishment of a business in Australia.

The amendment requires that the business and personal assets of the applicant, the applicant’s

spouse or de facto partner, or the applicant and his or her spouse or de facto partner together,

must have a net value of at least $500,000 that is available for the conduct or establishment of

a business in Australia.

The purpose of this amendment is to ensure that the net value of the business and personal

assets an applicant must have available for the conduct or establishment of a business in

Australia to satisfy this criterion is consistent with current living and business establishment

costs. The current amount of $250,000 was set in March 2003 and living and business

establishment costs have significantly increased since that time. The new amount was arrived

at by factoring in the increase in the cost of living, median house prices and business

establishment costs, and developed in consultation with the state and territory governments

that sponsor the majority of applicants.

[Guest Jamie Smith]

I was trying to simplify this George, pls correct me if I'm wrong.

 

All new applicants for temporary visas 163/4 need to have no less than $500k in net assets

All new applicants for temporary visas 160/1 need to have no less than $800k in net assets

This lift in net assets is bogus. It is supposedly based on things like increases in house prices over the last 7 years but not many people pay cash for a house, and a mortgaged house would only lift this threshold by about $50,000.

 

Anyone who has not yet applied for a 163 visa must now meet the new minimum ownership thresholds for their overseas business:

 

 

• Turnover less than $400,000 must have 51% of shares
  
• Turnover more than $400,000 but not a publicly traded company, minimum 30% of the business
  
• A publicly traded company, minimum 10% of shares
  

 

Anyone running a business that they don't own at least in part will now only be able to apply as Senior Executive and meet the higher business turnover requirements for the business - this will affect a few on turnover but mainly will affect those from places like UAE and Kuwait where foreigners can't own a business so they partner with a local who does nothing but own the business while the foreigners do the work and they split the profits.

 

All they really have in these cases is an employment letter, and often not even that.

 

It will also affect those who have a brother or other family member own the business for any number of reasons while they operate it. I think this indirect family ownership is mainly found in China and Korea, and I think that's where DIAC have problems accepting people's lack of documents for proof.

 

Anyone who has not yet applied for a 160/1/3/4 visa or who already has one but hasn't bought a business in Australia must now meet the new minimum ownership thresholds for the Australian business too:

 

 

• Turnover less than $400,000 must have 51% of shares
  
• Turnover more than $400,000 but not a publicly traded company, minimum 30% of the business
  
• A publicly traded company, minimum 10% of shares
  

 

This is DIAC refining the definition of control of a business, as anyone with 10% of a $4000 week one man sandwich bar is not really in a position to say they control the business. :twitcy:

 

Overall, they have lifted the bar to shake off those who choose to only meet the minimum requirements and those who can only meet the minimum requirements, and also unbudened the DIAC case officers from having to decide if someone owns/owned a business that was in another's name.

 

I have perhaps two candidates who will now have to drop out unless they can table more assets. Fortunately they had not yet signed up as paying clients hence no refunds to shell out.

 

Any agents reading this, maker sure you check your websites for necessary changes to the 7 year old content about business visas.... I'll be spending the weekend rebuilding State Sponsorship Services :realmad:

[Guest MICHAEL POOLE]

hi george can you help me pls i have a sub class prov spon ship visa 163, im still in uk as i havent sold my house yet, i have had my visa valadated in dec, and hope to be there this year . if i have 100% ownership in the business i buy will this change the post for me too . i hope to take more than five hundred thousand dollers in as well but would like to no if the changes will hit me too and will i be informed from daca about this. thanks michael.

[George Lombard]

Hi Michael,

 

Yes your situation seems to be almost covered by the transitional regulations but I would need to check the text of the regulations properly for you. Suggest you get someone to provide advice on this - either your original agent or ourselves - to make sure what your rights and obligations would be.

 

Cheers,

 

George Lombard

[PARBUTTN]

Hi George,

 

Sorry but this is all gobbledy goop to me!! can you just clarify does this affect new applications only or those already lodged awaiting to be granted as well? The $400,000 turnover figure, is this required to be met in your new business in australia or the business you have in uk.

 

many thanks

[Guest Jamie Smith]

I have amended my summary, this may guide you to your answer. But for firm and proper advice you can rely on instead of somewhat anonymous forum content, please consult a properly trained / registered agent.

[Alan Collett]

Go Matilda - Your Gateway to Australia - News

 

Go Matilda precis of the changes.

 

Best regards.

[Alan Collett]

hi george can you help me pls i have a sub class prov spon ship visa 163, im still in uk as i havent sold my house yet, i have had my visa valadated in dec, and hope to be there this year . if i have 100% ownership in the business i buy will this change the post for me too . i hope to take more than five hundred thousand dollers in as well but would like to no if the changes will hit me too and will i be informed from daca about this. thanks michael.

 

Michael,

 

As your 163 visa is already granted and you have not yet acquired an ownership interest in an Australian business your strategy going forwards is to enqure you acquire at least a 51% ownership interest in an Australian business - assuming you will be seeking permanent residency in due course via a subclass 845, 846, 890, or 892 visa application.

 

Best regards.

[Farrukh Zeeshan]

In my understanding ownership of 10/30/51 % shares and minimum annual turnover are 2 different things. According to 163.212 you still need to show an annual turnover of at least A$300,000 and on top of that you need to meet the new minimum ownership threshold as well.

 

Correct me if I'm wrong

[Alan Collett]

Hello Farrukh.

 

This are technical changes. George has provided an extract from the legislation, and I have provided a link to my interpretation.

 

If you are still unclear then - with respect - I suggest that it may be time to take some professional advice.

 

Best regards.

[Farrukh Zeeshan]

Hello Farrukh.

 

This are technical changes. George has provided an extract from the legislation, and I have provided a link to my interpretation.

 

If you are still unclear then - with respect - I suggest that it may be time to take some professional advice.

 

Best regards.

 

Dear Alan with due respect, I was just trying to clarify it a bit further. As Jamie's Post and your clarification is somewhat confusing for some people. I was just trying to say that the annual turnover requirement remains A$300,000 plus with these changes you have to meet the new minimum ownership threshold as well.

 

Have a good weekend.:smile:

[Alan Collett]

If it is still "somewhat confusing" for you then - as I say - it may well be time to pay for some professional assistance.

 

Business skills visas are more difficult technically than most other visa categories, and as such there is more that can go wrong.

 

Best regards.

[George Lombard]

South Australian government has now announced its procedural approach to the business migration changes:

 

Changes to the Business Skills visa program, have been announced by the Department of Immigration and Citizenship (DIAC).

The following amendments will be implemented by DIAC on 19 April 2010 and will apply to new applications lodged on or after 19 April 2010. Applications lodged with DIAC before this date will not be affected by the amendments.

Immigration SA’s Business Migration On Line Application System will not be available until Close of Business 27 April 2010 due to the need to implement a range of administrative changes.

The Amendments

State/Territory Sponsored Business Owner (Provisional) (Subclass 163)

State/Territory Sponsored Senior Executive (Provisional) (Subclass 164)

<The minimum net business and personal assets required for the 163 and 164 provisional Business Skills visas will be increased from A$250 000 to A$500 000 in addition to assets that the State/Territory government sponsor considers adequate to settle in Australia.>

Business Talent (Residence) (Subclass 132)

State/Territory Sponsored Business Owner (Residence) (Subclass 892)

< The ownership requirement of all business owner visas (including 132 and 892) will be increased from 10% to:

 

 

• 51% where the business turnover is less than A$400 000;
  
• 30% where the business turnover is A$400 000 or more; or
  
• 10% where the business is a publicly listed company.
  

 

A transitional provision will be available for onshore visa applicants who have purchased a business in Australia prior to the change and are applying for a permanent business owner visa.

State/Territory Sponsored Business Owner (Provisional)(Subclass 163)

< The senior manager provision will be removed from the Subclass 163 visa.>

As a sponsoring authority, Immigration SA must ensure that the applicants it sponsors will be able to meet all DAIC visa requirements. The following arrangements are implemented.

Finalised applications:

If your sponsorship application has already been approved by Immigration SA and you are yet to lodge a visa application with DIAC, you must meet the new criteria.

Applications to be processing:

Immigration SA has a publically stated service standard of 4 weeks processing time from the date a complete application (including all supporting documents) has been received by our office.

Any application not assessed by Immigration SA by the 19 April 2010 will be required to meet the new DIAC criteria.

The table below shows the total amount of funds now required by Immigration SA to comply with the new DIAC criteria:

Family composition Minimum amount required to transfer into the proposed business in SA (AUD) Additional amount required for settlement (AUD) Total amount required (AUD)* Principal Applicant $500,000 $30,000 $530,000 Principal Applicant and Spouse $500,000 $50,000 $550,000 Principal Applicant, Spouse, 1 Child $500,000 $60,000 $560,000 Principal Applicant, Spouse, 2 Children $500,000 $65,000 $565,000 Principal Applicant, Spouse, 3 Children $500,000 $70,000 $570,000

If the application does not meet the new DIAC criteria the application for sponsorship will not be approved. If you believe that the application will meet the new criteria, you may provide Immigration SA with further evidence to that effect.

Should you have any further enquires, please contact us at bmu.sa@sa.gov.au

 

 

 

Cheers,

 

George Lombard

[Guest Jamie Smith]

Clearly the people hatching these formulas have NO IDEA about the real world. There are many businesses for sale in the $200,000 to $400,000 range that create healthy profits and many jobs, leaving $100,000 to settle with.

 

That allows say $30,000 for furniture and settlement stuff, $70,000 as a deposit on a house of about $400,000 in an outlying suburb - not everyone is here to pay cash for a $1 million house near the city.

 

Likewise, you can borrow to buy a business and conserve your capital for housing or whatever.

 

The other bit they forget is buying a profitbale business means the applicant does not have to use all their savings as they have access to business profits.

 

So bringing in settlement money in addition to the specified minimum is just unnecessary and shows a lack of well informed thinking. :GEEK:

[rammygirl]

Thanks George and Jamie for this.

We have lodged our 163 so OK with that but the PR visa now changed for us.

Looks like we will have to re-think our plans as our business prospect is unlikely to let go of more than 20% of his business. It is a Pty so assume this is not what they mean by public listed company so we would need 30% min.

 

Wonder how they are going to treat the figures if one is using 2 separate businesses to meet the requirements?

 

I was going to buy a small business - s/wich shop, cofee bar type thing (husband is main applicant) to compliment the application and run this day to day for the qualifying period before putting a manager in place and taking more of a back seat in the longer term.

 

This may now be more important if we have to set up the consultancy business from scratch.

[Alan Collett]

A mere 20% interest is a fairly significant risk if you are investing your money - in the absence of a watertight Shareholders' Agreement you have no effective influence over the company and are beholden to the majority shareholder/s.

 

If it is a business in which you are nevertheless keen to participate, is there any possibility of an Agreement whereby you accrue additional % shareholding over time, in exchange for (say) a lower level of salary/drawings?

 

Best regards.

[Alan Collett]

Clearly the people hatching these formulas have NO IDEA about the real world.

 

<snip>

 

 

 

Jamie,

 

Are we not talking about public sector workers, many of whom (I dare say) have never owned a business, or indeed worked in the private sector?

 

Best regards.

[rammygirl]

A mere 20% interest is a fairly significant risk if you are investing your money - in the absence of a watertight Shareholders' Agreement you have no effective influence over the company and are beholden to the majority shareholder/s.

 

If it is a business in which you are nevertheless keen to participate, is there any possibility of an Agreement whereby you accrue additional % shareholding over time, in exchange for (say) a lower level of salary/drawings?

 

Best regards.

 

 

We understand this and are not relying on any verbal agreements/friendship but will have a proper agreement in place including an exit strategy for the future.

 

We may though re-think and set up ourselves as a Pty (with 100% ownership) and have a contract with the said firm to guarantee us a certain amount of business (this was tentatively discussed before) - this will also allow for more freedom in developing a wider customer base

[Alan Collett]

Yes, that is a good strategy: have 100% ownership of a business that has a good Referrer Agreement.

 

Indeed, I anticipate there are a few "workarounds" to circumvent the new Migration Regs. Your suggestion is one. Another might be to enter into a joint venture arrangement where you have 100% ownership of your representative interest in the j/v - my recollection is that the accounting for income and expenses in a j/v would allow you to include your proportionate share of all income, expenses, assets, and liabilities in your business accounts, and in so doing meet the requirements for permanent residency.

 

I dare say the devil will be in the detail of Department of Immigration policy in due course, but I'm not yet persuaded that these changes as are well thought through as they could be ...

 

Best regards.

[rammygirl]

We also considered having controlling ownership of a newly formed subsidiary of the company thus getting over the owners (well his son's) reluctance to relinquish too many shares in the main business and getting business from the main company to help with turnover to start with.

the joint venture thing could work for this I guess. Must get my head round the different structures.

 

Agree though that owning just 10% of a ltd company that may turnover $2 million is really an investment not running a business (even if you have a day to day role) so contradicts what DIAC are saying they really want from business people i.e. to create wealth and employment for Oz not individual owners.

[miguelrg]

Hey,

completely random reply to this thread but someone might be able to help me,

My boss in london has shares in 7 different salons and is quite wealthy and also has a registered company in NSW which is currently not being used...

How would i go about opening a salon with him over there in sydney?

Would i need to get sponsored or could we open a business together over there on a business visa? impossible?

thank you

[PARBUTTN]

Hi,

 

Don't really know the answers but just bumping your thread so someone hopefully will know. One thing I do know is that you would not be able to apply for a business visa unless you have been a business owner for the last few years, with the correct turnover and assetts required. I am assuming yo are a hairdresser and you will probably be able to be sponsored over or depending on age circumstances a working visa of some kind. There are so many different visas. Alan Collett from Go Matilda is always contactable on PIO, and although he is not my agent I have only heard good things about him!and I know when I was looking to apply I had 2 different consultations with agents which I think would be good to get some proper advice, It is such a minefield.

 

Sorry I dont know the answers, good luck with your plans

 

Nicki