In Short
- The closure of the BIIP has left business owners seeking alternative visa pathways, such as self-sponsorship under the Subclass 482 visa and the Subclass 491 visa for small business owners.
- Both options require significant investment, compliance with business regulations and a clear understanding of visa criteria.
- Professional legal advice is crucial to navigating these complex visa pathways and securing migration success.
Tips for Businesses
Ensure you meet all visa criteria, including business turnover and employment requirements, before applying for the Subclass 491 visa. Seek expert legal advice to help with the complex self-sponsorship process under the Subclass 482 visa, particularly to demonstrate the genuine need for the nominated role. Carefully consider the financial investment and long-term planning required to establish or maintain a business in Australia.
As of 31 July 2024, the Australian Government made the significant decision to close the Business Innovation and Investment Program (BIIP), effectively ending a long-standing visa pathway that had been crucial for business owners, investors, and entrepreneurs seeking to establish themselves in Australia. This sudden change has left many aspiring migrants and current temporary residents in a state of uncertainty, searching for new avenues to secure their future in the country.
In response to this shift in immigration policy, this article delves into the alternative visa pathways now available to business owners and entrepreneurs who wish to relocate to or continue their operations in Australia. This article explores two key options that have gained prominence in the wake of the BIIP's closure:
- self-sponsorship under the Subclass 482 visa; and
- the small business owner and business operator pathways under the Subclass 491 visa (regional locations).
Was the BIIP Effective?
The BIIP was a significant component of Australia's migration strategy, introduced in 2012 to attract overseas business owners, investors, and entrepreneurs. Over its lifespan, the program facilitated the entry of more than 100,000 migrants, with a notable concentration of applicants from China, Iran and Hong Kong. The BIIP offered various visa streams, each designed to cater to different types of business professionals and investors. These streams typically required applicants to demonstrate:
- substantial business experience;
- significant assets; and
- a commitment to investing in or establishing businesses in Australia.
The program aimed to stimulate economic growth, create jobs and increase Australia's international competitiveness by leveraging the skills, capital and networks of foreign business talent.
Despite its ambitious goals, the BIIP's effectiveness came under scrutiny in recent years, ultimately leading to its abolishment on 31 July 2024. The BIIP was primarily discontinued as:
- Critics, including the Grattan Institute, argued that BIIP visa holders brought fewer benefits compared to skilled migrants, citing factors such as older age, limited English proficiency and lower income levels;
- A government review in March 2023 estimated the lifetime economic contribution of BIIP holders at $600,000, less than half that of the average Australian ($1.6 million); and
- there were increasing concerns around the program's integrity and its alignment with Australia's evolving economic needs.
The closure of the program aligns with the Australian government's shift towards a more targeted approach to skilled migration, as evidenced by the introduction of the new Skills in Demand visa and efforts to address critical worker shortages in specific industries.
Self-Sponsorship Under the Subclass 482 Skills in Demand Visa
Self-sponsorship under the Subclass 482 Skills in Demand visa presents a complex and highly scrutinised pathway for business owners seeking to continue their operations in Australia. While theoretically possible (and not expressly prohibited), this option should be considered an absolute last resort due to the numerous challenges and risks involved. The Department of Home Affairs applies rigorous assessment criteria to such applications, focusing intensely on the genuineness of the position and the arm's length nature of the arrangement.
The general requirements for this pathway are demanding. Applicants must demonstrate that:
- the nominated occupation is on the relevant skilled occupation list;
- their business is legally established in Australia;
- there is a genuine need for the position within the company;
- they possess the required skills and qualifications for the role; and
- they offer a salary at or above the market rate.
The most challenging aspect is often proving the genuine need for the nominated position, when the business owner/director is the nominee that will occupy the nominated position. It may be viewed as a position created to secure a migration outcome, particularly in small businesses where the owner's role might be seen as intrinsic to the company's existence rather than a separate, sponsorable position.
The Department of Home Affairs views self-sponsorship applications with heightened skepticism, primarily due to concerns about potential abuse of the visa system. The "genuine position" criterion assessment is particularly stringent, with officials looking for clear evidence that the sponsored role is:
- necessary;
- distinct from the applicant's ownership duties; and
- could potentially be filled by an Australian worker.
This scrutiny extends to evaluating the business':
- financial viability;
- its capacity to support the sponsored position; and
- the arm's length nature of the nomination process.
Given these challenges, business owners considering this option should be prepared for a complex, time-consuming application process with a high risk of refusal. It is crucial to seek professional legal advice before pursuing self-sponsorship under the Subclass 482 visa, as a properly assessed and prepared application may have reasonable prospects of success.
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Small Business Owner and Business Operator Pathways Under Subclass 491 and Subclass 190
The Skilled Work Regional (Provisional) visa (Subclass 491) may be a more suitable option for business owners based in specific regional locations. It offers pathways for small business owners and operators through state nomination programs. While the general Subclass 491 is points-tested and requires a skilled occupation, some states have introduced additional specific requirements for business owners.
Australian Capital Territory (ACT)
The ACT allows eligible applicants to claim Matrix points in the small business owner category under the Subclass 190 and 491 nomination program.
To secure ACT state nomination, you must:
- be the majority owner (51%) of an eligible registered business located in the ACT;
- live in Canberra for the last three months;
- work in Canberra as a small business owner in the last three months; and
- commit to living in Canberra.
The following businesses are ineligible businesses for ACT state nomination:
- sub-tenancy;
- ride-share, taxi, delivery and courier services; and
- an on-sold business previously used to qualify for ACT nomination.
To claim Matrix points in the Small Business Owner category, you must satisfy the following criteria:
- the business is operating in the ACT for at least 12 months with a minimum turnover of $200,000 OR the business is operating for at least 6 months with a minimum turnover of $100,000;
- the business is profitable;
- you earn at least $13,000 taxable income in the last three months (for Subclass 491) OR $26,000 taxable income in the last 6 months (for Subclass 190); and
- you employ at least one Australian citizen, permanent resident or New Zealand citizen for at least 13 weeks (minimum 20 hours per week).
Tasmania
Tasmania provides a Business Owner stream within their Subclass 491 program. To be eligible for this, you must:
- have operated a business in Tasmania for at least 12 months;
- solely own or co-own your business with your spouse, where this business is eligible;
- have a personal taxable income from the business of at least 85% of the Temporary Skilled Migration Income Threshold (currently $62,178); and
- satisfy priority attributes.
Queensland
Queensland offers a Business Owner stream for the Subclass 491 visa.
| Program Overview | The program is for migrants living in and operating small businesses in regional Queensland. It is a five-year visa with a pathway to permanent residency after three years. |
| Pathways | Pathway 1: Business purchase. Pathway 2: Start-up business. |
The requirements for each pathway are below.
| Pathway 1 | You must be looking to purchase an existing registered business
outside South East Queensland with a minimum purchase price of
$100,000. Your business must: + employ at least one Australian resident; and + be operating for a minimum of six months before submitting an Expression of Interest (EOI). Additionally, the business purchase must be settled within 18 months of the EOI. This business must: + have been operating for at least two years at its current location; + continue operating for six months or more after settlement; and + employ at least one Australian resident for 20 or more hours per week. |
| Pathway 2 | This pathway applies if you have started your own business, which must:be running continuously for a minimum of two years; and generate a profit. The business should have a turnover of at least $200,000 in the 12 months prior to submitting an Expression of Interest (EOI). |
Advantages and Risks of the Subclass 491 and Subclass 190
Business owners have access to many advantages, including:
- a pathway to continue operating the business when alternative visas are unavailable;
- the continued operation and expansion of the existing business in regional areas; and
- a route to permanent residency after meeting specific requirements.
However, there are also accompanying risks:
- Regional Restrictions: The visa requires living and working in designated regional areas, limiting business opportunities.
- State-Specific Requirements: Each state has different, complex criteria that may change over time.
- Limited Validity: The initial visa is valid for 5 years, with permanent residency not guaranteed.
- Business Performance: Maintaining the required business turnover and employment levels can be challenging, especially in regional areas.
- Competitive Process: State nomination places are limited and highly competitive.
Key Statistics:
- Over 200,000: Migrants have been facilitated by the BIIP since its introduction in 2012. The BIIP has been discontinued as of 31 July 2024.
- Nearly 20,000: Business skills visa applications were pending as of 31 July 2023, indicating a significant backlog that would take years to clear.
- 620,00 Enterprises: One-third of all Australian small businesses are owned by migrants.
Sources:
- The Parliament of Australia, Report of the Inquiry into the Business Innovation and Investment Programme, 2022.
- GM Business Visas, Business skills visa applications – the latest statistics, August 2023.
- Australian Small Business and Family Enterprise Ombudsman, Ombudsman thanks migrant-run small businesses for their contribution, March 2022.
Navigating Risks and Challenges
While these pathways offer opportunities for business owners, they come with significant risks and challenges that need careful consideration:
- Financial Investment: Establishing or purchasing a business in Australia requires substantial capital, with no guarantee of visa grant or business success.
- Regulatory Compliance: Australian business regulations can be complex, requiring thorough understanding and adherence.
- Market Understanding: Success depends on a deep understanding of the Australian market, which can be challenging for newcomers.
- Visa Conditions: Strict adherence to visa conditions is crucial, with non-compliance potentially leading to visa cancellation.
- Long-Term Planning: The pathway to permanent residency is not guaranteed and requires long-term planning and commitment.
- Family Considerations: The impact on family members, including education and employment opportunities for partners, needs careful consideration.
- Cultural Adaptation: Adapting to Australian business culture and practices can be a significant challenge for some business owners.
Key Takeaways
The abolishment of the BIIP has undoubtedly shifted the landscape for business owners aiming to migrate to Australia. However, alternatives like self-sponsorship under the Subclass 482 visa and the business owner streams of the Subclass 491 visa offer viable options for those committed to establishing or continuing their business ventures in Australia.
These options require strategic planning, substantial investment and a solid understanding of visa requirements and business regulations. Business owners should seek professional advice to navigate these complexities and align their migration and business goals effectively. Despite the challenges, Australia remains an attractive destination for innovative and committed business owners. With the right approach and preparation, these new pathways can open doors to exciting business opportunities in one of the world's most stable and prosperous economies.
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Frequently Asked Questions
What are the financial and regulatory challenges for business owners migrating to Australia?
Business owners face significant financial investment requirements and must adhere to complex Australian business regulations. Additionally, understanding the local market is crucial for success. Non-compliance with visa conditions can lead to visa cancellation, and long-term planning is necessary to secure permanent residency.
What support can business owners get when applying for a Subclass 491 visa?
Business owners applying for the Subclass 491 visa can benefit from professional advice to navigate the state-specific requirements and visa conditions. Seeking legal support can help ensure compliance with business regulations, meet turnover and employment criteria and increase the chances of visa approval.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
