The ESIC regimes has many tax benefits that can incentivise investors. As such, founders should…
Australian Visas for Startup Founders: Making the Right Choice
Australian immigration can get complicated when it comes to starting a business — here’s what you need to know about visas when launching a startup in Australia
Choosing the right Australian visas for startup founders is key. Skilled immigration plays an important role in Australia’s rapidly-growing startup ecosystem. Determining which visa type is best for you while launching a startup in Australia, however, can be a complicated process.
Business Innovation and Investment (Provisional) Visa (Subclass 188)
The Business and Investment Provisional Visa is designed for Entrepreneurs that are focused on commercializing new innovations in Australia. This visa allows visa holders to carry out entrepreneurial activity in Australia as well as bring eligible family members to Australia.
In order to qualify for the Business Innovation and Investment (Provisional) Visa, entrepreneurs must possess an innovative idea for a service, business, or product. Additionally, applicants must have also secured third-party funding in the form of a funding agreement of at least $200,000 in order to carry out the entrepreneurial activity.
The Business and Investment Provisional Visa allows entrepreneurs to stay in Australia for up to 4 years and three months, but in order to qualify applicants must have at least competent English that meets Department of Home Affairs standards and present a business plan that breaks down how the entrepreneurial activity will be carried out.
It’s important to note that this stream excludes labour hire, residential real estate, or purchasing existing enterprises or franchises. This visa allows holders to travel in and out of Australia, and also covers a stream that allows investors seeking to invest a minimum of $1.5 million while maintaining business activity in the country.
Applicants must be nominated by a state or territory government. The Business Innovation and Investment (Provisional) Visa (Subclass 188) is the most widely applied for visa for startup founders in Australia and is the first step towards the Business Innovation and Investment (Permanent) Visa (subclass 888) that provides holders with permanent residency.
Business Innovation and Investment (Permanent) Visa (Subclass 888)
The Business Innovation and Investment (Permanent) Visa (Subclass 888) is functionally similar to the Subclass 188 visa but allows applicants to seek permanent residency in Australia.
This visa allows holders to operate an Australian business through the Business Innovation stream, engage in investment or business activity through the investment stream, or pursue entrepreneurial activity through the Entrepreneur stream.
In order to apply for the Business Innovation and Investment (Permanent) Visa (Subclass 888), applicants must have already held the Subclass 188 visa or a Special Category Visa (Subclass 444) and be nominated by the Australian government or a state or territory.
The Business Innovation and Investment (Permanent) Visa (Subclass 888) is ideal for startup founders and entrepreneurs seeking a visa solution that allows them to stay in Australia permanently and eventually apply for Australian citizenship if they meet eligibility requirements.
Business Talent (Permanent) Visa (Subclass 132)
Business Talent (Permanent) Visa (Subclass 132) is another option available to individuals seeking permanent residency for individuals that have been nominated by the Australian Government or a state or territory.
This visa offers two streams: a Significant Business History stream, and a Venture Capital Entrepreneur stream. The former is available only to high-calibre business owners, while the latter is available to individuals that have sourced VC funding from an active member of the Australian Venture Capital Association Limited (AVCAL).
Eligibility for the Business Talent (Permanent) Visa (Subclass 132) is relatively complex. In addition to nomination, applicants to the Significant Business History stream must possess net business and personal assets that exceed $1.5 million as well as an annual business turnover that exceeds $3 million.
Individuals applying for this visa through the Venture Capital Entrepreneur stream must have obtained a minimum of $1 million in venture capital funding from AVCAL members relating to a high-value business idea in Australia.
Temporary Work (Skilled) Visa (Subclass 457)
The 457 visa, soon to be replaced by the Temporary Skill Shortage Visa, is best-suited for foreign employees of an Australian startup or business. A foreign startup founder operating a business in Australia may want to bring in skilled workers from overseas — the 457 visa allows approved businesses to sponsor foreign employees.
Applicants for the 457 visa must possess the required skill relevant to the position nominated by the approved business. It’s possible for a registered foreign company to sponsor an individual for the 457 visa, as long as the company has an Australian Business Number (ABN) and the relevant documentation.
The Temporary Work (Skilled) Visa (Subclass 457) will soon be replaced by the Temporary Skill Shortage Visa, or TSS. The TSS is similar in function to the 457 visa but may prevent some specific types of skilled workers from applying.
Startups and businesses considering sponsoring workers for a 457 visa or a TSS visa should keep in mind that foreign workers must be paid the Australian market salary for the role at minimum and must meet the temporary skilled migration income threshold. Other factors include requirements for training, English language proficiency, experience and age.
So what are the key takeaways for Australian visas for startup founders? The Australian government offers a variety of different visas to innovative startup founders or investors seeking to invest in the Australian economy and create new businesses. Foreign investors or startup founders should consider the various legal and tax obligations that must be met in order to create an Australian business.
- In addition to organizing a visa, foreign startup founders should also consider:
- The structure of an Australian startup
- Where the startup business will be located
- Protecting the intellectual property of a business
- Creating and executing an effective tax strategy
Australian business and visa ecosystems can be complicated and difficult to navigate. If you’re considering launching a startup as a foreign startup founder in Australia, reach out to Fullstack for comprehensive guidance today.
You may also find this article useful: 10 Things to Consider When Setting Up An Australian Company.
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Stuart Reynolds is the founder of Fullstack Advisory, an award-winning accounting firm for businesses leading the future. He is a 3rd generation accountant who specialises in tech companies, agencies and entrepreneurs.