Summary
- Most temporary Australian visas do not expressly prohibit starting a business, but work-related visa conditions — including hour restrictions for student visas and occupation requirements for employer-sponsored visas — must be carefully reviewed before commencing business activities.
- Employer-sponsored visa holders may establish a company and hold shares, but must not actively participate in managing or operating the business if doing so falls outside their nominated occupation under condition 8607.
- Key practical considerations include obtaining an ABN and TFN, incorporating through ASIC with at least one Australian resident director, and planning for business continuity or sale before the visa expires.
- This article explains when and how temporary visa holders can legally start a business in Australia.
- LegalVision, a commercial law firm specialising in advising clients on immigration and business law, outlines the visa conditions, business structures, and practical issues to consider.
Tips for Businesses
Review your visa conditions carefully before commencing any business activity, paying close attention to work hour limits and occupation restrictions. Consider a company structure to attract investors and provide continuity if you leave Australia. Plan for visa expiry early — either by arranging a business sale, applying for a permanent visa, or structuring the business to operate remotely.
Temporary visa holders can generally start a business in Australia, but the rules vary significantly depending on your visa type. Understanding your visa conditions, particularly those relating to work and employment, is essential before proceeding. This article outlines when and how a temporary Australian visa will allow you to start a business.
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Student Visa
If you are on a student visa (subclass 500), you must study full-time while your course is in session. As of 1 July 2023, Australian visa conditions allow you to work up to 48 hours per fortnight. This means that if you spend only, for example, 20 hours working on your business, you will technically comply with your visa conditions.
However, you may face an obstacle when trying to calculate the number of hours you spent on starting your new business. In addition to recording difficulties, you must also meet your other student visa obligations. Notably, you will also need to ensure that you:
- meet your course requirements;
- maintain adequate health insurance; and
- do not breach your visa conditions.
Temporary Graduate Visa
As a holder of the temporary graduate visa (subclass 485), you are allowed to work for an unrestricted number of hours. This provides you with more opportunities to start your business and engage in entrepreneurial activities, provided you still comply with your visa conditions.
Furthermore, you may be part of or consider applying for the Graduate Work stream, which will allow you to temporarily live and work in Australia once you have completed your studies. One key qualification for being part of the stream is that you must have a qualification relevant to an occupation on the skilled occupation list. However, engaging in business activities in a completely unrelated industry from your occupation is not prohibited. This means that your new business should be related to the qualifications you gained.
Employer-Sponsored Visas
You may be on an employer-sponsored visa (such as subclass 457 and 482 or 494). In this instance, you must work only in your nominated occupation and for your approved employer as per condition 8607, unless your occupation is exempt. This means you are not required to work solely for your approved employer. However, you must continue to work in the nominated occupation. In these circumstances, you may be able to start a business if you will still be working in the nominated occupation.
Generally, if you are a sponsored worker, nothing prevents you from establishing a business and only becoming a shareholder. However, you must be careful to refrain from actively participating in the management and operation of the business, as this may fall under the umbrella of engaging in work.
For example, suppose you are in a nominated occupation as a chef sponsored by restaurant X. You can start your own business (restaurant Y) and be a shareholder. Nothing is preventing you from enjoying and receiving income from restaurant Y. However, under condition 8607, you cannot work for restaurant Y.
How Can I Start a Business in Australia?
After reviewing your visa conditions, you should check the national requirements for starting a business in Australia. To start trading, you must apply for an Australian Business Number (ABN) and Tax File Number (TFN) to lodge your tax returns.
Starting a Company
A company structure is also beneficial from an investment standpoint. As you only have temporary working rights, investors might only want to invest in your business if you have a company structure. The investors are guaranteed that their rights remain in the company even if they subsequently leave the country. Additionally, it also provides them with certainty over their returns.
Suppose you choose to run your business through a company structure. You must formally incorporate a company through the Australian Securities and Investments Commission (ASIC) register. ASIC requires that at least one of the directors of your company will need to be an Australian resident.
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Issues to Consider
Tax Issues
You may be under a different tax rate as a temporary visa holder. Again, the company structure might be favourable as it roughly has a 30% flat tax rate in Australia. However, if you distribute company income to yourself, you may have to pay tax at a rate applicable to your circumstances.
Business Longevity Issues
One of the most crucial things you must consider is how you intend to run your business when your temporary visa expires. When your visa expires, you must leave Australia immediately.
Therefore, it is essential to consider the kind of business you want to set up. Consider whether it is a business you can easily take overseas and run from anywhere or whether it requires you to be in Australia. You must assess these issues before setting up your business. For example, setting up an in-person shop in Australia and leaving it behind when your visa expires would not be ideal.
Alternatively, if you plan to sell your business when your visa expires, you must find a suitable buyer in advance. Settling a business sale in Australia can take up to two weeks.
Key Takeaways
Starting a business in Australia on a temporary visa might seem promising. However, it can be a highly complex process. You should begin by ensuring you can fulfil your current visa conditions whilst developing your business. This depends on whether your visa is a:
- student visa (subclass 500);
- temporary graduate visa (subclass 485); or
- an employer-sponsored visa.
You should also ensure to fulfil relevant business obligations such as applying for an ABN and choosing a business structure. Furthermore, you may consider starting a company with an Australian resident business partner. Alternatively, consider looking into applying for a permanent visa.
If you have any questions about starting a business in Australia as a temporary visa holder, LegalVision provides ongoing legal support for businesses through our fixed-fee legal membership. Our experienced immigration lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 1300 544 755 or visit our membership page.
Frequently Asked Questions
No provisions stop you from setting up a business on a temporary visa. However, there are work and industry restrictions to consider. Ensure you check your visa conditions before starting a business, as you want to avoid breaching your visa conditions.
First, you must consider your visa conditions, such as work restrictions. You also need to decide on a company structure that best suits your circumstances and carefully assess tax and business longevity issues.
Not necessarily. While you can become a shareholder in a business, actively participating in its management and operations may constitute engaging in work, which could breach condition 8607. You must continue working only in your nominated occupation for your approved employer.
You must leave Australia immediately when your visa expires. Before setting up a business, consider whether it can be operated remotely from overseas, or plan to find a suitable buyer in advance, as settling a business sale in Australia can take up to two weeks.
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