If you are a temporary Australian visa holder, you might be wondering whether you are legally able to start a business. While most temporary Australian visas don’t expressly restrict you from starting a business, it is still difficult to start a business on a temporary visa. It is important that you are aware of the conditions on your temporary visa. If you breach your visa conditions by starting a business, your visa might get cancelled. This article will outline when you can start a business under a temporary Australian visa.

Checking Your Visa Requirements

Student Visa

If you are on a student visa (subclass 500), you are required to study full-time while your course is in session. Under Australian visa requirements, you can work for up to 40 hours per fortnight (or, 20 hours a week).

If you only spend 20 hours a week working on your business then, technically, you are complying with your visa conditions. However, it can be hard to calculate the number of hours that you spend working on your business. You will also need to make sure that you continue to meet your study requirements. This will ensure that you do not breach your visa requirements.

Employer Sponsored Visas

You may be on an employer-sponsored visa (such as subclass 457 and 482). If so, you must work for the same employer in the nominated occupation while you run your business. Practically, you may need to spend time working on your business while employed in the nominated occupation. However, if you do so, you could be breaching your visa. 

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 will need to apply for an Australian Business Number (ABN) and Tax File Number (TFN) to lodge your tax returns.

Starting a Company

A company is a beneficial structure to operate a business under. This is because it provides you with the protection of ‘limited liability’. Limited liability means that your personal assets cannot be taken if your business falls into debt. It also allows you to allocate portions of the business to your business partners or investors depending on the contribution that they make.

A company structure might also be 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 in place. This ensures that their rights remain in the company even if you leave the country. Additionally, it also provides them with certainty over their returns.

If you choose to run your business through a company structure, you will need to 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. In some cases, an Australian permanent resident might be accepted.

Issues to Consider

Tax Issues

As a temporary visa holder, you are likely a foreign resident for Australian tax purposes. This means that you will need to pay a higher tax rate on any income that you make in Australia.

Again, the company structure might be favourable as it roughly has a 30% flat tax rate in Australia. However, if you want to distribute any of the company income to yourself, you might still have to pay a higher foreign resident tax rate.

Business Longevity Issues

One of the most crucial things that you need to consider is how you intend to run your business when your temporary visa expires. When your visa expires, you must leave Australia immediately.

If you intend to continue running your business from overseas, you will need to have an Australian business partner who will run matters in Australia for you. However, any income or dividends you receive from the business will incur tax in Australia.

If you plan to sell your business when your visa expires, you will need to find a suitable buyer in advance. The process of settling a business sale in Australia can take up to two weeks. Again, keep in mind that any proceeds that you make from the sale of the business will be taxed at a higher foreign resident tax rate.

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Key Takeaways

Starting a business in Australia on a temporary visa might seem like a great idea. However, it can be a very complicated process. You will need to look at your current visa requirements and ensure you can fulfil them if you start a business. If you have an Australian resident business partner, you may be able to start a company. However, as this company will face high tax implications, you may want to look into applying for a permanent visa. If you have any questions about starting a business in Australia as a visa holder, contact LegalVision’s immigration lawyers on 1300 544 755 or fill out the form on this page.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.
Natasha Bahari

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