One year ago today
Australia announced investor migration reforms
1
One year ago today, Australia’s Department of Home Affairs made sweeping reforms to investor migration visas. In short: higher thresholds, greater difficulty, and a slower path to permanent residency.
As a resultbefore last year’s policy changewe lodged applications on behalf of multiple clients, securing their place onthe last train under the old policyand allowing them to continue benefiting fromthe old policy’s advantages. Precisely because of this, there is absolutely no room for error at the most critical stage.
188A to 888A
Old policy requirements
Let’s first reviewthe old policy requirements for converting a 188A to an 888A:
1. In the two years prior to applying for the 888A, the applicant must own one orno more than two primary businesses and be actively involved in their day-to-day management.
2. The applicant musthold a certain percentage of sharesin the primary business:
– More than 51% if the annual turnover is below AUD 400,000
– More than 30% if the annual turnover exceeds AUD 400,000
– More than 10% if it is a publicly listed company
3. The primary business must belegally operating and genuinely ‘active’,and must not be artificially manipulated to meet turnover requirements.
4. In the two years prior to applying for the 888A, the primary business must have provided completeAustralian Business Activity Statements (BAS)
5. In the 12 months prior to applying for the 888A,at least two of the following three conditions must be met:
– The business net assets of the primary business must reach AUD 200,000
– The primary business must employ at least two full-time local employees (Australian citizens, PR holders, or New Zealand citizens)
– The combined Australian net assets of the primary business and the applicant must be no less than AUD 600,000
6. In the 12 months prior to applying for the 888A, the primary business must have an annual turnover of no less than AUD 300,000.
The above are the basic requirements for converting a 188A to an 888A. Yes, they may not seem overly complex, and the thresholds appear manageable. However, behind these seemingly straightforward conditions liemany hidden pitfalls.
Let’s now look at some of the more common issues
1. The company has been registered for many years, but has operated for fewer than two years
We have received many enquiries about this situation. The company has been registered for several years, but has had fewer than two years of actual business activity. In this case, the conditions for lodging an 888A application are not met.Business operating time can only be counted from when actual business activity begins.
2. The applicant was not involved in day-to-day management, or has not retained evidence
The applicant must be involved in the day-to-day management of the business and must retain relevant supporting evidence. Regardless of the business’s size or industry, the applicant must actively participate in its day-to-day operations.For example, signed commercial partnership agreements, procurement contracts, meeting minutes, employment contracts, and other relevant documents must all be carefully preserved.When lodging the 888A visa application, these will be required as essential supporting materials for the Department of Home Affairs.
3. The primary business must reflect genuine market activity and remain ‘active’
The primary business must genuinely reflect market activity and characteristics and be operated on an active basis. We have encountered one enquiry in whichan export business had only two transactions in an entire year for the sake of convenience — while this met the turnover requirement, it was entirely inconsistent with the characteristics of the industry. The client ultimately required an extension to accumulate additional operating time before finally meeting the 888A requirements.
4. The chosen business is not well suited to the applicant
The choice of business is critically important. There are generally three ways an applicant can operate a business in Australia:
1. Purchasing an existing business outright
2. Buying into an existing business as a shareholder
3. Establishing a brand-new business
Each of these three approaches has its own advantages and disadvantages. For example: has the business you are purchasing outright previously been used for an investor migration application? Does the existing business you are buying into provide sufficient management and decision-making authority? Can a brand-new business be successfully operated and meet the Department of Home Affairs’ requirements during a period of ongoing post-pandemic recovery?
These are all important considerations. Australia is a diverse market with a vast array of business types, and there are many aspects to be mindful of.That is why having an experienced MARA-registered migration agent or migration solicitor to guide you through the entire process is essential.
The critical step
While the 188A is the most challenging step, the 888A is the most critical. If something goes wrong at this most critical step, the entire effort is lost.For this reason, before establishing a business in Australia, you must consult a MARA-registered migration agent or migration solicitor to gain a thorough understanding of the relevant policy.Throughout the business operation period, it is also important to identify and resolve issues promptly to avoid common pitfalls — this is the only way to ensure the 888A permanent residency visa is granted successfully.
Newstars’ core team of professional solicitors and MARA-registered migration agents
is with you every step of the way to permanent residency!
Newstars’ recent 188A to 888A success stories
Ms Wang from Shanghai began operating a personal shopping (daigou) business after receiving her 188A. Due to a lack of systematic record-keeping, she faced extensive scrutiny from the Department of Home Affairs regarding her financial statements at the final stage of her permanent residency application. We urgently convened several meetings with her accountant to devise a strategy, combining migration law with accounting standards to submit a robust response and supporting evidence — ultimately securing permanent residency approval for her whole family!
Every applicant’s situation is unique
Feel free to contact a MARA-registered migration agent at any time
Ethan HAN(MARN:1909566)
to develop a personalised migration pathway for you
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