Overseas Business Sponsorship: Common Challenges When Expanding into Australia
Visa Planning Should Not Be an Afterthought
When Directors of an overseas business decide to expand into the Australian market by registering an Australian subsidiary, common considerations are company incorporation requirements, tax implications, and employment regulations. Visa processes are often thought of as a secondary consideration, to be resolved after the aforementioned steps have been completed. This approach can be costly and cause operational challenges, as visa requirements in such cases can be strict and slow to process.
Many company Directors can come to Australia on various types of visitor visas to take steps to get their Australian business set up. Most visitor visas expressly permit these activities. However, they do not permit 'work'. This means a company Director or senior employee cannot actually do any work for the Australian subsidiary unless he or she has an appropriate work visa. This is where the Overseas Business Sponsored (OBS) subclass 482 visa becomes important.
Which overseas businesses can sponsor workers?
To obtain a subclass 482 visa, the sponsor must be either a company actively operating in Australia, an overseas business with intentions to expand into Australia, or an overseas business with contractual obligations to uphold in Australia. During the initial setup phase, it is the overseas entity that is the sponsor, because at that point, the Australian subsidiary is not yet actually operating.
Demonstrating a Genuine Intention to Expand
While the law is set up to facilitate this process, the Department of Home Affairs usually takes a strict approach to what constitutes a 'genuine' intention to establish operations in Australia. Key considerations include company revenue, employee numbers, industry, and evidence of sophisticated Australian market research.
For globally known brands, it is evident that plans to expand into Australia are genuine, as the company has a proven track record of successful commercial operations on a large scale, often across multiple countries. Where a company is small or medium-sized, the task of convincing the Department that the application should be approved is much more challenging. The Department regularly refuses these applications, so it is important to approach them knowing that every effort to present a properly prepared application is critical.
Processing Times Can Create Commercial Risks
Further compounding the problem of high refusal rates is processing time. Overseas Business Sponsor applications can often take over 12 months to process if appropriate steps are not taken to reduce processing times. Such an outcome can be challenging if a business has already invested significantly in other aspects of the Australian subsidiary setup but needs to re-apply and face extensive processing times a second time.
Practical Steps to Strengthen an Application
Basic steps that can greatly assist with Overseas Business Sponsor applications are:
Demonstrating that the business has undertaken sophisticated and detailed research on entering the Australian market. This may involve details of industry competitors, possible office locations, and recruitment timelines.
Liaising with relevant state or local government departments to obtain support for the application. State governments themselves do not approve applications, but they may be willing to write a letter of support if they are convinced the business case is solid.
Providing comprehensive documentation on the nature of the overseas-based business. This includes evidence that it is appropriately registered in the country where it is headquartered, and evidence of genuine and ongoing operations.
If you are considering applying for Overseas Business Sponsorship status, please contact Long Migration Law at a.long@longmigrationlaw.com to discuss.
