You may be wondering if you can open a business as an Australian student visa holder. Then read the blog to know more
You might wonder whether you can register a business in Australia if you are a temporary Australian visa holder. Although most temporary Australian visas do not prohibit you from starting a business, it is still challenging to start a business on a temporary visa. Be aware of the conditions of your temporary visa. Your visa might be revoked if you breach your visa conditions by starting a business. This article will learn when you can start a business while on a temporary Australian visa.
Checking Your Visa Requirements
Student Visa
While you are on a student visa (subclass 500), you must study full-time. Australia’s visa requirements allow you to work up to 40 hours per fortnight (or 20 hours per week).
Even if you spend only 20 hours a week working on your business, you are technically in compliance with your visa conditions. It can be difficult to calculate the number of hours you spend on your business. Ensure that you continue to meet your study requirements as well. By doing so, you will ensure that you do not violate your visa requirements.
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Employer-Sponsored Visas
You may have a visa sponsored by your employer (such as subclass 457 or 482). In that case, you must work for the same employer in the nominated occupation while you run your business. If you are employed in the nominated occupation, you may need to spend time working on your business. Nonetheless, if you do so, you could violate your visa.
How Can I Start a Business in Australia?
Upon reviewing your visa conditions, you should check the national requirements for starting a business in Australia. You will need an Australian Business Number (ABN) and a Tax File Number (TFN) to start trading.
Starting a Company
It is beneficial to operate a business through a company. This is because you are protected by limited liability. If your business becomes insolvent, your personal assets cannot be taken. You can also allocate business portions to business partners or investors based on their contributions.
A company structure may also be advantageous in terms of investment. Investors may only want to invest in your business if you have a company structure in place because you only have temporary working rights. This ensures that their rights are protected even if they leave the country. Furthermore, it gives them certainty about their returns.
A company structure will require you to formally incorporate your business with the Australian Securities and Investments Commission (ASIC). ASIC requires that at least one company director be an Australian resident. A permanent resident of Australia might be accepted in some cases.
Issues to Consider
Tax Issues
A temporary visa holder is likely a foreign resident for Australian tax purposes. You will be required to pay a higher tax rate on any income you earn in Australia. The company structure might be advantageous since Australia has a 30% flat tax rate. Nevertheless, suppose you distribute any of the company income to yourself. In that case, you might still have to pay a higher foreign resident tax rate.
Business Longevity Issues
One of the most important things to consider is how you intend to run your business once your temporary visa expires. When your visa expires, you must leave Australia immediately.
As a result, it is critical to consider the type of business you wish to establish. Is it a business that you can easily export and run from anywhere? Is it a business that necessitates your presence in Australia? It would be inconvenient to open an in-person shop in Australia only to leave it when your visa expires, so think about these questions before starting your business.
Suppose you plan to continue running your own business from abroad. In that case, you will need an Australian business partner to handle matters in Australia on your behalf. Nevertheless, any business income or dividends you receive will be taxed in Australia.
If you plan to sell your business when your visa expires, you should indeed find an appropriate buyer ahead of time. In Australia, the process of settling a business sale can take up to two weeks. Remember that any proceeds from the sale of the business will be taxed at a higher foreign resident tax rate.
Key Takeaways
Starting a business in Australia on a temporary visa might seem like a good idea. However, the process can be very complicated. You should review your current visa requirements and make sure you can meet them if you start a business. You may be able to start a company if you have an Australian business partner. As this company will face high tax implications, you may want to consider applying for a permanent visa. Those with questions about starting a business in Australia as a visa holder should contact Vakilsearch or complete the form located on this page.
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