If you have a temporary Australian work visa with you, you may be thinking if you can legally start a business in Australia. Though most of the temporary Australia have no restrictions to allow you start a new business in the country, it is not easy to start a business on a temporary work visa.
This is why it is important to be aware of the conditions on your temporary visa and ensure that you do not breach your visa conditions by starting a new business. Read the guide below to learn when you can start a business in Australia under a temporary visa.
Know About the Visa Requirements
Some of the different Australian visa requirements for various visas are as follows:
- Student visa
If you are on a subclass 500 student visa, you will have to study full-time while your course is in session. Under the Australian student visa requirements, you will be able to work for up to 40 hours per fortnight. If you spend around 20 hours a week working on your business, you will be following the visa conditions.
But it can be hard to calculate the amount of hours that you can spend working on your business. You also need to ensure that you are able to meet the study requirements and doing this will ensure that you do not breach your visa requirements.
- Employer sponsored visas
You can also be on an employer sponsored visa Application Process like a subclass 482 or 457 visa. If it is, you must work for the same employer in the nominated occupation when you are working on your business. But one thing to keep in mind while being under the work visa is that you may have to spend more time working on your business while being employed in the nominated occupation.
How Can You Start a Business in Australia?
After you review the visa conditions, you must check the national requirements for starting a business in Australia. To begin trading, you will have to apply for an ABN or Australian Business Number and TFN or Tax File Number to lodge the tax returns.
Starting a Company in Australia
A company is a beneficial structure under which you can operate a business. This is due to the fact that it can provide you with the protection of limited liability. This term means that your personal assets cannot be taken if your business falls into any debt. It also allows you to allocate some portions of the business to your business partners or investors based on the contribution that they make.
A company structure may be able to benefit you from an investment standpoint. As you only have temporary working rights, investors may only want to invest in your business if there is a company structure in place. Before you apply for a permanent work visa, you must know that this ensures that their rights remain in the company. Other than that, it will also provide them with certainty over the returns.
If you want to run your business via a company structure, you will have to formally include a company via the Australian Securities and Investments Commission (ASIC) register. This requires that at least a director of your company has to be an Australian resident. In specific cases, an Australian permanent resident may be accepted.
What Are Some Issues You Need to Consider?
Some of the issues you must consider before starting a business on a temporary Australian visa are as follows:
- Tax issues
As the rightful holder of a temporary work visa, you will likely be an international resident for Australian tax purposes. This indicates that you must pay a higher tax rate on any income that you will be making in Australia. This means that the company structure can be favourable as it will roughly have a 30% flat tax rate in Australia.
- Issues with business longevity
This is one of the most important things you must consider and it is important to know how you wish to run the business when your temporary visa expires. When your visa expires, you must immediately return back to Australia. But if you wish to continue running your business from outside the country, you will have to have an Australian business partner who can take care of your business for you in Australia.
But any dividends or income that you get from the business will be included in your tax in Australia. If you wish to sell your business after your visa expires, you have to find a proper buyer in advance. The process of setting up a business sale in Australia can take up to two weeks.
You can also keep in mind that any proceeds that you make from the sale of your business will be taxed at a higher international resident tax rate.
Can You Begin a Business on a Temporary Visa in Australia?
There are no certain provisions stopping you from setting up a business on an Australian temporary visa. But there are work and industry restrictions that you need to consider. You must ensure that you check all of the conditions of your work visa before beginning a business as you may not want them to affect your visa conditions.
What Are the Tax Implications of Your Temporary Visa Status If You Start Your Business?
If you begin your business in Australia under a temporary work visa, you are going to be a foregin resident for tax purposes. This indicates the income you make in Australia will be more. This is something to consider when setting up your business in Australia. You can also contact a reputed law firm that will provide your business with legal assistance that you need.
Final Words
Whether you have a temporary or permanent work visa, you can read the guide above to learn more about setting up a business in Australia. You can also take the help of a legal team or an experienced migration lawyer in your area to learn more about the pros and cons of setting up a business in Australia.
