VISA UPDATE: Entrepreneur Visa Australia

Entrepreneur Visa

The Government of Australia introduced the National Innovation & Science Agenda with the objective of taking Australia through extraordinary technological change that is intended to transform the way we live, work, communicate and pursue good ideas.

In order to advance the Agenda, the Government introduced the New Entrepreneur visa to attract the best overseas start-up talent into the country.

 

The new Australian Entrepreneur visa has been established for entrepreneur with innovative ideas and financial backing from third parties.  The new visa allows entrepreneurs with AUD200,000 in funding from specified third parties to develop and commercialise their innovative ideas into Australia.  The most important part of this visa is the provision of a pathway to Australian permanent residency.

 

Eligibility (summary)

• Business Innovation and Investment (Provisional) visa (subclass 188), Entrepreneur Stream
• Applicant must be under 55 years of age, unless a waiver is provided by a state or territory government.  A state or territory can waive the age requirement if the proposed complying entrepreneur activity will be of ‘exceptional’ economic benefit to the nominating state or territory
• Applicant to provide evidence of ‘competent’ English at the time the applicant is invited to apply for the visa
• Applicant to undertake or propose to undertake a complying entrepreneur activity in Australia
• Applicant has a genuine intention to continue this activity
• Applicant must be nominated by a state or territory government.

 

Migration Regulation 5.19E sets out the criteria to be met for an activity to be a complying entrepreneur activity.  This regulation requires that the activity must relate to an innovative idea that is proposed to lead to the commercialisation of a product or service in Australia or the development of a business or enterprise in Australia. 

The following requirements must be met:

• There must be one or more legally enforceable agreements under which funding is to be provided to the entrepreneurial entity (which may be the applicant, a body corporate, or a partnership) by one or more entities
• The total amount of funding provided or to be provided under the agreement or agreements must be at least AUD200,000
• If the applicant is not the entrepreneurial entity, the applicant must personally hold at least a 30% ownership share in the entrepreneurial entity at the time the agreement or agreements are entered into, which prevents more than three applicants being eligible in relation to any one entrepreneurial entity
• Under the agreement or agreements, at least 10% of the funding must be payable to the entrepreneurial entity within 12 months of the day the activity starts to be undertaken in Australia (i.e. $200,000)
• There must be a business plan that is appropriately formulated to lead to an outcome.

Source of funds

Sources of funding are limited to:

• Commonwealth agencies
• State and territory governments
• Publicly funded research organisations
• Investors registered as a Venture Capital Limited Partnership/s (VCLP) or an Early Stage Venture Capital Limited Partnership/s (ESVCLP).

There are a number of state government funded grants for start-ups:

• Victoria: Launch Vic have $60 million fund
• New South Wales: Jobs for NSW – Minimum Viable Product Grants and Building Partnership Grants have $190 million over four years
• Queensland: iLab incubator and Accelerator provided $80 million to date
• Western Australia: Innovation voucher program
• South Australia: Innovative voucher Program
• Commonwealth Government: Innovation Program.

The main funding will come from Venture Capital Limited Partnership/s (VCLP) and Early State Venture Capital Limited Partnership/s (ESVCLP) which have overseas and local investors who register under the Venture Capital Partnership/s Act 2002.

• VCLP must have capital in excess of $10 million
• ESVCLP must have capital between $10 million and $200 million.

Exclusions

The following activities are excluded:

• Establishing, purchasing, investing or acquiring an interest in residential real estate.  The term ‘Australian residential property’ includes any Australian land zoned for residential use
• Establishing, purchasing, investing or acquiring an interest in labour hire companies; or
• Purchasing, investing or acquiring an interest in an existing entity (including franchise).

Transition to Australian permanent residence

The criteria for transitioning to permanent residence in the entrepreneur stream are that:

• An applicant holds a subclass 188 visa for a continuous period of four years;
• An applicant has resided in Australia for two out of the last four years; and
• An applicant has demonstrated an overall successful record of undertaking, whether alone or by participating in a business, activities of an entrepreneurial nature in Australia while holding a subclass 188 visa.

An applicant’s record of success will be based upon the number of Australian citizens employed, the nature of the funding and the annual turnover in relation to the activities undertaken.

The Government’s policy document for transition from subclass 188 to the subclass 888 (permanent residence) visa has not been finalised.

Nevett Ford Lawyers Melbourne can provide advice and assistance so please contact us if you are interested in this visa or any other visa type.