[ESTABLISHING A BUSINESS ENTITY IN AUSTRALIA]
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The thin capitalization rules can change from year to year and will only apply when an entity’s debt -to-equity ratio exceeds the allowable limits. Foreign entities which conduct business operations in Australia should seek taxation advice in respect of the thin capitalization rules. Business or Investment Visas Migration to Australia is primarily governed by the Migration Act 1958 (Cth) ( Migration Act ) and the Migration Regulations 1958 (Cth) ( Migration Regulations ). Non-Australian persons generally have a right to travel to, enter, and remain in Australia provided that they obtain an appropriate class of visa and complete the immigration clearance process. There are a broad range of visas that are available for foreign persons who wish to seek employment or commence business operations in Australia. These visa classes include: • Subclass 188 - Business Innovation and Investment (Provisional) visas A Subclass 188 Visa allows foreign persons to own, manage and conduct businesses and to conduct investment or entrepreneurial activities in Australia. A Subclass 188 Visa is generally valid for up to five years, however provisional visa holders may be able to apply for a permanent visa once certain requirements are met. • Subclass 400 - Temporary Work (Short Stay Specialist) visa A Subclass 400 Visa allows for foreign persons to enter and remain in Australia for the purposes of performing short- term, highly specialised work. In order to be eligible for a Subclass 400 Visa, the applicant will be required (among other things) to have specialised skills, knowledge or experience that is not commonly available in Australia. A
Subclass 400 Visa can be granted for up to six months; however, applications for more than three months must be supported by a strong business case. • Subclass 482 - Temporary Skill Shortage visa A Subclass 482 Visa allows Australian businesses to sponsor a suitably skilled foreign person to work in their business, if they are unable to source an appropriately skilled Australian worker. Subclass 482 Visas are generally valid for a period of two years; however, they may be granted for up to four years if an International Trade Obligation applies. Foreign persons who wish to enter Australia for the purpose of seeking employment or commencing business operations in Australia should seek the advice of a registered Migration Agent, who will be able to provide advice in respect of the appropriate class of visa and the associated application process. Restrictions on Remitting Funds out of Australia The general position is that there are no restrictions on the amount of funds (including cash and electronically transmitted funds) that may be transferred in or out of Australia. However, the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) ( AML/CTF Act ) requires certain transactions to be reported to AUSTRAC within 10 business days of such transfer occurring, for the purpose of detecting tax evasion and money laundering. The AML/CTF Act imposes additional regulatory requirements on businesses that are classified as “reporting entities”. Reporting entities are entities which provide “designated services”, including financial, gambling, bullion or digital currency exchange services.
ILN Corporate Group – Establishing a Business Entity Series
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