So, you want to migrate to Australia. You’re probably already seriously thinking about or even working on the next obvious step – getting a visa. However, there are no guarantees when it comes to successfully obtaining one. That is a very well-known fact. The question is, how do you increase your chances of having the application approved?
There are many ways a foreign national might immigrate to Australia.Leading migration expert, Susan Cayago, said “A number of people might still not know that starting a business in Australia is a possible pathway for migrating there and that businessmen with proven experience have a good chance of having their visas approved”.
Furthermore, according to migration assistance website, gomatilda.com, “The Australian government is keen to attract people who have demonstrated an ability within business, either as business owners, senior executives or as investors.”
If you have an entrepreneurial background, and the idea of owning a business in the land Down Under excites you, then you might want to explore the possibilities a business skills visa might bring. You can either start a business from scratch (which is the more arduous and riskier process) or buy an existing one. “Putting up a business out of nowhere will involve a lot of research, business planning and development, establishing brand identity, building infrastructure and so on. On the other hand, purchasing an already established business minimizes start-up woes and will leave you focusing more on driving-up profit as you build your new life in Australia“ said Anthony Rice, Principle of Redmako Business Sales.
“Buying and selling businesses is a thriving practice in Australia and is even supported by an industry of business brokerages who are ready to assist and guide interested buyers“ said Rice. There is readily an interesting array of businesses for sale to choose from. Not sure what type of business to acquire? You can look into all the types of businesses and industries in Australia when considering options, but one of the strongest industries and arguably, one of the easiest to operate is the hospitality industry. In any part of the world, food and hospitality have always been essential consumable services. According to research conducted by Bankwest (PDF), the food and hospitality industry are important drivers of the Australian economy as it generates $74 billion in revenue annually. This revenue is projected to continue growing at a rate of 1.6% per annum through ’til 2020.
Furthermore, according to IbisWorld, one of the factors that triggers this growth is the changing Australian lifestyle. “Busier lifestyles and diminishing leisure time have increasingly led consumers to turn to restaurants for meals. Restaurants have allowed consumers to combine dining with leisure and avoid spending time on food preparation” they said.
If you are considering immigrating to Australia and starting a business there, then here is a step-by-step guide on how you can make it happen:
Talk to a Migration Agent to Learn About Your Visa Options
Australian immigration laws are complex and in flux, that’s why it’s a great advantage to get a highly-skilled professional to look after your lawful interests.
So, first and foremost, approach a migration agent. A registered migration agent is trained to give you sound advice about possible visa options you can consider if you’d like to migrate by acquiring a business in Australia. The migration agent would also be able to give you tips on which types of businesses and the minimum investment requirements that would be most suitable for your profile as an immigrant. He or she will be instrumental in helping you make a validated choice.
One of the things your agent will most likely mention is the Business Innovation and Investment Program. “The Business Innovation and Investor Program has several categories that depend on the profile, experience, value of investment and objectives of the applicant. Take note that you must be under the age of the 55 to be eligible for business migration, unless you are willing to make a significant investment of over 5 million Australian dollars, and you must be sponsored by a State or Territory government of Australia to be invited to apply” Migration expert Susan Cayago said. Reflect on your background and circumstances to consider whether one of the following streams could be applicable for you:
Business Innovation Stream:
- Want to establish, develop and manage a new or existing business in Australia
- Currently own a business with turnover of at least AUD 500,000 for 2 of the last 4 fiscal years
- Net personal and business assets of at least AUD 800,000
- Willing to make a designated investment of at least AUD1.5million in an Australian state or territory and maintain business and investment activity in Australia.
- You have had business and personal net assets of at least AUD 2.25 million for the last 2 fiscal years
- You have 3 years of experience either managing a qualifying business or “eligible investments”, and have showed a high level of management skill
- For at least 1 of the last 5 fiscal years, you have either:
- Managed a business in which you hold a 10% shareholding; or
- Managed “eligible investments” of at least AUD 1.5 million
Significant (AUD5milliion) & Premium (AUD15million) Investor Streams are also available for those wishing to make significant investments in Australia.
Approach a Business Broker
You will certainly need professional help as you venture into the unknown. Finding the right business will surely take a lot of time and effort as well. Thus, a Business Broker is the go-to expert for this. A business broker can prove to be a crucial help to you by:
- Pre-screening which businesses are the right fit. This would depend on your profile, your budget, your lifestyle and even your personality.
- Handling negotiation with the business sellers. Brokers are typically trained to be good negotiators. They can do all the talking for you.
- Assist with the documentation and paperwork required for you to conduct proper due diligence on the business you’re considering.
- Serve as a sounding board when it comes to comparing different opportunities. A broker would have been exposed to many businesses for sale and would have an idea of the fair market value for a particular type of business.
There are many kinds of business brokers but it is always best to get the services of an industry-focused specialist. For example, if you want to take over a manufacturing business in Australia, then seek out a manufacturing business broker. If you are interested in a supermarket business, then find a supermarket specialist. In the same manner, if you want a hospitality business, then it is naturally a good idea to get the services of a hospitality-focused business broker.
A specialist broker has a set of business-matching criteria that he or she would use in giving you a list of businesses for sale that would be most suitable for your needs and wants.
Choosing the Business You’d Like to Purchase
To narrow down the business options you are considering, it is important to focus on the following aspects:
- Financial Health – Secure a copy of the businesses’ financial statements, balance sheets and tax returns for the past years. Review them and determine how much cash flow the business is getting in and what is its profit margin.
- Legal Issues – This pertains to the businesses’ various permits and licenses as well as existing agreements and contracts it might be involved in. Legalities may also involve insurance policies, patents or trademarks. It would be best if you could get assistance from a lawyer involved with Australian law.
- Employees – Familiarize yourself with the organizational chart, employee agreements, rosters and salary information. Find out if the businesses has a pending grievance with any of the employees.
- Operations – Organize the list of suppliers and vendors the business is involved with. Determine whether the inventory systems are adequate. This will help you decide if you need to add new supply chains for the business. The marketing and advertising aspects should also be tackled. Study the existing customer base and know what it takes for it to be sustained and to grow.
Make an Offer & Go to Contract
Once you have finally made a choice and are ready to make an offer Anthony Rice advises that “A legally binding contract with clear terms and conditions is the best way to seal the deal. It is advisable to seek the assistance of a lawyer to help you oversee things. First, discuss your offer and terms and conditions with your broker and your lawyer so a written offer which contains all the discussed requirements can be drafted and presented to the other parties.”
To give you a clearer picture, here is a summary of the contract process:
- Discuss your offer, terms, conditions and requirements with your business broker
- Your broker will translate all your requirements into a formal offer document or Contract and you’ll need to pay a deposit. This deposit will be held in trust until you have completed your investigation and are satisfied with the findings. This deposit is refundable in the case you are not satisfied with the deal after further consideration; as long as your decision complies with the terms and conditions within the agreed time frame.
- Your broker will present your written offer to the other party/ies and negotiate until a mutually satisfying agreement is reached
- Once your offer has been accepted, its time to conduct necessary due diligence and liaise with solicitors, accountants, landlords and other parties involved to satisfy all conditions
- When everything has been double checked and all conditions have been satisfied, then it’s time to go to settlement
Now, if the written offer and the terms and conditions have been accepted by all, its time to proceed to settlement. The balance of the purchase price must be settled at a date the parties agreed upon. If you will be paying for stock, then stock-taking usually occurs a day before the settlement.
You should also expect that certain documents should be turned over to you upon this time. Here is a list of such documents & other things you should consider:
Documents & Filings
- Lease Assignment
- List of all employees, their full contact details, employment status, salary and leave entitlements calculations
- List of all assets and details of any finance on any of the assets of the business
- Licences and permits which are being transferred
- Electronic code to transfer the business name to the new owner
- Copies of all material supply contracts of the business
- Copies of all leases and hire agreements for any equipment or motor vehicles used in the business
- List of all security interests registered against your business and what is required for the parties holding such security interests to withdraw them
- Transfer documents for all intellectual property owned and used by the business and what will be transferred to the purchaser
- Alarm codes
- Computer and software access codes
- Safe combinations
- Customer lists, contact names, and background information
- Supplier lists, contact names, and background information
- Distributor lists and background information
- Keys to file cabinets, premises, vehicles
- Owner’s manuals for equipment
A couple of other items which can often be forgotten are:
- Who is responsible for placing supplier orders for the day of or day after settlement? Nothing worse on your first day in the new business to run out of milk!
- Will you buy the cash float from the Seller or provide your own – do you know the currency breakdown you’ll require?
- Who is writing & approving the roster for the balance of the week after Settlement? Staff will of course need notice & expect clarity during this transition phase
Considering your options, planning, and working on obtaining your dream of Australian residency can be a daunting and often confusing endeavour which can leave you wondering if you’ll ever find success. Thankfully there are many available options!
“If taking over an established business in Australia never even crossed your mind, then now perhaps you can consider it. It is certainly a highly viable path to take in your journey to securing an Australian visa, plus it also ensures you and your family a source of livelihood once you move there. ” said Cayago.
Be assured, there is already a group of experts in the field ready to assist and guide you as you take this leap. To help you get started, take a look at this link for a list of hospitality business you might be interested in. Good luck!