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biz migrates

BUSINESS MIGRANTS BEWARE: Do you really have the ownership in the “Eligible Business”!?

This article will talk about the requirement that the business migrant must have “substantial ownership interest” in the “eligible business”.

The general rule to meet this substantial ownership requirement is that if the business turnover is less than AUD$400,000, fifty-one percent (51%) is required.  If more than AUD$400,000, thirty percent (30%) is required.  If the business is a listed company, at least ten percent (10%) is required.   This is the simple part.  The complicated part is where a business is owned by a trustee company of a trust.  It is quite common in Australia that investments and businesses conducted through a trust vehicle. There have been past cases where migrants have failed the “substantial ownership” requirement due to legal technical difference between ownership interest and beneficial interest.

Section 134(1) of the Migration Act provides that “ownership interest” includes interest in the business as a shareholder in a company that carries on the business, a partner in a partnership that carries on the business, or a sole proprietor.  This definition seems simple enough, but in reality, it is not as simple as it seems.

But what about a trust structure?   Trust has many forms – fixed or unit trust, discretionary trust, special purpose trust, bare trust and hybrid trust.   How do you know your “ownership” meets the migration requirements?

Let’s take for instance the business is carried on through a unit trust and the migrant owns units in the unit trust.  I must emphasis that many property development projects are conducted using unit trust.  As a unit holder, you may have certain legal entitlements.  But does this satisfy the “substantial ownership” requirement?  The answer is, NO!  As a unit holder of a unit trust, you merely have a beneficial interest in the “eligible business”, NOT a legal ownership interest.  The Court in the Zhonghua’s case (which we looked at last week) found that having beneficial interest as a beneficiary of a trust does not meet the “substantial ownership” requirement.   

Now, let’s consider the flipside and say you own shares in the trustee company but the trust is a discretionary trust, or more commonly known as a family trust, where you do not have any fixed entitlements? In fact, under a discretionary trust, the beneficiary only has a “mere hope or expectancy” to receive benefits from the trust asset, there is not definite entitlement to distribution.  In this instance, even if the migrant has shareholding in the trustee company, will the migrant still meet the “substantial ownership” test?  A further question for business migrant to consider – although you may be a shareholder of a company, how do you know whether the company is actually a trustee company of a discretionary trust?  This is problematic.

The migration regulations may appear straight forward, but in reality, it may not be as straight forward as it seems.   Please beware of legal technicality!

Writer:

KELVIN TANG is the Principal Partner of TANG Legal.   His areas of practice include Investment Law, Commercial and Corporate Law, Property Law and Immigration Law.  Relevant to this article, his experties, knowledge and experience include representing property developers and new migrants with acquisition of property, structuring of investment vehicle, joint venture transaction, and advice on commercial transactions.
Email:                     KT@TangLaw.com.au
Telephone:           +618 9328 7525



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empty-pockets-no-money

FAMILY LAW: How To Prevent Your Ex-Partner from “Emptying Your Pocket”?

FAMILY LAW: How to Prevent Your Ex-Partner from “Emptying Your Pocket”?

After separation, it is common that one of the partners may do all sorts of things to defeat any legitimate claims that the other partner may have in relation to his/her assets, including selling or transferring the assets to overseas or hidden it somewhere without trace. In some extreme cases, a partner may decide to spend or waste all the liquidated assets after separation, not for commercial reasons but to do it simply as retaliation.
The question many people frequently ask is how to prevent this from happening, before it is too late.  In a situation like this, applying for injunction in the Family Court is usually the answer. An injunction is a court order to stop someone from doing something or, in some situations, to make someone doing something.
For property issues, you can get an injunction to stop your ex-partner from selling, mortgaging or otherwise dealing with a property. If the property has already been sold or the asset in question is cash, it is possible to obtain an order to ‘freeze’ bank accounts or an order to seize the cash or any valuables. Interestingly, there was a case in the Family Court in which the wife had successfully obtained a court order to seize a black leather briefcase belonged to the husband based upon the reasonable belief that the husband had kept substantial amount of cash in that briefcase – In the Marriage of Mazur (1991) 15 Fam LR 574.
In appropriate situations, the Family Court can also make orders and injunctions that affect third parties including for example an order to stop a trustee to deal with superannuation entitlements or an order to prevent a bank from selling a house.
An injunction under the Family Law Act is available to both married and divorced people, as well as to parties in a de facto relationship, including same-sex relationship.  Typically, an injunction application is made on an urgent and ex-parte (meaning that it is made without any notice to the other party) basis. If the matter is particularly urgent, it is possible that the Family Court will hear your application on the same day when you filed the application, sometimes even outside usual court hours. If the application is ex parte, your ex-partner will not know anything about it until after the orders are made by the Family Court, which is designed to prevent the ex-partner from doing anything that may frustrate your claims while you are waiting for the court to hear your application.
Once an injunction is granted and while it is still valid, your ex-partner will be given the opportunity to challenge it. If your ex-partner files an application to oppose the injunction, the Family Court will hear the story from both sides and make a determination as to whether the injunction should remain. However, it is often that the purpose of stopping the ex-partner from taking any drastic actions about his/her assets is achieved by that time.

The key in an injunction application is usually timing. You are racing against time and sometimes if you acted a little too slow, you may forever lose the opportunity to stop your ex-partner from siphoning the assets beyond your ability to trace it. For this reason, if you have any concerns that your partner or ex-partner may be doing something in secret about the family assets, you need to act now before it’s too late.

About the Writer

Kelvin Tang

Kelvin has over 14 years’ experience practising law in Western Australia. He is the founder and Principal Partner of Tang Law based in Perth, Western Australia. Kelvin is a Registered Migration Agent (MARN: 1386452) and has extensive experience in providing family law advice to clients, making divorce applications and applying for Consent Order. Kelvin is able to offer his clients clear and practical advice in relation to children’s disputes, property settlements between married and de-facto couples, spousal maintenance and child support.

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business-visa

Can Property Investment be an “Eligible Business” for Business Visa in Australia?

Can Property Investment be an “Eligible Business” for Business Visa in Australia?

I am often asked by new and perspective business migrants on whether they can invest in property for the purpose of satisfying the Australian Business Visa requirements.  The good news is that it is possible. Investment in property may [emphasized] meet the migration requirements.  
 
I must emphasize 2  important points: (1) Passive investment (and more specifically, provision of rental properties to the public) and smaller “project” based property development will NOT meet the migration requirements; and (2) Even if the migrant’s proposed business in property investment meets the State’s guidelines in bringing in substantial and exceptional benefits and thus obtained nomination by the State or Territory, this itself does NOT automatically mean that the Commonwealth migration requirements are met.  
Under the Commonwealth migration regulations, a business migrant must satisfy three (3) conditions under the Act: (1) The business proposed or carried on by the migrant must be an “eligible business”; (2) The migrant must have obtained a substantial ownership interest in the eligible business; and (3) The migrant must actively participate at a senior level in the day-to-day management of the eligible business.  If the migrant fails to satisfy these requirements, the Minister may cancel the visa.  Hence, business migrant, please BEWARE!
This article briefly examines the “eligible business” requirement.   In the case of Zhonghua v Minister for Immigration and Citizenship (BC201102754), the migrant, holder of sub-class 132 Business Talent visa, invested AUD$3,000,000 into a property development project. There were submissions by the migrant that application to re-zone the property was made to develop apartments.  However, the Tribunal found that the investment did not pass the initial stage of purchasing the land.  No actual development has taken place other than owning the land and making application to re-zone the land.  For this reason, it cannot be described as a business.  As such, the migrant’s investment did not satisfy the “eligible business” definition. However, what is important from this case is that in the judgment, the following comment was made by the presiding Senior Member, Mr Egon Fice: “… if the development proceeds, it might satisfy the eligible business definition in that it might create or maintain employment in Australia or result in commercial activity and competitiveness within sectors of the Australian economy.”
 
Further, under the case law, the test of what constitutes an “eligible business” requires more than just satisfying the conditions under the migration regulations.  The Courts require that the business has repetitiveness of activities and some permanence characteristicsPuzey v Commissioner of Taxation [2003] FCAFC 197.
For the professionals who assist business migrants with their investment (such as migration agent, accountant, and real estate agent), you should find this article beneficial or at least relevant.   Australian Courts have strict expectations that the requisite standard of care is met and professionals could be found personally liable for negligence or wrongdoing if the standard is not met.  Here is a thought:  What do you need to do (or must not omit to do), in order to meet the requisite standard of care? 
 
For businesses seeking investment capital from the business migrant (for instance, property development company), beware of “representations” (such as statements and forecasts) that you make to the investor, buyer or migrant.   If your representations are subsequently found to be false, even if it was not your intention to lie, you can be liable for damages for having engaged in “misleading or deceptive conduct” under the Consumer Act.  This is a huge exposure to liability. 
 
There are also cases where migrants have failed the “substantial ownership” requirement due to technical difference between legal ownership interest and beneficial interest.   The ownership structure of the project company is extremely important.  My next article will examine the ownership issue in more details.

Writer:

KELVIN TANG is the Principal Partner of Tang Law.   His areas of practice include Investment Law, Commercial and Corporate Law, Property Law and Immigration Law.  Relevant to this article, his expertise, knowledge and experience include representing property developers and new migrants with acquisition of property, structuring of investment vehicle, joint venture transaction, and advice on commercial transactions.
Email:                     KT@TangLaw.com.au     
Telephone:           +618 9328 7525
 
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Deportation

What Should You Do If Your Australian Visa Is Cancelled?

Criminal Deportation/Visa Cancellation

Cancellation of visa (and deportation) is mandatory for people who are in prison and who failed the character testsection 501(3A) of Migration Act 1958.  A person who has been sentenced to imprisonment of 12 months or more (even if it is at any time in the past) will fail the character test.
This means deportations and cancellations of visas are now automatic, as it is mandatory, and moreover without notice.What should I do if I received advice from Department of Immigration that my visa is cancelled?

If your visa was cancelled as a result of your criminal conviction, you will have an opportunity to request for revocation of the cancellation decision.  However, you must do so within 28 days.   If you failed to apply within this timeframe, you will lose your opportunity.  Consequences are that you will be held in the detention centre until you are deported.
The decision of cancellation itself cannot be appealed, rather, you must apply within the timeframe to revoke the cancellation decision.  If you are successful, the cancellation decision will be revoked.  The effect of revocation is that the cancellation decision will be reversed and your visa reinstated.
In making the request for revocation of the cancellation decision, you should also make proper submissions and provide the Department with supporting materials regarding your personal circumstances and persuade the Department to revoke the cancellation decision.  

What submissions to make in requesting for revocation of visa cancellation?

Whilst the decision-maker has the discretion to decide whether to revoke a mandatory visa cancellation, the decision-maker must take into account primary considerations:
  1. Protection of the Australian community from criminal or other serious conduct.  This involves giving consideration to the nature and seriousness of your conduct to date and risk to the Australia community should you further engage in other serious conduct.
  2. The best interest of minor children in Australia.  This consideration is only relevant if there is a child under 18 years old at the time the decision whether to revoke the mandatory cancellation is expected to be made.
  3. Expectations of the Australian community.  This consideration involves determining whether there is an unacceptable risk that you will re-offend or engage in serious conduct again.
The decision maker also has to take into account other relevant considerations such as the strength, nature and duration of ties you (and your family) have to Australia, impact on Australian business interests if your visa is cancelled, the extent of any impediments that you may face if you are removed from Australia to your home country in light of your age, heath, language or cultural barrier, etc.

What materials should I provide in support of my request for revocation?

This depends on your circumstances and which considerations are most relevant to your situation.  In a very general nutshell, you may need to provide independent support documents such as character references, expert reports, pre-sentencing and re-release reports, etc.
Remember, you have to persuade the decision-maker, and the decision-maker in coming to a decision, has to follow a set of guidelines.  You should make truthful submissions that can satisfy the guidelines followed by the decision-maker and provide credible documents or evidence in support of each of your submissions made.

Can I appeal if the visa cancellation decision is not revoked?

There are two (2) possibilities here:
  1. Where the decision not to revoke is made a department delegate, you may apply to the AAT for review.
  2. Where the decision is made by the Minister, you may appeal to the Federal Court for judicial review. The AAT is not able to review the Minister’s personal decisions. 

I am still feeling vulnerable, unsure of what my rights are and what I can do?

Cancellation of visa is a very serious matter with serious consequences.  If you are not sure what to do, immediately consult an immigration lawyer.  Contact us for advice.

You need to act promptly as there is a strict time limit for you to exercise or protect your rights.

About The Writer 

Kelvin Tang has over 14 years’ experience practising law in Western Australia. He is the founder and Principal Partner of Tang Law based in Perth, Western Australia. Kelvin is a Registered Migration Agent (MARN: 1386452) and has extensive experience in providing migration advice to clients, advising on “Eligible Businesses” within the definition of the Migration Regulations, assisting migrants (investor of the business) with satisfying migration requirements, making visa applications and appealing cancelled or refused visas in the Federal Court of Australia, Administrative Appeals Tribunal and Migration Review Tribunal. Kelvin also has extensive experience in civil litigation, commercial and corporate law matters.
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Visa Denied

TANG LAW: How to Appeal or Review Visa Refusal?

If your visa is being cancelled or your application for visa is unsuccessful, it is usually possible to appeal or apply for review of the decision.   There are three (3) types of appeals and/or reviews:
  1. Merits review through the Administrative Appeals Tribunal
  2. Judicial review through the Federal Court
  3. Intervention by the Minister for Immigration.

Strict Time Limit

However, you must be aware of the strict time limit imposed on your right to appeal or apply for review. 
If your visa is being cancelled or your application is being refused, you need to act immediately to avoid losing your right to appeal as a result of time limitation expiring. 
Do not forget, you need to allow adequate time for your lawyers to assess your appeal.  In considering an appeal, there are several issues that must be considered:
  • Do you have a right to appeal?
  • If so, what type of reviews are you entitled to – merits review or judicial review?
  • What are your grounds of appeal?
  • Does your evidence support the grounds that may be available to you?

Merits Review – Administrative Appeals Tribunal (AAT)

The Refugee Review Tribunal, the Migration Review Tribunal and the AAT deal with merits review.   Since 1 July 2015, the former two tribunals have merged into AAT, which is now the only merits review body. 
In a merit review, the tribunal puts itself in the shoes of the original decision maker and review the merits of the decision by reconsidering the facts, law and policy aspects relevant to the original decision, and come to a decision as to whether the original decision is correct and therefore be affirmed, or whether a correct and preferable decision should be made.  The Tribunal will consider the evidence from a fresh perspective.
Merits review is more or less your “second attempt” at the application.

Judicial Review – Federal Court of Australia

Decisions of the immigration department in relation to refusal or cancellation of visa is a type of administrative decision.  In coming to an administrative decision, the decision-maker must follow the correct legal process.  If the decision-maker failed to follow correct legal process in making a decision, it can be challenged via judicial review by appealing to the Federal Court of Australia.
If the Court finds that a decision is unlawful, the Court has the power to:
  • Order that the decision be quashed and or set aside.
  • Order that the decision-maker follow the correct legal process and re-make the decision.
  • Declare a legal position, for instance, that the decision is legally incorrect.
  • Order injunctive reliefs.
There are many grounds of judicial review, some examples include:
  • An error of law, where the decision maker wrongly applied the law.
  • The decision-maker wrongly took into account of irrelevant considerations or failed to take into account relevant considerations.
  • The decision-maker acted beyond its responsibilities or acted with improper purpose.
  • The decision-maker, when coming to a decision, acted very unreasonably that no reasonable decision-maker could reach that decision. 

Ministerial Intervention

In many circumstances (but not always), it is possible to seek ministerial intervention after receiving a negative decision from the Tribunal.  Under the Migration Act 1958, the Minister for Immigration has the power to interview and grant a visa on public interest ground.
There are certain circumstances where the minister cannot intervene even after a decision by a tribunal. These include:
  • The decision by department of immigration not to grant a visa is not a decision that can be reviewed by the relevant review tribunal;
  • the review tribunal has sent your case back to the department for further consideration and one of the decision-makers has made a subsequent decision on the visa;
  • your review tribunal decision was made before 1 September 1994
  • a finding by the tribunal that the application made to the tribunal was invalid as it was not made within the required timeframe;
  • a decision of the AAT that is not in respect of an MRT reviewable decision or a protection visa decision.
In determining whether to exercise the power and intervene, the minister looks at the submissions from a “humanitarian” perspective. This generally requires consideration of larger-picture issues such as the public interests at large, the interests of the nation, and other interests such as economic, trade, or cultural interests.

Past Cases & Experience

TANG LEGAL has helped applicants with appeals and reviews in many contexts of visa cancellation and refusal:
  • Revocation relating to Student Visa
  • Criminal Deportation (see Criminal Deportation)
  • Character ground – Failed to demonstrate good character
  • Genuineness of marital or spousal relationship
  • Termination of marital or spousal relationship and domestic violence
  • Genuineness of legal child
  • Breach of visa conditions
  • Genuineness of company sponsorship and nomination
  • Termination of employment
  • Refusal of protection visa
  • Discovery of incorrect, false or misleading information given to Immigration

About The Writer 

Kelvin Tang has over 14 years’ experience practising law in Western Australia. He is the founder and Principal Partner of Tang Law based in Perth, Western Australia. Kelvin is a Registered Migration Agent (MARN: 1386452) and has extensive experience in providing migration advice to clients, advising on “Eligible Businesses” within the definition of the Migration Regulations, assisting migrants (investor of the business) with satisfying migration requirements, making visa applications and appealing cancelled or refused visas in the Federal Court of Australia, Administrative Appeals Tribunal and Migration Review Tribunal. Kelvin also has extensive experience in civil litigation, commercial and corporate law matters.
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