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commercial-law

CAN PROPERTY INVESTMENT BE AN “ELIGIBLE BUSINESS” FOR BUSINESS VISA?

Blog & Articles

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 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: [email protected]

Telephone: +618-9328 7525

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 characteristics: Puzey 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.

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divorce

What To Do When You Divorce?

Anfernee Lai Perth, Blog & Articles, Child Support, Divorce, Family Court, Family Court Case, Family Disputes, Family Law, Family Law Perth, Tang Legal
WHAT TO DO WHEN YOU DIVORCE?
46,498 divorces granted in Australia in 2014
(Statistic obtained from the Australian Bureau of Statistics, 3310.0 – Marriages and Divorces, Australia 2014)

DID YOU KNOW?

Almost 1 out of 3 marriages would result in divorce and the median duration from marriage to divorce is about 12 years.

The statistic may sound depressing but the reality is that you or one of your friends may one day need to face the prospect of divorce and it is helpful to equip yourself with some knowledge about that process.

HOW TO APPLY FOR DIVORCE?

In Australia, we have adopted the principle of no-fault divorce. This means that the court does not require to consider which partner was at fault in a marriage breakdown. In order to apply for divorce, you will only need to prove an irretrievable breakdown of the relationship which is demonstrated by 12 months of separation.
Once you have been separated for more than 12 months, you can apply for a divorce through the Family Court by filing an Application for Divorce (Form 3). You do not need the consent of your partner to apply for divorce. Generally, you are not required to physically attend court.
You may apply for a divorce in Australia even if you were married overseas, as long as you or your partner meets certain requirements.
It is important to understand that divorce application does not resolve children and financial matters.

WHAT WILL HAPPEN TO OUR ASSETS?

First of all, there is NO automatic split of assets on a 50/50 basis and each case is different.
If you and your partner cannot reach an agreement regarding property division, the decision will have to be made by the court. In doing so, the court will adopt a 4 steps process:
        Step 1: Identify and determine the net value of all properties
      Step 2: Assess the contributions (including financial contribution, non-financial contribution and contributions to the welfare of the family) made by each partner and divide the assets according to the contributions
Step 3: Identify the respective needs of the partners by taking into account factors such as age, health, income, earning capacity and number of dependents and adjust the assets division accordingly
Step 4: Determine whether the resulting division is “just and equitable” and determine the final assets division
Whilst you cannot make an application for divorce until 12 months after separation, you do not need to wait for any period before you are entitled to have the assets divided between you and your partner. 

WHAT ABOUT OUR CHILDREN?

If you and your partner cannot reach an agreement about your children, similarly, the decision will have to be made by the court.
In Australia, the term “child custody” is no longer used. Instead, it is referred to as parental responsibility.  In deciding whether to make a particular parenting order in relation to a child, the court must regard the best interests of the child as the paramount consideration. In deciding what is in the best interests of the child, the primary considerations are the benefit to the child of having a meaningful relationship with both parents and the need to protect the child from physical or psychological harm.
In addition, the Court will also consider other factors including views expressed by the child, the child’s relationship with other persons (e.g. grandparents and siblings), the likely effect of any changes in the child’s circumstances, the child’s background, the child’s attitude and any family violence.
The types of parenting orders you may seek from the court include:
·         who a child live with;
·         who  a child will spend time with;
·         who a child will communicate with;
·         whether you can take the child to overseas holiday; or
·         who has responsibility for major decision about the child.

SO WHAT SHOULD I DO WHEN DIVORCE IS IMMINENT?

It is undoubtedly a very stressful experience for anyone to have to go through separation of relationship. The first thing you should do is to calm down and don’t allow your emotions to get in the way of rational thinking. You need to understand that most family law disputes can be resolved amicably without determination by the court. Once you are ready, you should, at the earliest opportunity, obtain legal and financial advice about your rights and financial standings as a result of the separation.

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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biz migrates

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

Blog & Articles, Business Migration Australia, Business Visa, Chinese migrates in Australia, IMMI, Immigration Department of Australia, Immigration Law, Perth Immigration Lawyer, Perth Lawyers, Visa 132, Visa 890, Visa 892

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:                     [email protected]
Telephone:           +618 9328 7525



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empty-pockets-no-money

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

Binding Financial Agreement, Blog & Articles, Child Support, Chinese Lawyer, Family Disputes, Family Law Perth, Nortbbridge Lawyer, Perth, Perth Lawyers

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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