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Case Study: How Did Our Lawyers Handle Complex Case involving Commercial Transactions & Migration Law?

Blog & Articles, Business Disputes Perth, Business Migrants, Commercial Disputes, Commercial Law, FIRB, Immigration Law, Migration Law, Perth Immigration Lawyer, Tang Legal, Visa 132

The Story

Mr Lee and his family was granted permanent resident visa.  To get the grant of the visa, Mr Lee entered into an agreement with the State that he will, amongst other conditions:

11) Invest at least $1,500,000 into an “Eligible Business” in the State;  and
22) The “Eligible Business” must employ at least five (5) full time employees who are either citizen or permanent residents of Australia.
Mr Lee looked at many possible investments in the State but repeatedly encountered these problems:
1.       Language barrier – Mr Lee does not speak or understand English.  Communication was a huge barrier.
2.       Cultural difference – Mr Lee operates a large enterprise in Asia and he has many personnel under him to manage and run his businesses for him. He was surprised to learn that owner of the business here is very often key person to the business.  He will not be able to commit 100% into the business due to his other commitments.  Mr Lee is also concerned about the safety of his investment.
3.       Constant uncertainty as to whether the business is in fact an “Eligible Business” and whether it can help him satisfy the migration requirements.

 

Mr Lee finally decided to invest with a property developer.  Mr Lee’s instructed us to advise and represent him.

 

Solution

We advised Mr Lee that his proposed venture and transaction must be structured to achieve the overarching purposes of:
11) Complying with Commonwealth migration requirements and Mr Lee’s Agreement with the State; and
22) Securing his commercial interests and his capital.
In terms of Commercial Law, Mr Lee took the following steps with our advice:
1.       Formation of legal structures for Mr Lee to undertake the investment.
Amongst other issues, segregation of risk, protection of personal assets, complying with migration requirements, and tax implications are important considerations in undertaking this task.
2.       Negotiation and formulation of the transaction structure with the property developer.
Amongst other considerations: 
·         Specific focus on ownership structure, investment vehicle, investment structure, key personnel required, role and obligations of Mr Lee and the property developer is important for migration compliance. 
·         Control of project and funds, security or collaterals, timing of project, possible variations, and terms and conditions of investment are important considerations for protection of capital.
·         Transfer duty and tax implications must be considered PRIOR TO entering into formal agreements.
3.       Prepare and advice on the formal agreements required in order to put together the transaction.
4.       Carried out due diligence on the proposed investment and the property developer.
5.       Completion and settlements of the agreed transactions.

In Migration Law:

 

11) We conducted a full review of Mr Lee’s initial business plan and Agreement with the State, and we advised Mr Lee that given the changes to his agreement with the State, he needs to notify and obtain approval from the State for the variation.  Note:  The formal agreements between the parties were made subject to Mr Lee obtaining an approval to amend Agreement with the State.
22)  IMPORTANT issue to overcome: Investment in property is very often seen as a passive investment and does NOT qualify as an “Eligible Business”.   Special attention must be given to how the transaction is structured to avoid complications.
33) Also given his increase in the amount of investment into the “Eligible Business”, we advised that he could negotiate with the State for a more lenient requirement on the number of full time employees.

Outcome

Mr Lee and the property developer were successful in reaching an agreement.   We strategically structured mechanism into the transaction to achieve the overarching purposes of satisfying the migration requirements and protecting his commercial interests.

Upon our conduct of legal due diligence and comprehensive checks on the proposed investment and the property developer, Mr Lee was satisfied with the results.
Mr Lee also obtained approval and a more favorable agreement with the State for the proposed investment, as we were successful in negotiating with the State in reducing the number of employee from five (5) to two (2).  

The property project has since commenced.

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.