Startups

If You Are Planning on Launching a Startup in Australia, This is What You Should Know

  • October 16, 2017
Sydney-Australia-Business

Over the past few years, there was an almost steady rise of far-right politics in western countries. First Trump with his infamous wall at the border with Mexico, then the immigrant crisis in Europe, culminating with the exit of the UK from the European Union, and so forth. It’s no wonder then that Australia followed suit and declared its own war on immigration. Recently, Australia’s PM, Malcolm Turnbull, stated that Australian nationals should get priority over foreigners for Australian jobs. Thus, a new visa system was established, replacing the old 457 visa program. And now you’re probably scratching your head thinking, what will this new visa program bring and how will it affect business and startups in the Land Down Under?

Sydney-Australia-Business

The Old 457 Visa Program

First of all, the old visa program was designed to compensate for the skilled labour shortage in the Australian job market by bringing in overseas workers. However, many now criticize this visa program, saying it was used and abused by businesses to bring in cheaper labour force and increase their profits. Whatever the case, it was certainly more accessible than its new replacement program, as can be seen by last year statistics. Out of the 95,758 people living with the 457 visa in Australia, 24.6% were from India, 19.5% were from the UK, and another 5.8% came from China. This 4-year visa program was ideal for startups as employers could find foreign experts, for example, English-speaking Chinese PR managers experienced with the use of WeChat and Weibo platforms that could help them expand into the lucrative Asian market.

The New Temporary Skill Shortage Visa Program

The Temporary Skill Shortage visa is divided into two categories, one two-year visa (short-term), and another four-year visa (medium-term). The short-term visa can be renewed once for another two years, whereas the medium-term visa makes the holder eligible for residency within a three-year time span. If you’re not sure whether you or someone else is eligible for either of these visa programs, you might want to get an expert’s opinion. You can find an immigration law specialist that can help you get the right visa and achieve your immigration goals.

Fewer Occupations Available

By last-year statistics, both the IT sector and the Professional, Scientific and Technical Industry have 16.3% of jobs sponsored in the 457 visa program, with the Accommodation and Food Services industry sponsoring another 11.9% from a total of 651 eligible occupations. To no surprise, the number of eligible occupations today has been greatly reduced from the 651 to the staggeringly low 435, as some 200 jobs have now been added to the list of removed occupations. In addition, caveats on 59 occupations will make it even more difficult for small businesses to find skilled workers overseas. Namely, caveats now require the sponsors to:

  • Have an annual turnover of $1 million or more
  • Have 5 (full-time) employees or more
  • Pay the applicant a higher minimum salary

Stricter Conditions for Visa Application

Stricter prerequisites for visa application will also be in play. As a result, applicants will have to be under the age of 45 at the time they apply for their visa. Passing the Labour market testing will be the next requirement. Moreover, they will need to be proficient in English with a requirement to score a minimum of 5 in each segment of the International English Language Testing System (IELTS) level 5. From 1 July 2017, applicants will need two years of relevant work experience in order to apply, and from 1 March 2018, this will be increased to three years. They’ll also have to have a clean criminal record prior to their application. Furthermore, the new TSS visa program will also require employers to contribute more towards the training of the Australian workforce in general. This, in particular, will make it harder for startups and other small businesses to prioritize foreigners in place of Australian workers.

Obtaining Citizenship

In addition, obtaining citizenship will also be a lot harder for foreigners from now on. Applicants will have to reside in Australia for a full four years now, instead of the previous one year. The citizenship test will also get an upgrade with the addition of more questions and a limit of only three failed attempts. Small businesses that seek to lure foreign workers to Australia with permanent migration will have to go back to the drawing board with this idea.

What Does the Future Hold for Immigration?

In short, nothing good. There’s a distinct possibility of adding new conditions for the visa program as well as the citizenship test in the near future. With the new trend of immigration control, and populist nationalism being mainstream, this scenario seems very likely. If anything, migration will get even more complicated as time goes on, so applying before further changes are added might be a good idea.

To sum up, Australia’s new tightened immigration control will see small businesses and startups looking for their employees elsewhere; as foreign workers will now be difficult to come by. This Trumpesque foreign policy is likely to stay in Australia for some time, so make sure you keep up to date on the current immigration process.

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