Net Assets for Business Investment Visa

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Net Assets: Requirements for Business Investment Under 888 Visa

With so many business opportunities awaiting aspiring entrepreneurs and existing businesses in and outside of the country, obtaining a business visa under subclass 888A serves as a pathway not only to expand one’s business in Australia, but also acquire permanent residence here and enjoy the perks of the Australian way of living. 

But that being said, acquisition of a business visa under any subclass entails a number of eligibility requirements, one of which is net assets. What are these and what is the minimum required amount for a net asset value, we’ll elaborate more on that and help you understand it better in this blog post.

What Are Net Assets?

A net asset, or what can also be referred to as a net asset value, is the calculation of a company or business’ total value minus the liabilities. When applying for a permanent business visa under subclass 888A, this is a chief requirement as it helps the Department determine a company’s overall financial health and position.

Not needless to say, the higher the amount a business’ net asset value is, the higher the likelihood of its business visa application to be approved.

Overview of Business Investment Under Subclass 888

A business investment under Subclass 888 is a state-nominated permanent visa that allows business owners and investors to reside in Australia on a permanent basis. It’s important to note that qualified applicants are those already holding a provisional 188 visa for the last four years and wish to apply for PR under this stream.

For the purposes of 888 nomination and visa, the term “business investment” encompasses investments in the following categories:

Property, Plant, and Equipment

This includes the acquisition cost of office spaces or warehouses specifically purchased for the operations of the business.

Purchased Goodwill

Investments made in the form of purchased goodwill are also considered as part of the business investment.

Inventory

Department will only take into consideration the closing balance of the most recent financial statement. Please note that inventory is not cumulative.

Important

Cash held in the company’s bank account will not meet the criteria for business investment. However, we cannot provide specific examples of how to allocate the business investment, as it is ultimately the decision of the business owner to invest in ways that best suit their business needs.

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Net Assets and Requirements

Business Investment Criteria:

Net Assets and Job Creation Requirements: To qualify for nomination and visa under the 888A category, you must meet at least two out of the following three requirements:

a) Employment of Full-time Employees: Your business(es) must have employed at least the equivalent of two full-time employees (excluding family members) consistently over the last 12 months.

b) Net Value of Personal and Business Assets:

Your total net value or you and your spouse’s combined personal business assets in Australia amount to AUD $600,000

In New South Wales, it must be:

  • AUD $900,000 if your business is located in Sydney, or
  • AUD $600,000 if your business is located in Regional NSW

c) Net Value of Business Assets:

Your total net value or you and your spouse’s combined personal business assets in Australia amount to at least AUD $200,000

In New South Wales:

  • AUD $300,000 if your business is located in Sydney, or
  • AUD $200,000 if your business is located in Regional NSW

Please note that “personal assets” refer to items of value owned by the applicant. This is not limited to cash held in a personal account or property acquisition; it may include financial securities, gold and silver, motor vehicles, and other valuable items. The management or dispensation of personal assets in Australia is entirely at the discretion of the applicant.

During the permanent stage of the application, applicants will be required to provide evidence that their personal assets in Australia were held for a minimum of 12 months prior to the application submission.

Creating New Jobs in NSW

While holding your provisional business visa, you must have created no less than two new full-time equivalent jobs. Your employees working for your main business (or businesses) must be:

  • Australian citizens, Australian PRs, or New Zealand passport holders.
  • Not members of your family.

Meanwhile, if you bought an existing business/company, you must show proof of genuine business growth since taking over, which should be either:

  • An annual turnover increase of at least 10%, or
  • An annual increase in business assets of at least 25%

Conclusion

Business visa requirements such as the total net value of assets applicants possess are important to make sure that they have the necessary financial means and resources to positively contribute to the Australian economy.

The requirements also ensure that those who apply for the visa under a certain stream have the genuine intention to conduct business and investment activities here, and submit all pertinent and correct documents necessary to be granted entry.

Whatever type of visa you wish to apply to go to Australia, Parish Patience has the most qualified migration agent and lawyer to properly assist you and make the process as stress-free as possible. Please call our office on 02 9286 8700 or email:ppmail@ppilaw.com.au

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    Frequently Asked Questions (FAQs)


    Have other questions about this type of visa? We gathered and answered some of the most
    frequently asked questions below.

    What is net assets?

    A statement of nets assets comprise both a company’s financial and non-financial assets after subtracting the liabilities. Under it are net tangible assets, which are a business’ total physical assets minus its liabilities and non-physical assets. Another one is net operating assets, which are a company’s total assets dedicated to its operational activities minus liabilities.

    How to calculate net assets?

    Net assets formula can be best illustrated as adding everything you own, your assets; and subtracting them from what you owe, your liabilities. The sum will be your total net assets. When in doubt, hire an experienced financial expert to help you. 

    What is the minimum net asset for 888 visa?

    You must have at least AUD $200,000 for the last 12 months right before application, and that they were acquired legally and not through unlawful means.