Business Innovation 188A/888A visas frequently asked questions

Business investment requirement for NSW nomination

To be nominated by New South Wales (NSW) for a Permanent Business Innovation visa 888A, you must meet the business investment requirement.

If your business is in Sydney:

  • you must have invested at least A$500,000 in your business for at least the last 12 months.

If your business is in regional NSW:

  • you must have invested at least A$300,000 in your business for at least the last 12 months.

The business investment must be in property, plant and equipment, inventory, or purchased goodwill.

How do I meet the requirement?

You must have purchased the assets at least 12 months before applying for NSW nomination for the permanent 888A visa. You will need to demonstrate that you have held the investment until the time of application.

To assess this, we will look at the most recent financial statements, such as the business’ balance sheet at the time that you apply for NSW nomination for the permanent 888A visa.

Investment in property, plant and equipment and/or inventory that is not in the business’ financial statements and not used for the ongoing operations of the business will not count towards the business investment requirement.

What if the value of the fixed asset I have invested in has appreciated or depreciated?

We will assess the cost price/purchase amount of the fixed asset purchased.

Example 1: You purchased plant and equipment three years ago for A$100,000 and the value of this plant and equipment has decreased to A$75,000 at present.

Assessment: A$100,000 will count towards the business investment requirement.

Example 2: You purchased property three years ago for A$250,000 and the value of the property has increased to A$300,000 at present.

Assessment: A$250,000 will count towards the business investment requirement.

How do I demonstrate the amount of my investment in inventory?

The amount of inventory in the balance sheet of the most recent fiscal year at the time of application will count towards the business investment requirement.

If I have bought an existing business, what amounts count towards the business investment requirement?

If you have bought an existing business, the existing plant and equipment as outlined in the contract of sale for the business will not be counted towards the business investment requirement.

Only new investment after you have purchased the business in plant and equipment will count towards this requirement.

Example: I have purchased an existing business. In the contract of sale for the business, A$100,000 is stated as the cost of the plant and equipment of the business.

I am now applying for NSW nomination for the permanent 888A visa. My most recent financial documents state that the business has A$250,000 plant and equipment.

Assessment: Only the amount that you have invested in plant and equipment after purchasing the business will be counted towards the business investment requirement.

This can be assessed from the depreciation schedule for the relevant assets that demonstrate the cost price/purchase amount of the assets and the date the assets were purchased.

How do I demonstrate my investment in goodwill?

If you have purchased an existing business, the amount that has been specified for goodwill in the contract of sale for the business will count towards the business investment requirement.

When you apply for NSW nomination, if the amount for goodwill in the balance sheet is higher than the amount for goodwill that was in the contract of sale for the business, only the goodwill amount in the contract of sale will count towards the business investment requirement.

Example: I purchased an existing business several years ago after being granted my 188A visa. The amount for goodwill in the contract of sale of the business was A$300,000. I am now ready to apply for NSW nomination for the 888A visa. In my most recent balance sheet the goodwill amount is A$400,000.

Assessment: The A$300,000 for goodwill in the contract of sale to purchase the business will count towards the business investment requirement.

If I invest in property that will be sold, will this count towards the business investment requirement?

If your business activities involve dealing in land (that is, you acquire land for the purpose of building a residential or commercial property and selling the developed property), the value of that land is not included in calculating the business investment requirement.

Likewise, the construction costs of developing the property for purposes of sale, as well as inventory of 'unsold properties', will not count towards the business investment requirement.

This is because the property is not considered to be used for the ongoing operations of the business, as the purpose of the business is to develop and sell land and buildings for a profit.

When do investments in property, plant and equipment, inventory and/or purchased goodwill count towards the business investment requirement?

A balance sheet template from business.gov.au has been provided below.

What counts

The assets with an asterisk (*) in the balance sheet template (leasehold, property and land, renovations/improvements, furniture and fitout, vehicles, equipment/tools, computer equipment) will count towards the business investment requirement, provided the assets were not acquired as part of the purchase of a business.

What does not count

  • Other assets, such as cash, do not count towards the business investment requirement.
  • Paid up capital does not count towards the business investment requirement.
  • A shareholder’s loan does not count towards the business investment requirement

Table 1. Three-year balance sheet

Download the balance sheet template

Balance sheetYear 1Year 2Year 3

Current assets

   

Cash

   

Petty cash

   

Inventory

   

Pre-paid expenses

   

Fixed assets

   

Leasehold*

   

Property & land*

   

Renovations/improvements*

   

Furniture & fitout*

   

Vehicles*

   

Equipment/tools*

   

Computer equipment*

   

Total assets

   

Current/short-term liabilities

   

Credit cards payable

   

Accounts payable

   

Interest payable

   

Accrued wages

   

Income tax

   

Long-term liabilities

   

Loans

   

Shareholder’s loan

   

Total liabilities

   

NET ASSETS/OWNER’S EQUITY

   

WORKING CAPITAL

   

Note: * will count towards the business investment requirement, provided the assets were not acquired as part of the purchase of a business.