Choices

There are three main visa choices available to overseas staff coming to Australia for business reasons:

Subclass 456 - Business (Short Stay) & Subclass 977 - Electronic Travel Authority (Business Entrant - Short Validity)

Subclass 457 - Business (Long Stay)

Subclass 121 or 856 – Employer sponsorship for permanent residence

Business (Short Stay) – subclass 456 (or online version subclass 977)

It should be noted at the outset that the online version of this short stay visa (maximum 3 months) is not available to everyone, only those people holding passports from:

Andorra Austria Belgium Brunei Canada Denmark Finland France Germany Greece Hong Kong (SAR) Iceland Ireland Italy Japan Liechtenstein Luxembourg

Malaysia Malta Monaco The Netherlands Norway Portugal Republic of San Marino Singapore South Korea Spain Sweden Switzerland Taiwan United Kingdom - British Citizen United Kingdom - British National (Overseas) United States of America Vatican City

Holders of other passports lodge a paper application in the Australian immigration office closest to their place of residence.

This visa category is suitable for business trips for negotiations, meetings and visits to business sites but is not suitable for work in a general sense.  The visa permits the holder to work but only to carry out specialist activities that cannot be carried out by Australian citizens or permanent residents.  For example, the commissioning of new plant and machinery by a specialist engineer would be an activity that could normally be carried out by a 456 or 977 visa holder.

The processing time for electronic visas is virtually instantaneous while paper based applications typically take 3-5 working days.

Risks for employers include an employee overstepping the work limitation.  This will expose the company to adverse scrutiny from Australian immigration authorities and will prejudice future applications.

Subclass 457 - Business (Long Stay)

The 457 visa category is the most frequently used category for overseas staff wishing to stay longer than 3 months.  It is more-or-less the equivalent of the US H-1B visa.  The 457 visa permits long term residence (3 months to 4 years) and provides for multiple re-entry for the visa holder, his or her spouse and children.  It may now also include the same sex partner of the visa holder.

Our experience indicates that applications by well established, reputable companies for the sponsorship of senior executives and specialist professionals are fast-tracked and are often processed within days of lodgement; However they can sometimes be held up for several weeks due to the processing of medical assessments. Applicants must undergo a chest x-ray as a minimum health procedure.

Applications by new companies or those in respect of employees whose skills may be considered marginal, or whose salaries are below A$75,000 per annum often take longer processing (2 months and sometimes longer).

The 457 visa provides reasonable security for companies in that the visa holder is not permitted to work for any other employer whilst holding the visa.  Transfer between companies is not, however, impossible and sponsors cannot consider their staff to be ‘captive’ in any real sense.  Transfers from company to company can occur, but with difficulty.

In sponsoring an employee, companies assume a number of obligations to the Australian government.  These include paying the minimum salary (currently A$41,850 per annum), covering most health costs for the employee and family, as well as return travel costs to country of origin.  Private health insurance is a must in these cases (presently costing approximately $2,500 per annum for a single employee and $3,600 for a family unit).

Negative aspects of the visa for the visa holder include not being eligible for social security payments and Medicare benefits.  Education costs for children are higher too as they are treated by schools as foreign students and are charged fees accordingly.  Employees may also find it more difficult to obtain bank finance for the purchase of a home while on a temporary visa. 

Subclass 121 or 856 – Employer sponsorship for permanent residence

Except for the most senior of its executives a company would not normally be well advised to sponsor an employee for permanent residence from the outset.  The reason is simply that the employee, on gaining permanent residence (and subject of course to the terms of the employment contract), may leave the company and work for anyone.  Thus, the investment made by the company in that employee may be lost.  Worse still, the employee may be poached by a competitor.

A sensible policy would be to sponsor initially for a 457 visa and then at a much later date, consider sponsorship of the employee for permanent residence (perhaps accompanied by a renewed contract for a minimum term of employment).

As indicated above, however, temporary resident employees with families including school age children will find it expensive to live in Australia and may have difficulty raising Bank finance for the purchase of a home.  Consequently, this factor is an important one for consideration when deciding on the level of sponsorship the company is prepared to accept and whether the initial sponsorship will be for temporary or permanent residence.  Once the worker qualifies for the subclass 856 visa he or she (and family unit members) become entitled to Medicare and are treated as Australians in the education system.  They will also have less difficulty raising bank finance for the purchase of a home.

From the company’s point of view, sponsorship for permanent residence has the benefit that it is no longer obliged to observe the undertakings required for the 457 visa.

Processing times for permanent residence are much longer than for temporary residence.  Subclass 121 and 856 often take 6 months or more.  More extensive security and health checking also takes place.  For this reason, companies frequently adopt the strategy of sponsoring initially for a subclass temporary 457 visa, followed immediately by an application for an onshore permanent visa (the subclass 856 visa).

Recommendations

Each case will be different and must be decided on its own merits.  Professional advice should be obtained at the outset.  None of the information set out in this article should be acted upon without independent advice specific to an employer’s circumstances.

In general terms the subclass 457 visa is the visa of choice for employers sending staff to Australia and permanent residence should be left as a reward for loyalty, to be considered at a later date.

The short term 456 visa should be considered only for very short term assignments where urgency and speed are critical factors.  Usually, a longer term visa like the 457 visa can be applied for once the employee is in Australia if a longer term stay is needed.

The following table may be of use: