Friday, 22nd of May 2015

 

Issue #1 May

 

TOP STORY

457 visa sponsor fined in Darwin
 
 

ISSUES OF THIS MONTH

Darwin business fined $175,000 for exploiting and underpaying foreign workers on 457 visas

 

Business Succession Planning

 

Australia to strip citizenship of Australian-born jihadis with immigrant parents

 

This country has the best minimum wage in the world

 

Visa and Citizenship Costs to Rise in Australia

 
 

Darwin business fined $175,000 for exploiting and underpaying foreign workers on 457 visas

A Darwin-based company has been fined over $175,000 for breaching sponsorship obligations under the subclass 457 visa programme, Assistant Minister for Immigration and Border Protection, Senator the Hon Michaelia Cash said today.

Choong Enterprises Pty Ltd, the Director of Choong Enterprises, and one other person were found to have breached their sponsor obligations under the Migration Act.

"This is the first civil penalty application my Department has undertaken in the Federal Court, and is the largest civil penalty any court has imposed for a breach of sponsor obligations," Minister Cash said.

"This action highlights the fact that the Government takes any alleged breach of 457 visa sponsorship very seriously and will pursue court action if appropriate."

The court found that Choong Enterprises had paid 457 visa holders as little as $12 an hour, failed to abide by its record keeping obligations, had knowingly produced false pay records and had illegally recovered the costs of migration agent fees from four visa holders, among other contraventions. It found that that the director of Choong Enterprises, Ronald Choong, had aided and abetted these breaches.

"The stiff penalty this company has received should send a warning to other sponsors: if you fail to meet your requirements, my Department may impose administrative sanctions, issue an infringement notice, execute an enforceable undertaking, or apply to the federal court for a civil penalty order,” Minister Cash said.

"The Department is constantly monitoring 457 sponsors to ensure they are operating appropriately. The overwhelming majority of businesses act in good faith and therefore have nothing to fear, but we want to send a strong message that if you breach your obligations, you can expect to face the consequences."

"Under a Coalition Government, Australians can be confident that the Department of Immigration and Border Protection is adequately resourced to ensure that those sponsors and visa holders found to be breaching their obligations are targeted and appropriate action is taken against them."

In imposing the penalty, the court took into account that Choong Enterprises Pty Ltd no longer has any 457 visa holders in its employ and admitted its wrongdoing to the court.

 
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Business Succession Planning

business succession planning

Nobody likes to think about it, but it's inevitable that one day you'll leave your business. Whether you decide to sell up, retire or leave due to health reasons, it's important that you plan for that day. A succession (or exit) plan outlines who will take over your business (or your share of the business) when you leave.

A good succession plan will help your business transition smoothly to the new owner. By planning your exit early, you can maximise the value of your business and help it to meet future needs.

Make sure your succession plan is achievable. Set a realistic timetable and measurable milestones along the way and stick to them.

One of the key legal documents required in any business succession plan is a carefully drafted Shareholders Agreement (sometimes referred to as a Buy/Sell Agreement).

Shareholders Agreement / Buy-Sell Agreement

A buy-sell agreement is an arrangement or contract between business partners and/or shareholders, unitholders or trust beneficiaries in a business that specifies:

  • how the key decision making functions of the business are to be made;
  • how certain ownership or voting rights are to be exercised; and
  • how ownership interests are to be transferred between the various owners of the business.
  • Buy-sell agreements are also about planning for the possibility of conflicts or difference of opinion between business partners and to enable stakeholders to agree in advance how these situations will be handled. They are complex documents requiring specialist legal and tax advice.

In general, the agreements focus on shareholders’ rights to transfer shares (or ownership interests) in the business to other people, circumstances that activate those rights, and transfer mechanism procedures.

Specifically, these agreements entitle shareholders to buy each other out under certain conditions and at a certain price, and to have first right of refusal when someone decides to dispose of shares.

Buy-sell agreements can restrict who may become a new owner or part owner of the business and may also specify that interests are not to be sold to anyone outside the identified group (spouse, child, grandchild, or trusts established for them or the company itself) without prior approval of the remaining shareholders. Those persons acquiring shares (or other beneficial interests) are also required to agree to be bound by the shareholders agreement going forward.

Distinctions can also be made between mandatory and voluntary buy-sell shareholder (beneficiaries) agreements.

Mandatory agreements oblige shareholders (or their estates) to sell shares in a business to the remaining shareholders or stakeholders upon the occurrence of a triggering event such as death, disability, resignation, retirement, attainment of a certain age or divorce. This obligation is drafted in the form of enforceable put and call options vested in the relevant parties.

In contrast, voluntary buy-sell agreements restrict persons to whom shares can be sold, willed or gifted. This is usually drafted in the form of 'pre-emptive rights', whereby the outgoing business partner or shareholder must first offer to sell their shares to the remaining partners/shareholders prior to being able to sell their interest to a third party.

Buy-sell agreements also provide a method for pricing shares to be sold (usually arrived at in consultation with a valuation from an independent expert).

The means of payment of shares of the outgoing partner can also be specified, which may in some instances, be funded by life, disability and/or key man insurance, covering either part or all of the purchase price.

 
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Australia to strip citizenship of Australian-born jihadis with immigrant parents

strip australian citizenship

Australia plans to strip citizenship from Australian-born children of immigrants who become fighters for the militant group Islamic State in Iraq and Syria (ISIS) in its crackdown on homegrown jihadis, a minister said on Thursday.

The government wants to change the Citizenship Act to make fighting for ISIS a reason for losing citizenship, Immigration Minister Peter Dutton said.

The government also wants to adopt the British legal model by revoking the citizenship of extremists who are Australian-born children of immigrants or an immigrant, forcing them to take up citizenship in the birth country of their parents, or parent, Dutton said.

It also would apply to dual citizens. "The principle for us, which is very important, is that we don't render people stateless," Dutton told Sydney Radio 2GB.

Australia can currently only revoke citizenship in cases of fraud in the citizenship application or where an Australian citizen joins the armed forces of another country to fight Australia.

Because the Islamic State movement is not recognized as a state, membership is not a ground for losing Australian citizenship, Dutton said

"I can hardly walk down the street without people saying: 'Why do you let these people back into our country? They come back more radicalized,"' Dutton said.

"They are a huge threat to Australian citizens. We should act and that's what the government is doing," he added.

 

This country has the best minimum wage in the world

best minimum wage in Australia

Low wage workers in Australia have it better than most.

The country has the most generous national minimum wage in the developed world, according to a report from the Organisation for Economic Co-operation and Development.

The report ranked 27 countries that have laws setting a nationwide minimum rate of pay.

Australia's minimum wage workers -- aged 21 and over -- make 15.96 Australian dollars per hour. After tax and other deductions, that's equivalent to $9.54, once the difference in the cost of living is taken into account.

"They have a high minimum wage. And interestingly they have a low tax burden," said Herwig Immervoll, the author of the OECD report. "[Australians] recognize that supporting low wage earners through the tax system is important."

Other countries have set higher hourly rates but they also tax minimum wage workers more, leaving them with less in their pockets.

The U.S. ranked 11th on the list, with a federal minimum wage of $7.25 per hour. That leaves workers with take-home pay of $6.26 per hour.

The OECD report shows that a single Australian minimum wage worker with two kids could work just six hours per week to lift themselves above the poverty line, because they would also receive state benefits.

In the U.S., the same worker would have to clock in 50 hours per week to escape poverty. In the Czech Republic, it would take 79 hours of work per week.

Eight countries, including Finland, Sweden and Switzerland, were not included in the report because their governments do not set national rules on minimum pay. Many of them have strong labor unions and established arrangements for collective bargaining, which means governments don't have to step in.

 
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Visa and Citizenship Costs to Rise in Australia

increase in visa fees

Charges for a range of Australian visas are to be increased by 01 July under new proposals set out by the government in its annual Budget.

Officials said the visa applications would affect only those living offshore and wanting to travel to Australia and that the moved brings fees in line with visa costs incurred in Australia, with the exception of child visas

In the case of child visas, domestic charges will be reduced to match existing overseas charges.

Citizenship costs will also change, with the government seeking to recover full costs so that those benefiting pay rather than the general public with the new regime coming into place on 01 January next year.

The details of the cost changes have not yet been made public but the Budget statement said that the aim is to raise $103 million in the first year, rising to $113 million by 2018/2019.

Also, from July this year, fly-in, fly-out workers will have to meet stricter eligibility requirements for tax breaks associated with living in isolated areas. To be eligible for the offset, a taxpayer has to live or work in one of these zones for at least 183 days a year. But the government estimates 20% of those who claim the benefit do not live in a zone for this length of time.

Australians living overseas will be targeted for the first time. From January 2016 overseas Australians with university HELP debts will be required to start paying them back once they earn more than $53,345.

Graduates going overseas for more than six months will be required to register with the Tax Office, while those already overseas will have until July 2017 to register and start repaying their debts.

Foreigners buying property will also face higher taxes. Application fees will be introduced on all real estate, business and agricultural foreign investment proposals from December this year.

They will be charged an application fee of between $5,000 and $10,000, depending on the value of the property and stricter penalties will also apply to foreign investors who break the rules.

 
 

We hope that you have found the information in this issue of our newsletter to be enriching and useful. Stay tuned for our next publication and if you would like to talk to us directly, please do not hesitate to email service@noborders-group.com. In addition, if you would like your contact details updated or removed from this distribution list or you know someone who would like to be added, please email us on the same address.

"The only limits to being the person you truly want to be are your own self-limiting beliefs and thoughts. In every moment, you have the power to choose your life"

 
 

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