Latif (Migration)

[2024] AATA 689

Latif (Migration) [2024] AATA 689 (26 March 2024)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mrs Azam Latif
Mr Masoud Hodaie
Mr Seyedalireza Hodaie
Miss Masoumehsadat Hodaie

REPRESENTATIVE:  Mr Daniel Eskandari (MARN: 0100438)

CASE NUMBER:  2111035

HOME AFFAIRS REFERENCE(S):          BCC2020/1351503

MEMBER:Mary Sheargold

DATE:26 March 2024

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal remits the applications for Business Skills (Provisional) (Class EB) visas for reconsideration, with the direction that the first named visa applicant meets the following criteria for a Subclass 188 (Business Innovation and Investment (Provisional)) visa:

·cl 188.231 of Schedule 2 to the Regulations;

·cl 188.232 of Schedule 2 to the Regulations; and

·cl 188.233 of Schedule 2 to the Regulations.

Statement made on 26 March 2024 at 1:01pm

CATCHWORDS
MIGRATION – Business Skills (Provisional) (Class EB) visa – Subclass 188 (Business Innovation and Investment (Provisional)) – business innovation extension stream – need to reside in Australia to operate main business – wife’s new business stream under existing company structure established during and after COVID pandemic – studies and long-term lease of premises – husband continuing original business and supporting wife’s business – ownership interest – single corporate entity – business actively operating – low turnover while training staff and growing client base – repetitive, continuous and permanent activities – genuine realistic commitment – decision under review remitted

LEGISLATION
Migration Act 1958 (Cth), s 65
Migration Regulations 1994 (Cth), Schedule 2, cls 188.231, 188.232(1), (2), 188.233

CASES
Ibrahim v MIAC [2009] FCA 1328
Shahpari v MIBP [2016] FCCA 513
Yang v MIBP [2014] FCCA 1576

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Home Affairs on 5 August 2021 to refuse to grant the applicants Business Skills (Provisional) (Class EB) visas under s 65 of the Migration Act 1958 (Cth) (the Act).

2. The applicants applied for the visas on 11 April 2020. Class EB contains Subclass 188 (Business Innovation and Investment (Provisional)). The criteria for the grant of a Subclass 188 (Business Innovation and Investment (Provisional)) visa are set out in Part 188 of Schedule 2 to the Migration Regulations 1994 (Cth) (the Regulations). The primary criteria must be satisfied by at least one applicant. Other members of the family unit who are applicants for the visa need satisfy only the secondary criteria. The primary criteria include common criteria, and criteria set out in streams. In this case, the first named visa applicant (‘the applicant’) applied for the visa in the Business Innovation Extension stream.

3. The delegate in this case refused to grant the visas on the basis that the first named applicant did not satisfy the requirements of cl 188.231 of Schedule 2 to the Regulations because she did not demonstrate that there was a need for her to be resident in Australia to operate the main business.

4. The first and second named applicants appeared before the Tribunal on 21 March 2024 to give evidence and present arguments. The Tribunal hearing was conducted with the assistance of an interpreter in the Persian and English languages.

5. For the following reasons, the Tribunal has concluded that the matter should be remitted for reconsideration.

   CONSIDERATION OF CLAIMS AND EVIDENCE

6. The applicant is seeking to satisfy the primary criteria for a Subclass 188 visa in the Business Innovation Extension stream which include the criteria in Subdivisions 188.21 and 188.23 of Schedule 2 to the Regulations. The issue in the present case is whether the applicant meets cl 188.231, cl 188.232, and cl 188.233 of Schedule 2 to the Regulations.

   Need to be resident in Australia to operate main business – cl 188.231

7. Clause 188.231 requires the applicant to demonstrate that there is a need for that applicant to be resident in Australia to operate the main business.  This is a time of decision criterion.

8. At the hearing, the applicants explained that when this application was considered by the delegate, Mrs Latif and her husband operated a single corporate entity, Homaz Pty Ltd, as an umbrella company for their Australian business ventures, and they were establishing a real estate consultancy business in Australia to supplement their existing real estate businesses operating in Tehran.  That is, their main objective was to grow an Iranian- Australian client base and to assist those clients in acquiring or disposing of properties in Iran, especially in circumstances where Iranian Australians had inherited property in Iran they did not wish to retain, as well as to provide assistance for short term and medium term rental assistance for Australians who were travelling to Iran for business or extended personal trips.

9. Mrs Latif explained that the onset of the Covid-19 pandemic decimated the capacity for that business to succeed; nonetheless she remained onshore in Australia to continue her attempts to grow the business while also seeking to establish an alternate business stream under the existing company structure that was set up when the family was granted their first Subclass 188 visas in 2016.

10. Mrs Latif has provided a body of documentary evidence demonstrating that she has branched out away from real estate and into the health and beauty sector, where she has established a successful skin and beauty clinic in Bulleen, Melbourne.  The Tribunal has reviewed her qualification certificates, customer reviews, staff reviews, Business Activity Statements and other documents verifying the new business stream established by the family.  Mrs Latif told the Tribunal that she undertook the studies necessary for her to be able to perform certain beauty treatments online during the extensive lockdowns in Melbourne over 2020 and 2021, and she has provided a copy of a 9-year lease for the business premises where her clinic is currently operating.  Her husband, Mr Hodaie, gave evidence that he continues to manage the real estate business, with varying success, as well as supporting the technical side of Mrs Latif’s newer business.

11. Having reviewed all the new evidence available at review, the Tribunal is satisfied that Mrs Latif is required to be resident in Australia to conduct her skin and beauty business.  Therefore, the requirement of cl 188.231 is met.

    Ownership interest in main business – cl 188.232

12. Clause 188.232(1) requires that for at least the 2 years immediately before the application was made, the applicant had an ownership interest in one or more main businesses that were actively operating in Australia.

13. Alternatively, for applications made on or after 19 September 2020, if, during a concession period, the applicant holds or held a Subclass 188 visa in the Business Innovation stream or the Business Innovation Extension stream and the Business Innovation stream visa the applicant holds or held was granted before 1 July 2019 – cl 188.232(1) is satisfied if the applicant had an ownership interest in one or more main businesses that were actively operating in Australia for a cumulative period of at least 2 years while the applicant was the holder of the visa.

14. ‘Concession period’ is defined in reg 1.15N as the period commencing on 1 February 2020 and ending on a day specified by the Minister in an instrument (‘initial concession period’), as well as a period determined by the Minister under an instrument for the purposes of a specified provision of the Regulations in which the expression ‘concession period’ is used, beginning not before the initial concession period ends. No more than two businesses can be nominated for this purpose: reg 1.11(2).  In this case, the application was made before 19 September 2020.

15. The applicant must continue to have the ownership interest mentioned in cl 188.232(1) at the time of this decision: cl 188.232(2). No more than two businesses can be nominated for this purpose (reg 1.11(2)) and only one or both of the businesses relied on to meet the time of application criterion can be relied on to meet the time of decision criterion: Yang v Minister for Immigration and Border Protection [2014] FCCA 1576.

16. The business relied on by the applicant to satisfy these requirements is operated under the umbrella of a single corporate entity, Homaz Pty Ltd. Accordingly, the Tribunal must consider the nature of the applicant’s interest in this business, whether the business was actively operating and whether it met the definition of ‘main business’ for at least the 2 years immediately prior to the date of application.

    Does the applicant have an ownership interest in each business relied on at the relevant time?

17. An ‘ownership interest’, in relation to a business, means an interest in the business as:

    ·a shareholder in a company that carries on the business, or

    ·a partner in a partnership that carries on the business, or

    ·the sole proprietor of the business;

    including such an interest held indirectly through one or more interposed companies, partnerships or trusts (s 134(10) of the Act and reg 1.03 of the Regulations). Ownership for this purpose includes beneficial ownership if it is evidenced in accordance with the terms of reg 1.11A of the Regulations.

18. In order to meet cl 188.232(1) the Tribunal must be satisfied that the applicant had an ownership interest in the relevant business or businesses for at least the 2 years immediately before the application was made. The application was made on 11 April 2020, and Mrs Latif relies on her 51.66% shareholding in the corporate entity, Homaz Pty Ltd, that facilitates the operation of the family’s Australian businesses.  The Tribunal is satisfied that she has held a 51.66% shareholding since at least 1 July 2017.  That shareholding is evidenced by reference to ASIC records the applicants included with their application.  Mr Hodaie is the only other shareholder and director,

19. Accordingly, the Tribunal is satisfied that the applicant had an ownership interest in the nominated business at the relevant time.

    Was each business relied on actively operating at the relevant time?

20. In order to meet cl 188.232(1) the Tribunal must be satisfied that the relevant business or businesses were actively operating for at least the 2 years immediately prior to the date of application.

21. The term ‘actively operating’ is not defined in the Act or Regulations. In considering whether this requirement is met, the Tribunal may consider whether the business exhibited activity of a ‘repetitive, continuous and permanent character’ at the relevant times, in which the business actively sought to generate business, in fact generated trade and custom and derived some financial gain for its activities in the relevant period: Shahpari v Minister for Immigration and Border Protection [2016] FCCA 513 at [71].

22. Mrs Latif and Mr Hodaie gave detailed evidence during the hearing outlining the repetitive, continuous and permanent character of their Australian business operation, noting their core objective in the 2 years from 11 April 2018 to 11 April 2020 was to ensure sufficient infrastructure on the ground in Tehran to support the Australian customers that they anticipated would come through their business operated by Homaz Pty Ltd.  The Tribunal has considered the very low turnovers for the business recorded in the application form, showing $14,575 of income in the financial year ending on 30 June 2019, and $5,568 for the financial year ending on 30 June 2018.

23. However, the Tribunal is prepared to give the applicants the benefit of the doubt and find that the consistent efforts put in to train their Iranian-based staff in aspects of Australian commercial enterprise, as well as to grow a client base of Iranian property owners from whom properties could be leased or sold to Australian clients, were to facilitate the continued capacity to grow and develop the business they operated by Homaz Pty Ltd.  Even though the applicants were not especially successful in their early days of operation, they did manage to garner a small amount of business.  The Tribunal notes that although sales for Homaz Pty Ltd recorded were very small, those sales figures represent the commissions earned by the applicants for rental agreements they negotiated for their Australian customers.  In other words, with a commission of less than 5%, the applicants created more than 20 times the amount of income generation for the Iranian property holders they represented.

24. While it is clear that the business did not have huge success during the 2 years immediately before this application was lodged, it is also clear that the applicants had taken as many steps as possible to ensure the future success of the business and believe, by mid 2019, their operations were strong enough in Tehran to permit them to return to Melbourne where they have lived permanently since.  The applicants did not have isolated transactions within their business.  They slowly established a pattern of repetitive, continuous and permanent client relationships that began to be reflected in sales transactions.

25. Accordingly, the Tribunal is satisfied that the nominated business was actively operating at the relevant time.

    Does each business relied on satisfy the definition of ‘main business’ at the relevant time?

26. In order to satisfy the requirements of cl 188.232(1), the business or businesses relied on by the applicant must meet the definition of ‘main business’ for at least the 2 years immediately prior to the date of application. The term ‘main business’ is defined in reg 1.11 of the Regulations. There are four elements to the definition, each of which must be satisfied for a business to be a main business.

27. Firstly, the applicant must have or have had an ownership interest in the business. In considering this issue, the ownership interest does not need to be continuous or exist at a particular time: Ibrahim v Minister for Immigration and Citizenship [2009] FCA 1328 at [32], considering similarly worded criteria in cls 845.213 and 845.221. ‘Ownership interest’ is defined in s 134(10) of the Act: reg 1.03. If a beneficial interest is relied on for these purposes, certain evidentiary requirements must also be met: reg 1.11A.

28. Secondly, the applicant must maintain or have maintained direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business.

29. Thirdly, the value of the applicant’s ownership interest, or the total value of the ownership interests of the applicant and the applicant’s spouse or de facto partner, in the business must meet certain thresholds:

    ·if the business is operated by a publicly listed company, the value of the ownership interest must be at least 10% of the total value of the business;

    ·if the businesses is not operated by a publicly listed company and the annual turnover of the business is at least AUD400 000, the value of the ownership interest must be at least 30% of the total value of the business;

    ·if the business is not operated by a publicly listed company and the annual turnover of the business is less than AUD400 000, the value of the ownership interest must be at least 51% of the total value of the business.

30. Finally, the business must be a qualifying business. ‘Qualifying business’ is defined as an enterprise that is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public, and is not operated primarily or substantially for the purpose of speculative or passive investment: reg 1.03.

31. As set out above, the applicants have demonstrated that all their Australian business activities have been conducted through a single corporate vehicle, Homaz Pty Ltd.  The Tribunal is satisfied that the first named applicant is a director and the majority 51.66% shareholder in that company, with the balance of the shareholding held by her husband, Mr Hodaie.

32. The first named applicant has been directly and continuously involved in the management of the business ventures undertaken by Homaz Pty Ltd since at least September 2016.  The evidence before the Tribunal makes plain that the first named applicant’s personal skills were relied upon to establish each business venture and to make the relevant investments and sales.  The first named applicant’s evidence at the hearing is that she is closely involved in the management and decision making processes for her businesses, and she has maintained her position as majority shareholder of the company since its creation.

33. The businesses operated by Homaz Pty Ltd all squarely fit within the definition of ‘qualifying business’, being that they all provide or provided goods and services to the public.  None of the first named applicant’s business ventures has been speculative or passive investment.

34. Accordingly, the Tribunal is satisfied that the nominated business does meet the definition of main business at the relevant time.

35. Given the findings above, the Tribunal is satisfied that cl 188.232(1) is met.

    Continues to have the ownership interest in cl 188.232(1)

36. Clause 188.232(2) requires that the applicant continues to have the ownership interest mentioned in cl 188.232(1) at the time of this decision.

37. The evidence before the Tribunal confirms that Homaz Pty Ltd is still a registered entity and Mrs Latif’s evidence is that she continues to be the director and shareholder.  Therefore, the Tribunal is satisfied that Mrs Latif continues to have the ownership interest mentioned in cl.188.232(1), and so the requirement in cl.188.232(2) is met at the time of the Tribunal’s decision.

38. Given the findings above, the Tribunal is satisfied that cl 188.232(2) is met. As it has already found that cl 188.232(1) is met, it follows that cl 188.232 is met.

    Genuine realistic commitment – cl 188.233

39. Clause 188.233 requires that the applicant genuinely has a realistic commitment to:

    ·(a) maintain the ownership interest mentioned in cl 188.232(1); and

    ·(b) maintain a direct and continuous involvement in the management of the main business from day to day, and in the making of decisions that affect the overall direction and performance of the main business, in a manner that benefits the Australian economy.

40. At the hearing, both Mrs Latif and Mr Hodaie were keen to ensure the Tribunal understood their genuine and very realistic commitment to maintaining the ownership interest that Mrs Latif has established in the businesses operated by Homaz Pty Ltd.  Mr Hodaie indicated the signing of a 9 year lease for a shopfront at Bulleen Plaza was a clear indication of Mrs Latif’s genuine, realistic commitment to maintain a direct and continuous involvement managing her business from day to day.  She has established a strong client base, as well as a strong team of subcontractors who support the ongoing success of her skin and beauty business.  She also continues to work closely with Mr Hodaie to manage their real estate business for Iranian-Australian clients.  Both businesses are building up their revenue steadily as reflected in the recent BAS for Homaz Pty Ltd.

41. Considering all of the oral evidence at the hearing, supported by the documentary evidence provided including lease documents, BAS and reference letters from subcontractors and clients, the Tribunal is satisfied that Mrs Latif has a genuine, realistic commitment to the management and development of her Australian businesses in a manner that benefits the Australian economy.

42. For these reasons, the Tribunal is satisfied that cl 188.233 is met.

43. Given the above findings, the appropriate course is to remit the application for the visa to the Minister to consider the remaining criteria for a Subclass 188 (Business Innovation and Investment (Provisional)) visa, including in relation to the secondary applicants.

    DECISION

1. The Tribunal remits the applications for Business Skills (Provisional) (Class EB) visas for reconsideration, with the direction that the first named visa applicant meets the following criteria for a Subclass 188 (Business Innovation and Investment (Provisional)) visa:

   ·cl 188.231 of Schedule 2 to the Regulations;

   ·cl 188.232 of Schedule 2 to the Regulations; and

   ·cl 188.233 of Schedule 2 to the Regulations.

   Mary Sheargold
   Member