Zhao (Migration)

Zhao (Migration) [2021] AATA 3133 (20 July 2021)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANTS:  Ms Jing Zhao
Mr Zekang Wang

Ms Wang Chuchu
CASE NUMBER:  1831152
HOME AFFAIRS REFERENCE(S): BCC2017/1558169 BCC2017/1566926 BCC2017/1566932 BCC2017/1566936
MEMBER:Susan Hoffman
DATE:20 July 2021
PLACE OF DECISION:  Perth
DECISION:The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the first named applicant meets the following criteria for a Subclass 892 (State/Territory Sponsored Business Owner) visa:
·cl 892.213 of Schedule 2 to the Regulations.

Statement made on 20 July 2021 at 8:08am
CATCHWORDS
MIGRATION – Migration – Business Skills (Residence) (Class DF) visa – Subclass 892 – net assets requirement met – threshold amount AUD200,000 has been exceeded – decision under review remitted
LEGISLATION
Migration Act 1958, s 65, 134, 338, 347
Migration Regulations 1994, r 1.11, Schedule 2, cls 892.213, 892.411
STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Home Affairs on 23 October 2018 to refuse to grant the visa applicants Business Skills (Residence) (Class DF) visas under s 65 of the Migration Act 1958 (Cth) (the Act).
Ms Jing Zhao, Mr Hengbin Wang, Mr Zekang Wang and Ms Wang Chuchu applied for the visas on 28 April 2017. At the time of application, Class DF contained four subclasses: Subclass 890 (Business Owner), Subclass 891 (Investor), Subclass 892 (State/Territory Business Owner) and Subclass 893 (State/Territory Sponsored Investor). The applicants in this case are seeking to satisfy the criteria for the grant of Subclass 892 (State/Territory Business Owner) visas, as set out in Part 892 of Schedule 2 to the Migration Regulations 1994 (Cth) (the Regulations). At least one member of the family unit must satisfy the primary criteria set out in Subdivision 892.2. The others need only to satisfy the secondary criteria set out in Subdivision 892.3.
The delegate in this case refused to grant the visas on the basis that the first-named visa applicant did not satisfy the requirements of cl 892.213 of Schedule 2 to the Regulations because the turnover of the main business was not at least AUD200,000 in the 12 months immediately before the application was made.
When notifying the applicants of the decision, the delegate recorded that one of the secondary applicants, Mr Hengbin Wang, did not have review rights in relation to the departmental decision.
The applicants were represented in relation to the review by Mr Wei Li of iSmart Migration Services.
The application for review lodged with the Tribunal included Mr Hengbin Wang as a secondary applicant. The Tribunal drew the applicants’ attention to the issue regarding Mr Hengbin Wang’s right to a review. Mr Hengbin Wang subsequently withdrew his application for review. This is discussed below under the heading ‘Jurisdictional Issue and Withdrawal of Application for Review’.
The Tribunal had invited the applicants to provide further information, and written submissions were received on 12 and 26 June 2021. The Tribunal determined that it could make a favourable decision on the papers and no hearing was held.
For the following reasons, the Tribunal has decided that, in relation to the three applicants who have review rights, the matter should be remitted for reconsideration.
JURISDICTIONAL ISSUE AND WITHDRAWAL OF APPLICATION FOR REVIEW
Subsection 338(7A) of the Act sets out that a decision to refuse to grant a non-citizen a permanent visa is reviewable if the non-citizen applied for the visa when they were outside the migration zone and the visa is a visa that could be granted while the non-citizen is either in or outside the migration zone.
Cl. 892.411 of the Migration Regulations 1994 states that the applicant may be in or outside Australia when the Subclass 892 visa is granted, but not in immigration clearance. That suggests that a decision to refuse to grant the visa would be reviewable.
However, subsection 347(3A) qualifies s. 338(7A) in that an application for review may only be made by a non-citizen who:
(a) was physically present in the migration zone at the time when the decision was made; and
(b) is physically present in the migration zone when the application for review is made.
The departmental decision was made on 23 October 2018 and the application for review by the Administrative Appeals Tribunal was lodged on 24 October 2018.
According to departmental records, Mr Hengbin Wang left Australia on 17 May 2018 and arrived back in Australia on 26 October 2018. Therefore, he was outside the migration zone on both 23 and 24 October 2018.
As the delegate’s decision was made when the applicant was offshore and the application for review was lodged when the applicant was offshore, the Tribunal determines that it does not have jurisdiction in relation to Mr Hengbin Wang’s application for review.
The Tribunal notes that the decision notification letter, dated 23 October 2018, stated the following:
Refused Applicant
I wish to advise you that the application for this visa has been refused on 23 October 2018 for the following applicant:

Client Name

Hengbin WANG

Date of Birth

06 May 1969

The applicant did not satisfy the provisions of the Migration Regulations 1994.
The attached decision record provides detailed information about this decision as it applies to this applicant.
Review rights
There is no right of merits review for this decision.

On 1 July 2021, the Tribunal wrote to the applicants, inviting comment on the validity of the application for review in relation to Mr Hengbin Wang.
A response was received on 15 July 2021, advising that Mr Hengbin Wang wished to withdraw his application for review. The Tribunal accepted this and determined that Mr Hengbin Wang was no longer an applicant for the purposes of this review.
The Tribunal will now consider the claims and evidence as they relate to the other applicants. The primary applicant is henceforth the applicant.
CONSIDERATION OF CLAIMS AND EVIDENCE
The issue in this case is whether or not the turnover of the main business was at least AUD200,000 in the 12 months before the visa applications were made.
Clause 892.213 is as follows:
892.213
(1) The applicant meets the requirements of subclause (2) or (3).
(2) An applicant meets the requirements of this subclause if, in the 12 months immediately before the application is made, the applicant’s main business in Australia, or main businesses in Australia together, had an annual turnover of at least AUD200 000.
(3) An applicant meets the requirements of this subclause if:
(a) the applicant meets at least 2 of the requirements set out in paragraphs 892.212(a), (b) and (c);
and
(b) the applicant resides in, and operates the applicant’s main business or businesses in Australia in, an area specified in an instrument in writing made by the Minister for this paragraph; and
(c) the appropriate regional authority has determined that there are exceptional circumstances for this subclause.
Main business
The meaning of “main business” is set out in r.1.11 of the Regulations. The first of the criteria under r.1.11(1)(a) requires the applicant to have an ownership interest. The definition of “ownership interest” in relation to a business is defined in s.134(10) of the Act. It means, amongst other things, “a shareholder in the company that carries on the business”.
The applicant nominated one main business which was that operated by Zhiku Pty Ltd (Zhiku). According to a submission dated 12 June 2021, it operates a wine export business. The company was registered on 18 November 2014 and its Australian Business Number was activated from 12 February 2015. The primary applicant (henceforth the applicant) continues to own 100% of the shares in Zhiku.
As the applicant has held 100% of the shares in the company since its inception, the first of the criteria, set out in r.1.11(1)(a), is met.
Secondly, the applicant must maintain or have maintained direct and continuous involvement in the management of the business from day-to-day and in making decisions affecting the overall direction and performance of the business.
On or around 21 April 2017, the applicant provided a personal statement to the Department, which gave some general background about her and her family, and starting the business in Australia. She wrote that she and her husband had conducted business together in China for more than ten years, and that experience gave her confidence to start and operate a business in Australia. Before leaving China, she conducted market research in her home town of Yangzhou City and was sure that she could attract ongoing customers who would be interested in buying Australian produce with guaranteed quality and taste.
The applicant wrote that once in Australia, she visited many potential suppliers – wine suppliers, vineyards, wool quilt factories, health product suppliers, and honey and olive suppliers.
The applicant used the knowledge she acquired to promote the products to potential customers in China, through her established networks from her past business dealings in China.
The applicant wrote that she secured her first wine order, which was to export Penfolds wine. Having done that, she was familiar with how to export from Australia to China, and over the next two years, she tried exporting different products and wines at different prices. She eventually decided on wool quilts and low-priced wines as her main products.
The applicant wrote about the challenges she faced, operating a new business in an environment that was new to her. She kept a detailed eye on every aspect of the business, from enquiries, getting quotes, booking shipments and helping Chinese customers with their customs clearance.
The applicant wrote that as more people started to trade between China and Australia, and the market became more competitive, she spent time in China promoting her products there. When the children were on holiday, she went to China for a business trip, participating in trade fairs and at exhibitions.
The applicant wrote about how she has, over time, established good working relationships with Australian suppliers and logistics companies. She hoped to have her own brand at some point in the future. The applicant provided photos of her visiting suppliers and clients in Australia and China.
The applicant was the sole director and shareholder of the company. Her signature appears on documents such the financial statements, in her capacity as director. Her name is given as the contact person on, for example, suppliers’ invoices and sales agreements.
Based on the evidence before it, the Tribunal accepts that the applicant maintains or has maintained direct and continuous involvement in the management of the business on a day-to-day basis and in making decisions affecting the overall direction and performance of the business. Therefore, the second criterion, as set out in r.1.11(1)(b), is met.
Thirdly, the value of the applicant's ownership interest must meet certain thresholds, depending on factors including turnover. In this case, as the applicant has been the sole shareholder since 18 November 2014, the third criterion as per r.1.11(1)(c) is clearly met, regardless of the turnover.
Finally, the business must be a qualifying business, which is defined at 1.03 of the Regulations to mean “an enterprise that is operated for the purpose of making profit through the provision of goods and/or 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.”
The applicant’s accountant is Mr Guang Zeng of PG Accountants Pty Ltd. In a letter dated 7 June 2021 to the Tribunal, he listed the sales made between 1 January 2016 and 31 March 2017. A further submission was made on 26 June 2021, which provided details of a sale made on 18 April 2017. All the sales were exports sales, as follows:
Date              Client  Amount AUD
4 Mar 2016      Yangzhou Hengkang Technology Co. Ltd.  20,736
8 Mar 2016      Yangzhou Laotuzao Food & Beverage Management Co Ltd.      42,780
29 Apr 2016    Yangzhou Hengkang Technology Co. Ltd.  21,504
18 May 2016     Yangzhou Aoerte Trading Co. Ltd.  25,805
11 Jul 2016     Yangzhou Weiguan Trading Co. Ltd.  24,180
16 Aug 2016    Suzhou Hengkangvevo Communication Co. Ltd.  24,025
1 Oct 2016      Yangzhou Weiguan Trading Co. Ltd.   (155)
16 Oct 2016    Yangzhou Wanjiang Property Management Co. Ltd.                18,720
15 Nov 2016    Yangzhou Laotuzao Food & Beverage Management Co Ltd.     42,780
27 Feb 2017    Yangzhou Weiguan Trading Co. Ltd.  24,000
18 Apr 2017    Yangzhou Weiguan Trading Co. Ltd.  24,000
The documents provided to the Department and the Tribunal include copies of invoices, sales contracts and/or shipping documents to verify these sales were made as claimed.
There were, therefore, eleven export sales to seven customers. The Tribunal is satisfied, given the nature of the business, and the account of how the applicant found customers as set out above, that the business provides goods and services to the general public and is not operated for the purpose of speculative or passive investment. Therefore, the Tribunal finds that the business is a qualifying business, thereby satisfying the criterion in r.1.11(1)(d).
As all four criteria under r.1.11(1) are met, the Tribunal finds that the business operated by Zhiku is a main business.
Turnover in the 12 months before the visa application was made
As the visa applications were lodged on 28 April 2017, the relevant 12-month period ran from 28 April 2016 to 27 April 2017 (see cl. 892.213(2)). The turnover needs to be more than AUD200,000 during that period for the criteria to be met.
Departmental policy states that the term “immediately before the application is made” means the three-month period before a visa application is made. This is in relation to the provision of financial statements to verify business turnover and other financial information.
As the applicant provided the Department with financial statements for the year ended 28 February 2017 - which included comparative figures for the previous year - the Tribunal considers the financial statements provided were done so in line with the policy.
However, it is reasonable for the Department to request Business Activity Statement (BAS) returns, as well as the financial statements, to be satisfied that the turnover threshold was met during the 12 months immediately before the visa application was made; in this case, from 28 April 2016 to 27 April 2017.
As already recorded, details of sales invoices were submitted to the Tribunal. Invoices raised between 28 April 2016 and 27 April 2017 were as follows:
Date              Client  Amount AUD
29 Apr 2016    Yangzhou Hengkang Technology Co. Ltd.  21,504
18 May 2016     Yangzhou Aoerte Trading Co. Ltd.  25,805
11 Jul 2016     Yangzhou Weiguan Trading Co. Ltd.  24,180
16 Aug 2016    Suzhou Hengkangvevo Communication Co. Ltd.  24,025
1 Oct 2016      Yangzhou Weiguan Trading Co. Ltd.   (155)
16 Oct 2016    Yangzhou Wanjiang Property Management Co. Ltd.                18,720
15 Nov 2016    Yangzhou Laotuzao Food & Beverage Management Co Ltd.     42,780
27 Feb 2017    Yangzhou Weiguan Trading Co. Ltd.  24,000
18 Apr 2017    Yangzhou Weiguan Trading Co. Ltd.  24,000
204,589
The value of the total sales during the relevant 12-month period was AUD204,589. The Tribunal is satisfied therefore that the threshold amount AUD200,000 has been exceeded. That being the case, the Tribunal is satisfied that cl.892.213(2) is met. Accordingly, cl.892.213 is met.
Given the findings above, the appropriate course is to remit the matter to the Minister to consider the remaining criteria for the visa in relation to the primary applicant, Ms Jing Zhao, and the two secondary applicants, Mr Zekang Wang and Ms Wang Chuchu.
DECISION
The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the first named applicant meets the following criteria for a Subclass 892 visa:
·cl 892.213 of Schedule 2 to the Regulations
Susan Hoffman
Member

ATTACHMENT - LEGISLATION
Migration Regulations 1994
1.03Definitions
In these Regulations, unless the contrary intention appears:
…
ownership interest has the meaning given to it in subsection 134(10) of the Act.
…
qualifying business means an enterprise that:
(a) 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
(b) is not operated primarily or substantially for the purpose of speculative or passive investment.
…
1.11Main business
(1)For the purposes of these Regulations and subject to subregulation (2), a business is a main business in relation to an applicant for a visa if:
(a)the applicant has, or has had, an ownership interest in the business; and
(b)the applicant maintains, or has 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; and
(c)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 is or was:
(i)if the business is operated by a publicly listed company—at least 10% of the total value of the business; or
(ii)if:
(A)the business is not operated by a publicly listed company; and
(B)the annual turnover of the business is at least AUD400 000;
at least 30% of the total value of the business; or
(iii)if:
(A)the business is not operated by a publicly listed company; and
(B)the annual turnover of the business is less than AUD400 000;
at least 51% of the total value of the business; and
(d)the business is a qualifying business.
(2)If an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses.
1.11A Ownership for the purposes of certain Parts of Schedule 2
(1)Subject to subregulation (4), for Parts 132, 188, 888, 890, 891, 892 and 893 of Schedule 2, ownership by an applicant, or the applicant’s spouse or de facto partner, of an asset, an eligible investment or an ownership interest, includes beneficial ownership only if the beneficial ownership is evidenced in accordance with subregulation (2).
(2)To evidence beneficial ownership of an asset, eligible investment or ownership interest, the applicant must show to the Minister:
(a)a trust instrument; or
(b)a contract; or
(c)any other document capable of being used to enforce the rights of the applicant, or the applicant’s spouse or de facto partner, as the case requires, in relation to the asset, eligible investment or ownership interest;
stamped or registered by an appropriate authority under the law of the jurisdiction where the asset, eligible investment or ownership interest is located.
(3)A document shown under subregulation (2) does not evidence beneficial ownership, for subregulation (1), for any period earlier than the date of registration or stamping by the appropriate authority.
(4)Beneficial ownership is not required to be evidenced in accordance with subregulation (2) if the person who has legal ownership of the asset, eligible investment or ownership interest in relation to which the applicant, or the applicant’s spouse or de facto partner, has beneficial ownership:
(a)is a dependent child of the applicant; and
(b)made a combined application with the applicant; and
(c)has not reached the age at which, in the jurisdiction where the asset, eligible investment or ownership interest is located, he or she can claim the benefits of ownership of the asset, eligible investment or ownership interest.
Migration Act 1958
134Cancellation of business visas
….
(10)In this section:
….
ownership interest, in relation to a business, means an interest in the business as:
(a) a shareholder in a company that carries on the business; or
(b) a partner in a partnership that carries on the business; or
(c) the sole proprietor of the business;
including such an interest held indirectly through one or more interposed companies, partnerships or trusts.

[2021] AATA 3133

20 July 2021

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