In today’s globalised world, Founders are regularly required to source talent to bring to Australia, and sometimes, even themselves. The most common visa for this situation is the Skills in Demand (Subclass 482) (SID) visa.
This guide covers how sponsorship works for new and early-stage businesses, the difference between overseas business sponsorship and standard business sponsorship, when self-sponsorship is realistic, what the Department of Home Affairs (Department) expects to see, and the ongoing obligations that come with being a sponsor.
How employer sponsorship works: three separate approvals
Employer sponsored SID visas generally have three stages, each assessed on its own criteria:
- Sponsorship: The business is approved as a standard business sponsor under section 140E of the Migration Act 1958 (Cth) (the Act). This approves the business itself, not a particular role or person.
- Nomination: The business nominates a specific position and a specific worker. The Minister approves nominations under section 140GB of the Act,, and the criteria for a SID nomination are in regulation 2.72 of the Migration Regulations 1994 (*Cth) (the Regulations).
- Visa application The worker (and any family members) applies for the visa and must meet the visa criteria, including skills, English, health and character.
Importantly, the sponsorship application, nomination, and visa can be lodged together, which is important from a timing consideration. Our Standard Business Sponsorship page has a general overview of the process.
Overseas business sponsorship vs standard business sponsorship
For the purposes of this guide, we are focusing on the standard business sponsor (as opposed to a Labour Agreement). The criteria in regulation 2.59 requires the applicant to be “lawfully operating a business (whether in or outside Australia)”.
To obtain sponsorship, there are two practical pathways:
- Standard business sponsorship (SBS) for businesses lawfully operating in Australia; and
- Overseas business sponsorship (OBS) for businesses lawfully operating only outside Australia.
What is overseas business sponsorship?
OBS’ are designed for an established foreign company that wants to send staff to Australia before it has an Australian operation. Under regulation 2.59, a business operating only outside Australia can be approved where it seeks to sponsor a worker to:
- establish, or help establish, a business in Australia with connections to the overseas business (for example, a subsidiary or branch); or
- fulfil a contractual obligation the overseas business has in Australia.
Two features of OBS catch founders out:
- The worker must be employed by the overseas business: Under regulation 2.86, a sponsor operating only outside Australia can engage the sponsored worker only as its own employee. It cannot place the worker with an associated Australian entity, which an Australian-operating sponsor is permitted to do.
- OBS is a bridge, not a permanent arrangement: Once the Australian entity is registered and operating, the business is no longer “operating only outside Australia”. The Australian entity then needs its own standard business sponsorship to nominate further workers. If you have already incorporated a Pty Ltd and started trading in Australia, OBS is generally no longer the right pathway.
What is a standard business sponsorship?
SBS is for businesses lawfully operating in Australia, including newly registered companies. In addition to showing lawful and active operation, an Australian-operating applicant must:
- attest in writing to a strong record of, or demonstrated commitment to, employing local labour; and
- declare in writing that it will not engage in discriminatory recruitment practices.
The Department must also be satisfied that no adverse information is known about the business or its associated persons, or that it is reasonable to disregard it (regulation 2.59).
Approval is generally for five years.
Which pathway suits your start-up?
Your situation | Likely pathway |
Established overseas company, no Australian entity yet, sending a manager to set up the Australian branch | Overseas business sponsorship |
Overseas company with a contract to deliver in Australia, no local presence | Overseas business sponsorship |
Australian Pty Ltd already registered and trading, even if recently | Standard business sponsorship |
| Founder wants to incorporate an Australian company and be sponsored by it | Standard business sponsorship, with a high level of scrutiny (see below) |
Can I sponsor myself by setting up an Australian company?
Yes, it is legally possible. Nothing in the Act or the Regulations prohibits a company from nominating one of its own directors or shareholders. A company is a separate legal entity from its owners, so it can employ them.
However, a company sponsoring one of its own directors or shareholders is also the type of application the Department scrutinises most closely. The central question is whether the nominated position is genuine. For a SID nomination, regulation 2.72 requires the Minister to be satisfied that the position is genuine, and departmental policy directs officers to look for positions created mainly to secure a visa rather than to meet a real business need. When the person who controls the company is also the person being nominated, the Department will ask whether the business would exist, and the role would be needed, if there were no visa involved.
What a strong application for a shareholder or director looks like
- A real business in Australia: Signed customer or supplier contracts, a commercial lease, an Australian bank account with genuine transactions, and purchases of equipment or stock.
- Australian employees: Local staff on payroll, with superannuation paid. As a general rule of thumb, sponsors with around five Australian employees and turnover of more than $1 million make stronger claims. This is a practical observation from our files, not a legal test, and smaller businesses can succeed if they show a credible growth trajectory.
- Capacity to pay: Committed capital or revenue sufficient to pay the nominated salary for the full visa period, supported by a budget and, ideally, an accountant’s letter. A role that fits the business: A Chief Executive or Managing Director role makes sense for a company with operations to run. The same title in a company with no staff and no revenue is difficult to justify.
Alternatives worth considering
For many founders, self-sponsorship is not the best first step. Depending on your profile, consider:
- Sponsorship by an established Australian employer for an initial period while you build your own business on the side, within the limits of your visa.
- The National Innovation (subclass 858) visa, a permanent visa for people with an internationally recognised record of exceptional achievement, including entrepreneurs. It is competitive, but submitting an expression of interest costs nothing in government fees. See our guide to the National Innovation Visa.
- The General Skilled Migration program if you have a positive skills assessment and at least three years of relevant experience, sponsored by an operating Australian business.
What documents and information are required?
The Department’s decision is only as good as the evidence it receives. Start-ups should expect to provide more than an established business, because there is little to no trading history to rely on, or challenges with profitability.
For the sponsorship application
- Company registration records: ASIC extract, ACN and ABN, GST registration where relevant, and the share register.
- Any industry licences, and workers’ compensation insurance.
- A detailed business plan with financial projections, preferably prepared or reviewed by an accountant.
- Evidence of premises: a commercial lease, serviced office agreement or title.
- Business bank statements from account opening to the date of application.
- Evidence of trading: signed contracts, supplier agreements or memoranda of understanding, invoices and purchase orders.
- Evidence of investment: funding agreements, capital injections, and purchases of equipment or fit-out.
- Payroll and superannuation records for Australian staff, and an organisational chart showing where the nominated position sits.
- An accountant’s letter confirming that the business is genuinely and actively operating.
- For overseas business sponsorship: the overseas company’s registration and financial statements, and evidence of the proposed Australian establishment or the Australian contract.
For the nomination
- The position description, the occupation (ANZSCO or OSCA code), and why the business needs the role.
- The employment contract, showing the salary and terms.
- Evidence of the annual market salary rate, such as an enterprise agreement, comparable Australian employees, or salary survey data.
- Labour market testing evidence, unless an exemption applies. Our definitive guide to labour market testing covers the requirements in detail.
- Payment of the Skilling Australians Fund levy.
For the visa applicant
The worker’s documents (identity, qualifications, employment references, English test results, police certificates and health examinations) are set out in our Skills in Demand (subclass 482) visa checklist.
Costs, and which costs you must not pass on
Government fees and thresholds are indexed regularly. The figures below apply at the time of writing:
Item | Amount | Who pays |
Standard business sponsorship application | $420 | Sponsor only |
482 nomination application | $330 | Sponsor only |
Skilling Australians Fund levy, 482 (turnover under $10m) | $1,200 per year of the visa | Sponsor only |
Skilling Australians Fund levy, 482 (turnover $10m or more) | $1,800 per year of the visa | Sponsor only |
Skilling Australians Fund levy, 186 or 494 (turnover under $10m / $10m or more) | $3,000 / $5,000, one-off | Sponsor only |
| 482 visa application charge, main applicant (from 1 July 2026) | $4,015 | Sponsor or visa applicant |
Under regulation 2.87, a sponsor must not recover from, transfer to, or take any action that results in another person paying certain costs. These include the sponsorship and nomination fees, the Skilling Australians Fund levy, recruitment costs, and professional fees for the sponsorship and nomination. The obligation applies even if the worker agrees to pay. The visa application charge for the worker’s own visa can be paid by the worker.
The Act goes further. Section 245AR makes it an offence, and a civil penalty provision, for a person to ask for or receive a benefit in return for a sponsorship-related event, such as a nomination. Section 245AS applies the same prohibition to the person who offers or provides the benefit. This applies to individuals, not only to the sponsoring company.
A common start-up example: a worker “contributes” to the sponsorship costs by transferring money to a founder’s personal account, which the founder then uses to pay the migration agent. Even with no intention to exploit, the founder personally receiving that money can bring section 245AR into play, quite apart from the company’s breach of regulation 2.87. Every sponsorship cost should be paid by the business, from the business account.
Sponsorship obligations
Approval as a sponsor is not a one-off event. Section 140H of the Act requires sponsors to satisfy the obligations prescribed in Division 2.19 of the Regulations. For standard business sponsors the key obligations are listed below.
- Cooperate with inspectors (regulation 2.78): Do not hinder, obstruct or conceal information from departmental inspectors. This obligation continues for five years after you stop being a sponsor.
- Pay equivalent terms and conditions (regulation 2.79 for SID visas): Sponsored workers must receive terms and conditions no less favourable than an Australian worker in the same role, and at least the salary in the approved nomination.
- Pay return travel costs (regulation 2.80): On written request within 30 days.
- Pay costs to locate and remove an unlawful non-citizen (regulation 2.81): Where a former sponsored worker becomes unlawful.
- Keep records (regulation 2.82): Including the employment contract, payments and non-monetary benefits, duties performed and where they were performed, and notifications given to the Department.
- Provide records and information to the Minister (regulation 2.83): When requested.
- Notify the Department of certain events within 28 days (regulation 2.84): These include the sponsored worker’s employment ending or not starting, changes to the worker’s duties, a change of address, a new director or partner, the business ceasing to exist, and insolvency events.
- Ensure the worker works only in the nominated occupation (regulation 2.86): As an employee of the sponsor or, for an Australian-operating sponsor, an associated entity.
- Do not recover or transfer prohibited costs (regulation 2.87): as explained above.
Most obligations start when the sponsorship is approved or the visa is granted, and several continue after the worker leaves.
Compliance traps we see in start-ups
- The role changes as the business grows. A worker nominated as a developer programmer who moves into a DevOps engineering role is working outside the nominated occupation. A new nomination (and, where required, a new visa application) is needed before the change, not after.
- Hours or salary drop below the nomination. Reducing a worker to part-time hours, or paying less than the nominated salary during a cash-flow squeeze, breaches regulation 2.79. If an underpayment is identified, prompt backpay and a documented audit process are important mitigating steps.
- Missed notifications. Founders often forget that appointing a new director, moving premises or a worker’s resignation must be reported within 28 days.
- Informal cost sharing. As explained above, any arrangement under which the worker funds sponsorship or nomination costs creates risk for the company and for individuals.
Employers also have obligations beyond sponsorship. Section 245AC of the Act makes it a contravention to allow a lawful non-citizen to work in breach of a work-related visa condition. Since 1 July 2024, the Migration Amendment (Strengthening Employer Compliance) Act 2024 has added offences for coercing or exerting undue influence on a non-citizen to breach a work-related condition (section 245AAA), along with a framework for declaring employers “prohibited employers”.
What happens if obligations are breached?
If a sponsor fails to satisfy an obligation, the Minister may take one or more actions under section 140K of the Act, including:
- barring the sponsor from making future sponsorship applications or nominations;
- cancelling the sponsor’s approval;
- applying for a civil penalty order (section 140Q);
- issuing an infringement notice; or
- accepting an enforceable undertaking.
The circumstances in which a sponsor may be barred or cancelled are prescribed under section 140L. In deciding what action to take, the Department considers factors such as whether the breach was deliberate, whether it was a one-off, whether it was self-reported, and what steps the sponsor has taken to fix it. A start-up that identifies a problem early and corrects it is in a much better position than one where the Department discovers it through monitoring or a complaint. Our article on employer sanctions, penalties and enforcement covers this in more detail.
A practical roadmap for start-ups
- Decide the structure first: Work out whether OBS or SBS fits before you incorporate, because registering and operating an Australian entity changes which pathway is open to you.
- Build the evidence before you apply: Lease, bank account, contracts, local staff and a credible business plan. A sponsorship application supported only by a registration certificate and a plan is likely to attract a request for further information or a refusal.
- Choose the occupation and salary carefully: The occupation must match the duties the worker will actually perform, and the salary must meet the relevant threshold and the market rate.
- Run compliant labour market testing: unless an exemption applies.
- Pay every sponsor cost from the business account
- Set up compliance systems from day one: a calendar for 28-day notifications, a records file for each sponsored worker, and a process to check that duties and pay still match the nomination.
- Plan for permanent residence early: so the 186 Temporary Residence Transition or Direct Entry criteria can be met when the time comes.
How can Hannan Tew Lawyers help?
Most of our work is employer-sponsored migration, and we regularly advise start-ups and overseas companies establishing in Australia. We can assess which sponsorship pathway fits, prepare the sponsorship, nomination and visa applications, review your evidence before lodgement, and advise on compliance after approval.
Our fees are set out on our pricing page, and you can estimate total costs with our cost calculator. If you are planning to sponsor workers, or yourself, through a new business, book a consultation and we will give you a clear view of your options before you commit to a structure.
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