Small Businesses Sponsoring a Visa 186: Limits and Conditions

Can a small business sponsor a Visa 186?

The short answer is yes, but with a higher level of scrutiny and stricter evidence requirements than for a large business. Nothing in migration law prevents a small business from being a Visa 186 sponsoring employer. However, the DHA asks more questions and requires stronger evidence when assessing applications from smaller businesses.

The reason the DHA is more cautious with small businesses is the higher risk of misuse of the sponsorship system — particularly where a business owner sponsors themselves or a family member, or creates a sham position to obtain a visa.

The issue of self-nomination

This is one of the most important legal issues to understand clearly:

Under current rules, a business owner cannot sponsor themselves through their own company (other than in some very narrow exceptions). The reason: the Visa 186 requires a genuine relationship between employer and employee, in which the employer holds control of the work. If the same person is both the company owner and the nominee, that relationship is not genuine.

There are, however, some exceptions applied in practice:

• Where the company has an independent governance structure (for example, a board of directors or other co-owners) and the nominated position is genuinely controlled by a third party within the company.
• Where the nominee is not a controlling shareholder but only a minority shareholder with no control over operations.

Each case must be assessed individually, and legal advice is highly advisable.

Requirements on revenue and scale of operations

The DHA does not publish a specific minimum revenue threshold for a Visa 186 sponsoring employer. However, internal guidance and assessment practice indicate that:

• The business needs genuine, stable operations, shown through revenue, tax records and commercial contracts.
• Current staffing levels should be consistent with adding a new position — for example, a two-person business suddenly needing a senior specialist will attract more questions.
• Revenue must be sufficient to pay a salary at the TSMIT (Temporary Skilled Migration Income Threshold) or the market rate, whichever is higher.

Proving a genuine position: the heart of the case

A genuine position is a core requirement of every Visa 186 nomination. For a small business, the DHA scrutinises questions such as:

• Did this position exist before the nomination, or was it created only to support a visa?
• Is the work genuinely needed for the business operations?
• Why can the position not be filled by an Australian citizen or PR holder?
• Does the job description match the registered ANZSCO code?

To answer these convincingly, a small business case should include:

• Evidence of earlier efforts to recruit locally (recruitment advertisements, reasons they were unsuccessful).
• Client contracts showing a need to expand operations.
• The company’s organisational structure and a clear description of where the new position sits within it.
• A business plan and financial forecasts if available.

DHA guidance on owner-employees

The DHA has internal guidance on “owner-employee” situations. Case officers are directed to consider:

• The level of control the nominee has over the company.
• Whether anyone else in the company has authority to supervise the nominee’s work.
• The nominee’s shareholding structure and voting rights.

There is no absolute rule that “a shareholder below X% qualifies”, but in general a minority shareholder (under 20%) without controlling power is more likely to satisfy this requirement than a majority shareholder.

Practical advice

A small business owner wanting to sponsor an employee for a Visa 186 should:

1. Gather complete business documentation early (at least two years of financial records).
2. Avoid lodging while the business has financial or legal problems.
3. Consult a migration agent experienced with small business cases.
4. Be prepared for the DHA to send a Request for Information.