Opening a Business Account in Australia

Opening a Business Account in Australia

In 2021-22, businesses in Australia saw a growth of nearly 167,646. With its rich resources and work culture, Australia is undeniably a hotbed for anyone wanting to start a business. And one of the primary considerations when launching your business is opening a business account.

Whether you are operating under a partnership, company, or trust structure, any business has tax obligations. And to ensure you comply with the country’s regulations and service your clients efficiently, having a business bank account separate from your private account is crucial.

Let’s take a closer look at how you can open a business bank account in Australia, the different banks to consider, and how you can benefit from them.

How to Open a Business Bank Account

Setting up a business account is much like opening a personal account, except you need to provide more documents. Ensuring all the paperwork is complete can make this process smooth and seamless.

Documentary Requirements

Depending on the bank of your choice, different financial institutions may require more or fewer documents. On average, these are some of the common documents you will need to submit:

  • Your business or company’s full name. This name should be the same as the one used to register with the Australia Securities and Investments Commission or ASIC.
  • The complete and primary address of your business or company.
  • The complete address where you registered your business or company.
  • Your business or company’s nine-digit Australian Company Number (ACN).
  • Your business or company’s 11-digit Australian Business Number (ABN).
  • Your business or company’s tax file number.
  • The kind of industry that your business or company belongs to.
  • The full names and one identification card of your business or company’s director/s. Driver’s licenses or valid passports are accepted; you can bring the original document or a certified copy.
  • The full names and one identification card of anyone managing the business account.
  • If your business is operated under a partnership or trust, the original or certified copy of your partnership agreement document or the trust deed.

If you are a foreign business owner, you can still open a business bank account in Australia regardless of whether you live in Australia. But be sure to ask for details because dual citizens might have different financial implications.

Prepare the same documents as above and secure your Certificate of Business Registration as proof that the business is registered in Australia.

Since Australia has consented to intergovernmental agreements (IGA) with the United States, financial institutions in Australia must comply with the Foreign Account Tax Compliance (FATCA) to address tax evasion. Additionally, financial institutions in Australia adhere to the Common Reporting Standard (CRS), where information on the accounts owned by non-residents is exchanged accordingly. Banks are thus required to collect the tax residency information of their foreign clients.

The Process of Opening a Business Account

Opening a business account in Australia takes longer than a personal account, but the steps are similar.

Follow the steps below to open a business account by visiting the bank of your choice:

  • #1. Submit all the documents required to the branch.
  • #2. The bank representative will check and review the documents and inform you if any additional paperwork needs to be submitted.
  • #3. The bank will process the business account and provide your account number.

If you opt to process everything online, make sure you have a scanned copy of your documents, and here’s what you need to do:

  • #1. Visit your preferred bank and look for the application form on their website.
  • #2. Fill out the application form and upload the necessary documents.
  • #3. Submit your online application.
  • #4. The bank will verify and approve the application based on the documents you’ve submitted and will proceed with opening the account for you.
  • #5. You can opt to have the bank mail the credit or debit cards for your account to you or collect them from the branch where you opened the account.

Australia’s Top Four Banks

With 95 banks nationwide serving nearly 22.9 million customers, choosing the right bank for your needs can seem complicated. To simplify your job, we’ve compiled this handy guide on the four major banks in Australia — considered the Big 4.

#1. National Australian Bank (NAB)

Considered the safest bank in the country, NAB is also among Australia’s largest banks, with more than 1,500 branches of this financial institution spread across the country.

NAB offers different kinds of business accounts tailored to fit different organizations. Here are the two main business accounts NAB offers:

NAB Business Everyday Account ($0 Monthly Fee)

Application for this type of business account is quick and can be completed in 10 minutes or less. It provides business owners with the flexibility and perks of a business account but with zero monthly fees.

The NAB Business Everyday Account is best suited for organizations that mainly transact with their online banking needs.

For this particular account, the rates and fees are:

  • Monthly account fee: $0
  • Electronic transactions: $0
  • EFTPOS transactions: $0
  • Banker-assisted deposit or withdrawal (Without cheque or item lodged): $2.50 per transaction.
  • Banker-assisted deposit (With cheque or item lodged): $0.60 per cheque per item in addition to the deposit fee
  • Express Business Deposits (EBD), Express Cheque Deposits (ECD) (Without cheque or item lodged): $0.60 per transaction
  • Cheques and items lodged with a deposit via EBD or ECD: $0.60 per cheque per item in addition to the deposit fee
  • Cheques written: $0.60 per cheque
  • NAB ATM transactions: $0
  • Mobile cheque deposits via the app: $0
  • Multiple funds transfer via NAB Internet Banking: $0.20 per credit

NAB Business Everyday Account ($10 Monthly Fee)

While having the same account name can make it confusing, remember that this type of Business Everyday Account requires a monthly fee. This account is recommended for businesses that make daily transactions and handle numerous cheques and cash.

Regarding rates and fees, the 30 biggest transactions per month under this account are free. The other costs involved are:

  • Monthly account fee: $10
  • Electronic transactions: $0
  • EFTPOS transactions: $0
  • Express Business Deposits (EBD), Express Cheque Deposits (ECD): $ 0.60 per transaction
  • Banker-assisted transactions: $2.50 per transaction
  • Cheques written: $0.60 per cheque

#2. ANZ Bank

As Australia’s fourth largest bank, ANZ offers three business bank accounts and other specialized banking products for business owners.

With more than 6 million customers and 570 branches across Australia, business owners can be guaranteed that their money is secure and can grow with ANZ. Its low fees also make it a popular choice for many.

For business owners, ANZ offers three types of accounts:

ANZ Business Essentials ($0 Monthly Fee)

This free business account provides business owners with all the essential features they may need. It comes with 20 ANZ ATM cards, and you can link this business account to your accounting software. You’ll also receive your ANZ Business Visa Debit card bearing your company name.

ANZ Business Advantage ($10 Monthly Fee)

This business account’s main benefit is that it allows unlimited ANZ monthly transactions and provides easy access to Small Business Specialists. Similar to the Essentials account, you also get a Visa Debit card under your business or company name.

ANZ Business Extra ($22 Monthly Fee)

This is another lucrative option for businesses that want unlimited ANZ business transactions. It also offers elective-linked overdrafts with customized pricing.

#3. Commonwealth Bank

Another bank that can cater to your business needs is the Commonwealth Bank. It has a regular business account with two options: online and in-branch.

Online Business Account

As the name suggests, this is intended for businesses that primarily conduct their financial transactions online. The fees involved for this type of account are:

  • Monthly account fee: $0
  • Transaction fee: $3 per transaction
  • Electronic transactions: $0
  • Commonwealth Bank ATM cash withdrawals in Australia: $0
  • Cheques transactions: $3 per transaction

In-Branch Business Account

This traditional in-branch business account is ideal if one visits the bank or post office regularly. The fees involved for this account are:

  • Monthly account fee: $10
  • Transaction fee: $3 per transaction after maximizing the first 20 transactions
  • Electronic transactions: $0
  • Commonwealth Bank ATM cash withdrawals in Australia: $0
  • Cheques transactions: $3 per transaction

#4. Westpac

The Westpac Group is the first bank in Australia and thus has a loyal customer base. With more than 1,400 branches across Australia and 3,850 Westpac ATMs distributed nationwide, Westpac is a popular bank for both private and business accounts.

The bank offers two types of feature-rich business accounts:

Business One

This type of account is for business owners who do most of their banking online or mobile phones. The fees for this kind of account are:

  • Monthly account fee: $0
  • Staff-assisted Transaction fee: $3
  • Electronic transactions: $0

Business One Plus

Business owners who do their banking on all channels, including visiting the bank and online and mobile transactions, may benefit from the One Plus account. Here are the fees involved:

  • Monthly account fee: $10
  • Staff-assisted Transaction fee: $3 per transaction after maximizing the first 25 staff-assisted transactions
  • Electronic transactions: $0

Australian Fintech and Neobanks with Business Accounts

With the name derived from “neo” meaning new and bank, neobanks are quite literally a new type of bank. Neobanks offer innovative banking solutions that feature unique financial technology or fintech.

Offering 100% digital operability, neobanks and fintech companies are seeing a rapid rise in popularity for business owners across Australia. It offers superior convenience as one can set up and create business and merchant services accounts in just a matter of minutes.

Take a look at the top fintech and neobanking contenders in Australia:

#1. Archa

The company offers three plans for your business. Solo costs $14 monthly and is inclusive for one user only; Team, which starts with two members at a minimum cost of $38 per month; and Custom, where the pricing is discussed and tailored to your needs.

#2. Parpera

It provides three plans for business owners, freelancers, and sole traders. You may opt for Run at $15 per month, Pro at $35, or Automate at $75 monthly. These business accounts all come with a virtual debit card and include unlimited invoicing as a basic feature.

#3. Revolut

With more than 3 million customers today and growing, Revolut boasts three appealing business accounts. Grow at $25 per month, Scale at $100 per month, and Enterprise at custom pricing.

Traditional Bank or Fintech Solutions: Which is the Better?

Whether you opt for a traditional business account in a bank or an all-online platform through neobanks or fintech solutions depends entirely on your business needs. Both options come with their own sets of pros and cons.

Fintech companies undeniably offer the advantage of accessibility, mobility, and 24/7 availability, whereas traditional banks ensure greater confidence concerning where your money is being saved.

Consider your business needs and how you handle your financial transactions to determine the best fit.

Traditional banking will always be present, but fintech solutions show promise with their steady and upward growth in Australia, estimating a CAGR of 28.3% and reaching US$ 9.7 billion by 2028. It offers an appealing solution to small and medium-scale businesses, providing more accessible financial services compared to traditional banks.