The Most Efficient Way to Open a Business in Australia
Australia is one of the countries in the world that welcomes foreign direct investment through investor visas or allows foreigners to open businesses within Australia. The thought process behind this is that these entities have the potential to benefit the Australian economy in a positive way. It is important for foreigners contemplating their various business entity options in Australia and carefully consider the nature of their budding enterprise in order to assess which business entity type is appropriate. Many times, this can be solved by drafting a proper business plan in order to assess the goals of the company. Even the most basic business plan will help to get the objectives in the proper place and assist the founder in choosing the proper entity in Australia. In order to learn more about the proper business entity in Australia and how business financing works, it is recommended to read the conversation below:
Can Immigrants Open a Business Easily in Australia?
Immigrants can absolutely open businesses in Australia; however, it is important to understand that there are specific visa regulations that govern what foreign citizens can do in terms of opening a business in Australia. If you’re considering dual citizenship, it’s also important to understand the financial implications that come with it.
Typically, it is best to have one Australian Director of the company that is a resident of Australia. The company must also have a physical address in Australia and not merely use a postal box for the registration. Another possible route depends on the amount of capital that the business owner has available through venture capital or established business history. Depending on the amount of capital and prior business history abroad, these visas will be slightly simpler or more difficult.
For example, the Business Talent 132 Subclass Visa is going to require a demonstration of substantial capital or venture capital interests that normally are in excess of $1 million Australian for venture capital and substantial established history as deemed appropriate by the particular state of Australia. Another possible path is obtaining a permanent visa in Australia and then starting a business from nothing. Both paths are challenging yet rewarding in the long term.
How Does the Process of Opening a Business in Australia Compare to Other Countries?
Australia is undoubtedly more organised than many countries in the world. The process to open a business in Australia is quite similar to what one will find in the United Kingdom and the United States, which is no surprise given the proximity of legal histories and cultures these three countries possess. That said, Australia is relatively simple because the information is regularly apparent in terms of opening businesses in comparison to Mainland China and Venezuela, where the paperwork and bureaucracy can be pretty daunting for foreigners and citizens to undertake.
Another aspect that the Australian government does quite well is that they make their information readily transparent on their website. For example, foreigners and citizens interested in opening businesses in Australia can look at the process and requirements here. The most critical step to opening a business in Australia is selecting the type of entity and then getting an Australian Business Number (ABN) to permit the opening of business bank accounts and applications for import/export licenses that correspond to your business. Once those two items are taken care of, it becomes a matter of filling out the right forms and paying the appropriate fees. This is why opening a business in Australia is quite simplified in comparison to other parts of the world.
Is Australia Small-Business Friendly?
Before we look at whether or not Australia is business-friendly, it has to be understood that fewer economies in the world are as reliant on SMEs as Australia. Small businesses make up a huge portion of the workforce and businesses in general.
It then comes as little surprise that Australia is rated as one of the most business-friendly economies in the world. Australia is a prosperous place for small businesses with a sound banking system, a reliable central bank, high social capital, and generous grant schemes. This is perhaps why the startup industry is booming there, and many British companies were relocating there once Brexit was announced. Many of the top FX companies in the world have offices in Australia.
In general, Australia is very relaxed and informal when it comes to its business etiquette. This makes it very hospitable and easy to integrate when starting a business there. The country is politically very stable, and there hasn’t been a recession since the beginning of the 90s. Small businesses get a reduction on the standard 30% corporate tax, and there’s an uncountable amount of grants and programmes to help businesses grow.
Steps to Take to Properly Open a Business in Australia
- Assess the Entity Type: There are four main structures to businesses in Australia. The first is a sole trader, an individual operating as the only individual who retains the legal responsibility of running the business. The second is the company, which is a legal entity that essentially becomes its own legal personality and is entirely separate from its shareholders. The third is a partnership, an association of individuals who intend to run a business together but do not own a company together. The fourth is a trust, which holds the property or income to the benefit of others.
- Identify the Business Type You Would Like: Choosing the entity type is one aspect; however, it is also important to consider whether you would like to open a franchise, online business, family business, home-based business, independent contractor or import/exporter. All of these have different tax implications that have to be considered in conjunction with the selection of the entity type itself.
- Apply for an Australian Business Number (ABN): It is important to be reviewed by the Australian government to verify that the business you are trying to apply for meetings ABN qualifications such as: genuinely running your own business, paying your own insurance, sourcing your own clients, etc. To apply for your ABN number, click here.
- Register a Website Name: A website is not required for registering an entity in Australia; however, it is highly recommended by the Australian government for customers to take your business venture seriously. This is why the checklist is heavily included in opening a business entity in Australia.
- Register for the Appropriate Taxes
- Obtain Premises by Buying or Leasing
- Arrange Business Insurance
- Find Out to Sell Products and Services
Aussie Non-Bank Lenders
Frequently Asked Questions About Opening Up Businesses in Australia
Below please find a list of the frequently asked questions when trying to ascertain how to open a business in Australia:
Final Remarks on the Subject
Australia is truly a fantastic locale to invest in one’s company. What is important to remember is that there usually has to be some form of Australian resident and permanent Australian address involved in order to have a business entity registered for those that do not meet the established business or venture capital thresholds. In terms of registration, Australia truly has one of the most streamlined corporate registration processes in the world. The key is to determine which entity is appropriate for your budding business venture and which tax implications accompany it. Once you make these decisions, you will be able to make a sound decision about which entity to register in Australia and begin the path to being a successful business owner within Australia.