Doing business in Australia

There is a wide variety of benefits of doing business in Australia. This is due in large part to Australian government having adopted an “open for business” stance; it has worked on a number of initiatives to reduce barriers to foreign direct investment.

Multinational companies have long viewed Australia as offering a compelling case to businesses who wish to target the dynamic Asia Pacific region. The various business centres in Australia are good places for such companies to establish regional headquarters; they include Melbourne (Victoria), Brisbane (Queensland) and Sydney (New South Wales).

Another advantage of doing business in Australia is that the office space costs in Australia’s business centres are fairly low compared to most other major business centres, with Sydney being the highest, ranked at 14th. Australia’s telecommunications costs are also very competitive.

There are four types of business structures can be used to conduct business in Australia, and each of them have different legal requirements:

• Company
• Trust
• Partnership
• Sole Trader

Non-residents are required to first acquire a work visa in order to start doing business in Australia. Happily, Australia’s business innovation and investment programme provides visas to qualifying foreigners looking to establish a business in the region.

If you wish to run your business as a Company in Australia, you will need to incorporate through the Australian Securities and Investments Commission (ASIC) register. Bear in mind that ASIC requires that at least one of the directors of your company needs to be an Australian resident.

Your business will also require a registered office address in Australia in order to carry on its operations, unless you have chosen to incorporate as a sole proprietorship. Businessmen looking to expand into Australia will also need to provide some basic information about their business, such as the business name, contact details of the company secretary and the registered office address.

Business people will then need an application for an Australian Business Number (ABN) and a Tax File Number (TFN), as this will enable them to lodge their tax returns.

Once your business name has been registered with ASIC and the business has registered for Goods and Services Tax, it is then a question of acquiring licences and permits that will allow the company to do business in Australia.

The Australian economy is home to several exciting, fast-growing sectors, from financial services and fintech to technology and eCommerce.

Australia is one of the leading financial centres in the Asia Pacific region: the Australian Securities Exchange ranks among the 10 largest listed exchanges, with a market capitalisation in the region of AU$1.6 trillion. Australia’s status is a financial centre is further cemented by its alliance with markets throughout the region, which has played an important role in providing businesspeople doing business in the Asia Pacific region with a comprehensive range of financial services.

Australia is also home to a thriving mining industry, which grew $6.4bn (4.1%) in 2020-21, a sizeable agriculture industry which grew $5.7bn (36.4%) over the same period, and a retail trade industry in which earnings grew by $6.1bn (19.8%).

Australia is a fantastic strategic location for UK tech companies looking to expand their operations. This is due to its impressive research infrastructure and the innovative, problem-solving skills provided by its highly educated, multicultural workforce. This case is further bolstered by the fact that UK signed a trade deal with Australia in 2021 that includes agreements in the digital and tech sectors, where Britain is a world leader.

From an export perspective, Australia has a large, rapidly growing e-commerce market which is projected to reach $32.3bn by 2024; there are lots of opportunities for UK businesses to make handsome profits by selling online to Australian consumers. One way to do this is by taking advantage of the new marketplaces that have sprung up in recent years, enabling UK retailers to sell online in Australia. These include Catch.com.au and Amazon Australia.

Australians have never been renowned for their excessive formality. Australian business culture is fairly relaxed and casual, but we would advise dressing conservatively and shaking hands when meeting for the first time; it is generally considered rude to decline to shake another’s hand in a business context.

The corporate tax rate in Australia is 30%; this is above the OECD average of 23.6%.

However, small and medium-sized businesses are subject to a reduced tax rate of 25%. This reduced tax rate applies only to those companies that fall under the aggregated turnover threshold of AUD 50 million.