Start a business in Australia

If you’ve ever considered working for yourself, starting a business is an obvious and exciting solution. The process of starting a business in Australia isn’t too complicated, and there’s lots of help out there to allow you to register your new enterprise and start to trade.

So – what do I need to start a business in Australia? How do I choose the right entity type, and get a business bank account ready before I start to trade? And what help is there from start up business loans in Australia? Join us as we explore the ins and outs of how to start a business in Australia, in person or online. In this article, we’re covering followings;

Business culture in Australia

Before we look at how to start your own business it helps to understand a little about Australian business culture. Global business culture can vary a lot, so getting to grips with the etiquette before you dive in can help avoid unnecessary issues or headaches.

Australian government statistics show that an astonishing 97%+ of all businesses in Australia are classified as small businesses, employing 0 – 19 people. Small businesses are the backbone of the economy, so you won’t be alone once you start your business in Australia.

When it comes to business etiquette, Australians may be laid back, but they’re not likely to mince their words. Expect brief, direct communication – and be prompt if you have an appointment set. Time keeping is important, and considered respectful, although you won’t be expected to take a gift along to a business meeting or event as you may in some cultures.

Who can start a business in Australia?

Before we look at how to open a physical business, or how to start an online business from Australia, let’s focus on who is entitled to start a business in the country. It’s important to note that having a business in Australia isn’t enough on its own to get you a visa or right to reside there. If you’re planning on moving to Australia, you’ll need to look at the visa and permits which could work for your situation carefully before you move.

To own a business in Australia you may consider Australian business visaoptions like:

• Subclass 132 – Business Talent (Permanent) visa
• Subclass 188 – Business Innovation and Investment (Provisional) visa
• Subclass 888 – Business Innovation and Investment (Permanent) visa

These visas vary and may be temporary or permanent and may require you to have the sponsorship of a government agency for example. Getting a visa agent to help may be a quick way to narrow down your options, but there’s also lots of useful information on the Australian government immigration pages.

Beyond this, you’ll need to make sure you’re able to legally and financially start the business entity type you intend to run in Australia – we’ve got more on the different legal structures you may select coming up next. Once you’ve picked an entity type and checked you’re practically able to open your business, registering is a fairly straightforward process, particularly for sole traders and people working in a partnership arrangement. If you’re opening a company and have foreign directors this is also usually acceptable as long as you have one or more Australian resident directors on your board.

Legal structures for businesses in Australia

One of the first decisions when you choose to start a business in Australia is the entity type which suits your needs. Different countries have different legal business structures, and while they’re often quite similar from one country to the next, it’s worth getting to know the most common entity types used in Australia before you register. Here’s a summary.

Sole trader

Registering as a sole trader is the simplest way to start to do business in Australia. You’ll need to be the sole owner, and you’re then considered to be legally responsible for all aspects of the business, including any debt incurred.

As a sole trader you may need to register for and pay GST depending on your turnover, and you’re entitled to get an Australian Business Number (ABN). You will use your individual tax file number (TFN) to report your earnings for tax purposes, which are included on your individual tax returns along with any other income.

Partnership

A partnership is 2 or more people who share responsibility for a business together. The partners share any income and debts from the business, either in equal shares, or with a written partner agreement in any other agreed format.

A partnership needs to have its own TFN and ABN, and you may need to register for and pay GST depending on the turnover you achieve. Each partner reports their share of the business income on their own personal tax return, as you would if you were a sole trader.

Company

A company is a limited liability model which means that the owners of the business are considered as separate to the business itself. Owners and directors have important obligations but may not be obliged to pay any company debt from their own funds in the event the business runs into trouble.

Companies are regulated by the Australian Securities and Investments Commission (ASIC), have a more complex reporting requirement than sole traders and partnerships, and pay tax at the applicable company tax rate.

Trust

A trust is managed by trustees who may be individuals or companies. The trustee is required to file taxes and complete other important business administration tasks.

A trust must have its own TFN, and lodge tax returns annually. The trust may also be required to pay GST and file additional reports to the ATO and other bodies, depending on the situation.

How to start a business in Australia as an expat

So – how do you start a business in Australia as an expat? This process will vary for different individuals and entity types, but is likely to include:

How to obtain a business visa in country

The most common visas to get if you’re applying in advance of moving to Australia to open your company are:

• Subclass 132 – Business Talent (Permanent) visa
• Subclass 188 – Business Innovation and Investment (Provisional) visa

The Business Talent visa requires you to be nominated by a state or territory government agency and then invited to apply. You must also have assets of funding lined up of 1 million AUD or more.

For a Business Innovation and Investment you have to be nominated by an eligible government organisation prior to applying, usually an Australian State or Territory government agency. There are several different visa streams depending on whether you’re investing or setting up a startup, with variable features and requirements which can include the costs and minimum investment amount.

Registering your business in Australia

The next step is choosing a name and registering the business, a process which is managed through various government agencies including the Business Registration Service and the Australian Tax Office.

You’ll be able to search the Australian Securities and Investments Commission (ASIC) business names register to check that the name you want is available to register, and then apply through the Business Registration Service while also getting your Australian Business Number (ABN). The process of registering your business name takes only 10 – 15 minutes and is done online.

You can then register for Australian tax, which can include different processes depending on your business type and your expected turnover.

Licenses and permits

Some Australian businesses may need licenses or permits . There are helpful tools online to navigate this, as the requirements depend on your industry, business type, and the state you register in. You can also get help from a relevant industry body or a professional advisor if you need to.

Managing international business finances

Before you start to make or receive payments on behalf of your business in Australia you’ll need a business account. You can open a business account online for convenience, which may also offer you business friendly perks and low costs.

As an expat business owner you may find you need to manage international transactions frequently. You may also find there are currency exchange challenges in international payment processing – particularly when it comes to costs. If you open an account which can hold AUD only, any incoming foreign payments must be converted to dollars for deposit, which might not be practical if you need to then use your balance to pay contractors or suppliers overseas.

Getting a business multi-currency account from a provider like Wise instead offers benefits to anyone trading internationally or working with overseas suppliers and staff. You can open a Wise Business account online or in the Wise app, to hold 40+ currencies and make easy, low cost cross-currency payments to 140+ countries using the mid-market exchange rate.

Your account also offers ways of receiving funds from other countries in a selection of currencies. This means you could get paid by a customer in GBP, USD or EUR, and leave the balance in that currency until you need it for a payment yourself. Or convert back to AUD to withdraw, and access the mid-market rate with low, transparent fees.

Starting up an online business in Australia

To open an online business in Australia you’ll need to register your company in the same way as you would a physical store or other business type. You may also need to get permits and licenses depending on the type of company and niche you work in.

Since online businesses often deal with international clients you’re more likely than ever to have international payment processing needs, which makes it important to get a multi-currency account which can handle your incoming and outgoing payments smoothly. Consider Wise Business for receiving payments from global customers and for sending funds out to 140+ countries with low costs and the mid-market exchange rate.

Foreign companies opening up a branch or subsidiary in Australia

The process for setting up a branch or subsidiary in Australia is managed through ASIC. Here the rules for registration and the obligations of the company owners or directors depend on the details of the business registration.

Foreign companies must have an Australian registered office, display the company’s name, use a local agent, and report to ASIC as other Australian registered companies do. You’ll need to register if you’re a foreign company, and comply with ASIC rules, but there are slight variances if you take over an Australian company to act as your subsidiary in Australia for example.

ASIC recommends getting individual professional advice to make sure you get the process right in your own unique situation.

Starting up a non-profit company in Australia

If you’re opening a not for profit company in Australia you’ll need to register it using an appropriate legal structure and complete your charity registration with the Australian Charities and Not-for-profits Commission (ACNC).

The ATO may offer not for profit tax concessions, and you might also be able to apply for deductible gift recipient (DGR) status. The process here is pretty strict and complex, so you may benefit from professional advice to make sure you register in the most beneficial way, and can access any tax concessions or support which may help your new charity.

Administering your business in Australia

It’s not often the most exciting part of your to do list as a business founder, but the business administration aspects of starting a business are still essential to its success. Here are some main aspects to consider:

• Insurance – some business insurance is mandatory, such as public liability insurance and workers compensation insurance, if you have employees. Other insurance types may be optional but can give you peace of mind and protection if things go wrong.
• Banking – open a business account before you start to trade to keep your personal and business money separate. Even if having a dedicated account isn’t mandatory it can make it far easier to run your business, file your taxes and analyse your profits.
• Accounting and taxes – having cloud based accounting tools is a common choice for Australian businesses, when your company isn’t quite complex enough to need a dedicated full time in house accountant. Whichever option you choose, keep on top of your accounting and tax liabilities to stay on the right side of the law.
• Hiring staff – if you’re hiring employees in Australia you’ll have to comply with employment law, and follow other duties such as reporting and paying tax and super. As hiring can be complicated many companies have agency support when starting out.

Support and advice when starting up a business in Australia

The Australian government offers a lot of support and advice for new businesses, including business loans or grants to help get your enterprise off the ground. Loans and financial help can be found based on your location, industry, company objective and other factors.

The government also has options to signpost relevant qualified business advisors and to find training events in your area which may help you build your skillset to grow your business.

Corporate social responsibility in Australia

There’s not one single Corporate social responsibility (CSR) law in Australia, but many local businesses comply with local, national and global initiatives to ensure they are responsible entities.

Some Australian listed companies must report on CSR matters annually, with detail of any CSR risks in their business model and information of how they intend to manage it. Topics which are commonly discussed in these reports and the wider CSR debate in Australia include:

• Climate change
• Corruption
• Human rights issues, including modern slavery
• Diversity
• Data and privacy
• Sustainability reporting

The Australian Institute of Company Directors offers useful insight into CSR in Australia as well as some training courses and materials to learn more if you would like to.

Useful resources

• Wise – Australian business accounts supporting 40+ currencies
• Australian government – working visa options
• Australian government – starting a business guide
• Australian Taxation Office – (ATO) starting or closing a business
• Australian Business Registration Service – register your business, look up businesses and access other useful tools
• ATO – business entities and taxation requirements
• Australian government – guide to hiring staff
• Australian government – business loans and grants
• Australian government – business advisors
• Australian government – training and events
• Australian Institute of Company Directors – CSR information and training