Starting a business in Australia as a foreign citizen
Setting up your own business in a foreign country is exciting but can also be challenging if you are not prepared. The Australian government actively encourages foreign citizens to start a business in Australia and contribute to the country’s economy. But when you start a business as a non-citizen you need to make sure you know:
- how to get the right visa in Australia
- what legal and regulatory requirements apply to Australian businesses.
Obtaining the right visa
If you are a foreign citizen, you will need a visa to work in Australia. You may consider:
If you are interested in specific visas for foreign citizens who want to set up businesses in regional, rural or low-growth areas of Australia, there are different state and territory-based economic initiatives available.
It is best to seek the advice of an immigration lawyer to work through which Visa is relevant for your circumstances. They will be able to navigate the challenges with obtaining a visa in this instance as well.
In considering the legal and regulatory issues associated with starting and operating a business in Australia as a foreign citizen, you should pay attention to:
1. Setting up an appropriate business structure in Australia
In establishing operations in Australia, an overseas company may choose between two main options available to them, being: setting up a company (subsidiary) or a branch. While you can change your business structure at any time it can be more complex to do so. We recommend you investigate how you plan to operate in Australia before you make any decisions about what may be the most appropriate business structure.
Related: Subsidiary or branch: Choose the right business structure when setting up in Australia
2. Where your business premises will be in Australia (registered business address or office presence)?
Key Australian business centres include Sydney (NSW), Melbourne (VIC), Brisbane (QLD), Adelaide (SA) and Perth (WA).
Australian Business Address
In Australia, your company registrations require you to have an Australian Business Address which is the registered office premises of the company. Azure Group can provide our office as the Business Office address for the company, including redirecting all general correspondence sent to our office.
You may wish to set up an office presence in the state in which you register your business. In this instance you may also choose this as your registered business address.
3. Seeking advice to help you with the regulatory steps involved in the setup process
Azure Group understands the importance of ensuring your corporate set up in Australia is efficiently managed to enable you to focus on setting up your brand and services in this new market. We can assist you with the following Australian Company Set up Services which once complete will enable the company to be fully operational in Australia. These include but are not limited to:
- Australian Company Incorporation & Formation
- Registration Application
- Audit Relief Application
- Substituted Accounting Period Application
- Australian Bank Account Set up
- Australian Insurances Set up
4. Tax matters (how much tax will you need to pay?)
In Australia tax is governed by the Australian Taxation Office (ATO). Generally, if you are earning money in Australia regardless of your structure you will be required to pay tax. You must comply with a range of obligations. Failure to comply with the Australian governing bodies can result in heavy fines or even a criminal conviction. This is a specialised area and it is essential that you get the support and advice of a registered tax accountant.
5. Do you want to employ Australian workers? (Australian payroll + Single Touch Payroll (“STP”), what you need to know)
When employing staff in Australia, you firstly need to ensure that they are legally allowed to work in Australia. Those that can work here legally are Australian citizens, permanent residents, and New Zealand citizens. If they are a visitor, they need to have the appropriate working visa.
All workers eligible to work in Australia will have a Tax File Number ("TFN") that is assigned to them by the ATO. You will also need to manage employee Superannuation obligations as necessary under your Employer obligations.
Recently the ATO has introduced new regulation called STP which simplifies reporting to the ATO but adds an initial administration burden to businesses in ensuring the setup is done properly. If you are employing workers in Australia, you will also need to have workers compensation. If you are employing a larger workforce, you may need to pay payroll tax. You need to also be mindful of additional benefits that you give employees, which may be considered a Fringe Benefit as tax may apply (known as a Fringe Benefits Tax).
Related: Australian Payroll: What global companies need to know?
6. How you meet the reporting and disclosure requirements set by the Australian Securities and Investment Commission (ASIC)
Every company in Australia is required to lodge certain notices with ASIC. In addition to annual returns, these include details of any change of officers, registered office, share structure and terms of special resolution of the company, and for the changes in constituent documents etc.
Related: Duties of Directors: Does my business require a Company Secretary?
Have you noticed our #FridayExpertTips... here's one that relates to #International
"One common problem that INTERNATIONAL ENTREPRENEURS encounter is that they don't have all of the resources supporting them in a foreign country. Finding the right support could be critical for GLOBAL SUCCESS."