A Foreign Citizen’s Guide to Business in Australia

As various global leaders push our world to greater instability, business owners are still looking for growth and a safe place to do business. While Australia has often been considered a remote part of the world, it’s geographic isolation and untapped business potential are making it of more interest to foreign business owners. No matter whether you are interested in owning an Australian business or investing in an existing establishment, there are some basics you should be aware of before moving forward.

Why Start a Business in Australia?

There is no question that many problems in the global arena are making both citizens and business owners very nervous. When you don’t know if your factory or headquarters are going to be the target of a terror attack or a bombing by a rouge nation, it can be difficult to make plans for the future and be completely focused on implementing them. Sadly, outlooks that were considered paranoia just a few years ago are now at the forefront of everyone’s mind. Even though Australia is not immune to terror attacks or bombings from rouge nations, we are geographically isolated enough that the brunt of the attacks are likely to occur elsewhere. As a result, if you have an interest in building a factory, or want to create a safe haven for key operational points, Australia may be the perfect answer. Here are some other reasons why more and more foreign citizens are looking to start businesses in Australia:

  • If you live in a nation that primarily speaks English, there will be much less of a language based learning curve when working with Australian citizens and business partners.

  • Australia also has a robust presence of foreign business investors from Asia and other parts of the world. As such, if you are looking for a “neutral ground” where you can meet and connect with others who are interested in similar business goals, this country may offer the best place for you to achieve your goals.

  • Australia’s economy is growing and thriving at an enormous rate. Unlike other countries where the outlook is grim, the Australian economy is driven by a sense of purpose and moving forward in a positive and profitable direction.

The Best Opportunities

Globally speaking, there is a fierce amount of competition between web based business and ones that focus more on conventional “brick and mortar” designs. While some businesses can be successfully operated in your basement, others require land, resources, and a qualified staff to carry out a range of tasks. When you open a business in Australia when compared to other countries you can enjoy these advantages:

  • obtaining the rights to use land in some areas is much cheaper than what you would pay for similar land in other parts of the world.

  • Australian citizens are well educated, highly skilled people that can easily perform every task required for operating a successful business.

  • Government guidelines and laws still less restrictive than what you will find in other countries.

  • Australia is investing in innovation, especially in the arena of energy. No matter whether you want to run your business (and save money on energy costs) using solar panels or some other form of renewable energy, rest assured that you will find it much easier to achieve your goals.

  • A great deal of money is also being spent on infrastructure and support systems that make it easier to run your business. From upgraded roads to public transport, you will find that Australia is growing faster and improving every day.

Does Locality Matter?

As with any other country, Australia has areas that are move developed than others. Cities and heavily populated areas have different laws and guidelines for businesses. If you are opening a restaurant or some other business that relies on the local population for consumers, then you will find a fair degree of competition. That doesn’t mean you will fail, however, because there is still plenty of room for innovation and bringing new ideas that can catch on very quickly.

When it comes to building factories or other locations where you will house large numbers of employees, more rural areas may seem appealing. On the other side of the equation, do not overlook the outskirts of cities or smaller localities where you can still find a high quality labour force, affordable land, and access to resources that will reduce the amount of work you need to do to gain basic utilities. That all being said, if you have the money to invest and experience, there is no harm at all in looking to more rural areas. You will find that, unlike in some other countries, development of renewable energy sources and upgrading the land in other ways will be encouraged by the government.

What About Taxes and Employee Costs?

Even though there is an enormous level of disagreement about the impact of taxes on business productivity and hiring, Australia is decidedly friendlier to businesses and citizens than several other countries. Here are just a few things to consider:

  • the “no tax” threshold for Australian citizens is $18,200, which means people making minimum wage can survive without the employer having to make massive payroll contributions on top of the gross pay and benefits. When compared to the no tax threshold, or standard deduction in other countries, this can easily represent a 35% or greater reduction in cost for each employee. Not only will this make it easier to boost profits, you can always turn that money back into expanding your business and contributing to a thriving economy.

  • Australia has a fairly functional and efficient healthcare system that only requires a 2% levy on citizens that make above the low income threshold. You will not be forced to spend hundreds of dollars a month in premiums to ensure that your employees have adequate health care, let alone worry about excessive compliance demands.

  • The tax rate for businesses is also significantly lower than in other developed countries. At the current time, small businesses that earn less than 2 million a year have a tax rate of 28.5% while the rest have a 30% tax rate. Capital gains and other taxes can easily be offset, and can be lower than what you would pay in other countries.

  • As with other nations, you must have certain business declarations in place as well as licenses to perform certain tasks. In most cases, you will find that it is cheaper and easier to obtain these documents than it is in other countries. Even when you compare costs equalized for other currencies, you will find that Australia is a better, and cheaper place to do business.

  • At the current time, capital gains tax is integrated with income tax and pegged to inflation. Depending on when you buy or sell a specific asset, your tax burden may be higher or lower. Sadly, if inflation levels go up, you may wind up paying more tax on capital gains even though your spending power hasn’t increased by having “more” money onhand.

  • Corporate income tax also covers your shareholder tax. In many other countries, corporations pay a tax on any profits made. Once dividends are assigned to shareholders, the individual shareholders must also pay even more in their personal income tax. By contrast, in Australia, once the business pays its income tax, “Franking credits” are generated for each shareholder. These credits are then applied to personal income tax so that very little, if any tax is paid on dividends received from Australian corporations.

How Does Australian Corporate Law Work?

Most of Australian corporate law is directly based on, and adopted from UK corporate law. It is also similar to structures found in most other countries in the sense that a corporation is considered a separate legal entity. As such, it has rights and obligations that are independent of specific individuals. This includes the right to borrow money, raise capital, and have its assets protected and separated from those of the shareholders and business owners.

There are two basic kinds of corporations in Australia that are regulated by ASIC (Australian Securities and Investments Commission). Public corporations can raise money by selling stocks on the national market. Pty Ltd corporations, on the other hand, are designated as privately owned businesses. They cannot take part in public stock offerings, but still enjoy asset protection benefits not available for other business types.

Business owners throughout the world are grappling with an increasingly turbulent global scene and wondering how they will navigate in times when the risk of uncontrollable situations is rising. Because Australia is geographically isolated, thriving economically, and relatively friendly to businesses, it should come as no surprise that foreign people are looking to build and invest here. As you consider the tax based and other advantages, do not hesitate to find out more about the actual process of starting a business in Australia if you are not already an Australian citizen. Here at (name), we are dedicated to welcoming your business plans and helping your business and our nation thrive.