Starting a business in Australia
What you need to know
Most Australians use a private (or "Pty Ltd") company to conduct business. This is also the choice of 99% of non-residents who start a business here.
Who can be shareholders and directors?
A person or company can own 100% of the shares in an Australian company. This includes non-residents of Australia. But at least one director must ordinarily reside in Australia.
Control of an Australian company
If one or more offshore companies control an Australian company, it is necessary to file an audited annual financial report with ASIC unless relief from this obligation is granted. Applications for relief are usually successful.
A company must have a registered office and a principal place of business, which can be at the same street address, not a post office box.
It does not matter where it is located, an Australian company can carry on business anywhere in Australia.
So, you can use our office in Sydney and do business in Melbourne, Brisbane, etc.
The tax rate in Australia for companies with an annual turnover of less than $2 million is 28.5% of net profits (sales less tax-deductible costs) and 30% above that turnover.
If you are a non-resident of Australia and intend to manage the Australian business from offshore, the profit can be reduced by payments made to your offshore business for management and other services.
But the arrangement must be on commercial terms otherwise you could end up with a tax problem.
It is important to get advice about this.
Goods and Services Tax is 10%. It is invariably added to the sale price and subsequently passed on by the business to the Australian Taxation Office (ATO). The amount passed on to the ATO can be reduced by the GST included in the purchase price of goods and services which your company buys in Australia and which are needed to do business.
You can choose to account for GST on either a cash or accruals basis. Most companies submit GST returns to the ATO quarterly.
Most banks require any non-resident who is either a director or account signatory to have their identity verified by a branch of the bank here in Australia. The bank we use allows your identity to be verified overseas.
Other things you may want help with
If you wish us to handle the appointment of an accountant, or just refer you to an accountancy firm, we are happy to help. You may also want help with other things such as phone answering and mail forwarding. It’s all part of our job of making it as easy as possible for you to set up a business in Australia.
Now you are ready to start business. Or are you?
Even though all the registrations you need to start business may be in place, thatdoes not mean your company is protected, or you personally.
Whether or not you use our services, the information on this website is designed to help people, including non-residents, by providing information about a range of issues which are relevant to registering a company and starting a business in Australia. For example:
Our guidelines on Protecting your business will help you avoid unnecessary loss and protect valuable assets.
Terms of business … a summary of what all businesses in Australia should know about business agreements, terms of trade and contract law.
The page on Negotiation will provide an insight into negotiation as it is practised in Australia.
The page on Shareholders’ agreements is important to avoid the problems which can occur in Australia if there is a misunderstanding or dispute between shareholders.