Useful information on how to start a business in Australia.
Sun, sand and surf… the free spirited lifestyle Down Under is certainly a huge draw for the thousands who choose to open a company in Australia each year.
But did you know that there are many other reasons why Australia is considered a top location for starting a business?
In fact, Australia ranked 13th out of 189 economies in the 2016 World Bank’s Doing Business Report, and it’s easy to see why.
Advantages and disadvantages of setting up a company in Australia
Here are some of the key factors you should consider when deciding whether to open a company in Australia:
1. Potential for growth
With a population of 23.1 million, Australia is the 12th largest economy in the world. Its uninterrupted economic growth over the past 25 years, coupled with its political stability, makes it a low-risk environment in which to carry out business.
The Australian Trade and Investment Commission expects to see significant growth in the sectors of tourism, education, mining, agribusiness and wealth management in future.
2. An Educated Workforce
Australia boasts a diverse and highly skilled workforce, so there is no shortage of talent on hand to help get your company off the ground.
On the flip side, the high minimum wage ($17.29 per hour) means that a company must be financially prepared to meet the needs and salary expectations of its employees.
The Australian corporate tax rate is 28.5% (or 30% for businesses with an annual turnover of over $2 million). This may seem high when compared to that of some other English-speaking countries such as Ireland (12.5%) or the UK (20%), but it compares quite favourably to that of Canada (15% – 26% federal + 11-16% provincial) and the US (35% federal + 0-12% state taxes).
4. Border Controls.
One potential hindrance to companies is the strict and slow-moving customs controls in Australia, so it is essential that you are aware of the regulations appropriate to your industry and have the related paperwork in order before importing or exporting goods. Further information on customs requirements can be obtained from the Department of Immigration and Border Protection.
If you’re convinced that Australia may the right place to open your business, then keep reading!
How to Set Up a Business in Australia
Everyone hates to get bogged down in paperwork and unnecessary bureaucracy, but don’t worry! The process required to open a company in Australia is relatively quick and easy – just follow the steps outlined below.
1. Apply for an Australian Company Number (ACN):
Fill out and summit the Application for Registration as an Australian Company (Form 201) to the Australian Securities and Investments Commission (ASIC) with the appropriate fee. Once your company is registered, you will then receive an ACN number and a Certificate of Registration.
2. Apply for an Australian Business Number (ABN):
The ABN is different from the ACN in that is necessary for all those carrying out business in Australia (not just companies). It is needed for all dealings with the tax office. You can apply for the ABN for free online at the Australian Business Register.
3. Register for Goods and Services Tax (GST) in Australia:
While seeking to register for VAT in Australia, you may feel confused when you come across something called the Goods and Services tax (GST).
GST is a form of VAT, but while some countries charge VAT only on physical goods, in Australia, 10% GST must be applied to most (you guessed it!) goods and services sold by your company. If your annual turnover is more than $75,000 dollars, or $150,000 for a non-profit organisation, you must sign up for GST.
4. Set Up Workers Compensation Insurance:
In Australia, workers compensation insurance to protect employees (and your business) in the event of an injury or illness is mandatory for employers. This can be set up through major insurance companies. Each Australian territory has its own regulatory body governing Workers Compensation Insurance, a list of which can be found here.
In short, Australia is an outstanding country in which to start a business. Whether you ultimately decide to locate your business there or elsewhere, we wish you every success!