As a foreign investor, Australia should be at the top of your list when it comes to international expansion. Not only is it home to a thriving economy and growing industries like FinTech, tourism, agriculture, and services, but it boasts vast natural resources that allow brands to manufacture high-quality goods and services and export them to territories around the world.
However, entering into the market and finding your feet can take time, so below, we have put together ten unique challenges you will likely face when doing business in Australia.
Perhaps one of the biggest challenges you’ll likely face when doing business in Australia is getting to grips with the Australian business culture. Australians are known for their modesty, hardworking attitudes and slow decision making, and their networking is relaxed and often informal. Learn to make the jump from a corporate approach to something more low-key.
Whether you’re in the United States, the United Kingdom or mainland Europe, Australia is a long way away from home. The good news is that Australians have a similar personality type and humor to Brits, so you’ll be able to make new friends and business partners with ease, but being away from your home comforts may be tough. Rely on Skype and FaceTime for keeping up with loved ones at home, and schedule visits so you’re not in Australia alone.
There are four key company types in Australia – you can be a sole trader, form a partnership, launch a company or open a trust. Each offers a unique set of rules, allowances, tax setups and more, so do your research before incorporating into the company. Should you change your mind and want to switch from a company to a partnership, for example, you can do this with ease, but getting it right the first time will save you time, money and headaches.
Whenever you do business in a new country, you have to get to grips with a new set of tax laws and rules. Of course, hiring a local accountant or working with a back office support company is your best bet, so do your research and take your time. Once you set up your first Australian business, you’ll need to consider the superannuation levy, which requires you to pay towards your employees’ retirement, as well as corporate income tax, which is currently at 30%. Make sure you register at the Australian Tax office when you incorporate a business and don’t put off taxes for another day – the sooner you get started, the easier it’ll be to pay.
When entering the country to establish a new business, there are many things that you need to take into account – and one of the biggest is applying for and securing a visa. There are a great number of visa options to consider, including the Visitor Visa, the Business Innovation and Investment visa, and the Business Talent Visa – make sure you select the right one, fill in the necessary paperwork and be patient. Visas take months to process, so the sooner you get started and submit an application, the sooner you’ll be able to do business in Australia. If you’re concerned that your application is going to be rejected, work with visa processing specialists, who will be able to guide you on the right paperwork and application techniques.
Foreign Exchange Rates
Something else to take into account when doing business in Australia is foreign exchange rates, particularly if you want to send the majority of your earnings back to your home country. Ensure that you have the right financial backing, check exchange rates regularly, and open an Australian bank account to cushion the blow of any major exchange rate difficulties. If a currency is performing poorly against the Australian Dollar, for example, then you could hold your funds in Australia until the dust has settled before you transfer.
The Australian Judicial System
It’s also important that you understand the country’s judicial system, as you may need to use it if you have to enforce a contract with a supplier or client. Australia boasts a modern and streamlined system that is straightforward for most, but it pays to do some reading and understand your rights as an entrepreneur, especially if you plan to work under contracts.
Unless you have hundreds of thousands of dollars at hand, the chances are that you’ll need a small business loan to pay for equipment, marketing, or growth. As a foreign entrepreneur it can be tough to persuade banks or investment groups to have faith in your venture – after all, you shouldn’t enter the country without necessary capital – so shop around for loans and the best deals if you’re planning to access capital further down the line and don’t settle for the first offer. Australia’s thriving FinTech scene should offer an abundance of opportunities.
Importing and Exporting
One of the reasons so many entrepreneurs choose to incorporate a business in Australia is that the country is home to so many Free Trade Agreements with nations around the world. If you want to trade with other countries, however, you must first fill in necessary documentation outlined by the Australian government and depending on your niche and the types of goods you’d like to import or export, this can take weeks or months to reach approval.
Before you can access utilities for business purposes, you’ll need to go through a set of procedures when you register your business property, such as having your wiring inspected by a local authority. Allow a couple of months to have your preparation work completed – planning ahead is critical if you want to open up shop and get started right away.
If you want to build a physical office for your business in Australia or add to an existing office or manufacturing plant, you will need to apply for Australian construction permits once you have established your business in the country. There are eleven procedures that you must complete before you can be granted a construction permit, including inspections from local authorities, so allow for plenty of time before you start construction work to avoid delays.
Whilst Australia is more accessible than ever before for investors, it makes sense to do your research and be ready for challenges you’ll likely face. All good entrepreneurs know that it pays to be prepared – the advice we have offered in this piece will serve as a starting point.
When incorporating a business in Australia, it is recommended that you hire the services of a professional support company, such as Biz Latin Hub Australia. Reach out to our Australian founder and CEO Craig Dempsey at [email protected] for more information.