Australia is considered one of the most highly developed nations in the world, according to the Human Development Index, and thanks to its well-educated population and burgeoning middle class, it’s a territory that more and more businesses are considering. If you’re thinking about expanding your business globally, then the nation should certainly be on your list, as it is known for its impressive economic growth, high standards of living and demand for quality produce.
Here, we offer an overview of the country’s thriving economy and share advice and information on how to start a business in Australia, whether you’re an entrepreneur looking to expand or a local businessperson ready to take on the challenge of starting up their own Aussie company.
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Starting a Business in Australia – Overview of Australia’s economy
Unlike some of the world’s biggest players, such as the United States, the United Kingdom, and China, Australia has unparalleled levels of economic growth. In fact, the country’s economy has grown every year for the past 26 years and shows no sign of slowing down. Managing to avoid the recession ten years ago, the country is now home to the world’s 13th largest economy, in part thanks to business and government spending, whilst large-scale exports of its agricultural produce and aggressive financial sector have allowed Australia to remain buoyant for decades.
The country saw inflation levels rise to 1.9% in 2017, but real-time wages also grew by 2.1%, which is rare in the Western world, however, a high level of household debt (which currently stands at around 100% of GDP) has been criticized by the IMF. Unemployment is relatively low in the country at just 5.6%, and the rate continues to fall year on year, but the country’s aging population some climate change issues (like the Great Coral Reef, which has lost 20% of its color due to bleaching) which must be addressed, and those challenges will no doubt be costly.
Nevertheless, if you’re thinking about starting a new business venture, then Australia remains a popular choice, particularly for investors from LATAM markets, thanks to generous trade agreements, like the newly-forged relationship between Peru and Australia. In addition, Australia is one of the world’s best-connected countries in terms of trade, with close relationships with Asia and the Middle East, allowing for significant trade deals and exports.
Incorporating your business
Incorporating a business in Australia is straightforward, and requires you to register as a sole trader, a partnership, a company or a trust, depending on the size, scope, and nature of your operations. The good news is that business structures can be changed, so you’re not tied into one – businesses are free to change their business structure as their organization develops.
Restrictions
If you want to form a business in Australia, then you’ll need to apply for a VISA, either a Business Innovation and Investment visa or a Business Talent visa if you already own a business overseas and have an annual business turnover of at least AU$3 million. You can apply for these VISAs through the Department of Home Affairs’ SkillSelect website, or use an agent to apply on your behalf to increase your chances of acceptance. Once you have been approved, you will be able to enjoy the same benefits as Australian nationals when launching a business within the territory, though you may be required to pay additional tax if you’re planning to take an income out of the country. Do your research and work with an accountant to be sure.
Minimum Capital
Whilst there is no minimum capital requirement to register a business in Australia, other than a couple of hundred dollars to register your business with the ASIC, it pays to have the funds to hire staff and market your business from day one. According to Payscale, the average salary for a business development manager in Australia is around A$80,000 per year, but you may choose to hire an expert remotely, or even consider working with a Professional Employer Organisation (PEO) to employ talent on behalf without the upfront costs of recruitment and human resources.
Bank Accounts
A business bank account is essential for accounting and tax purposes, although sole traders may choose to bank from their personal account instead. In order to open an account, your business must be registered in Australia and hold an ABN/ACN registration number, and you will need to visit a banking branch with Proof of ID (such as a passport, photo ID card, driving license, etc), a certificate of incorporation or business registration, and an ABN/ACN registered office address. You do not need to be a resident of Australia to open an account, or even be in Australia to open a bank account, although the company must be registered in the country.
The four most popular banks within the country are the National Australian Bank, the Commonwealth Bank, the ANZ Bank, and Westpac. We recommend comparing each to see which offers the lowest banking fees, charges and interest rates before getting started.
Marketing your products and services
Once you have set up your business, you’ll need to think about ways in which you can find new customers and boost your presence within the territory. Networking in the country differs to that in other nations, as Australians are known for their laid-back attitudes and relaxed mentalities. It is important to get to grips with the cultural differences between your nation and Australia so that you can forge meaningful business relationships and sell more of your products or services.
Foreign investment in Australia has exploded in recent years, and according to the Australian Bureau of Statistics, Australia’s foreign direct investment (FDI) stock reached A$849 billion last year. As more businesses from the United States, Asia, and Europe enter the market, we will no doubt see Australia become a more competitive nation – so marketing products and services to appeal to as wide an audience as possible is important. Hiring a professional who understands the market is key to your business development, so consider incorporating your company as soon as possible, and get to work on growing your brand awareness and selling your products.
The next steps
Australia is one of the most exciting territories to form a company, and its ever-growing economy is attractive to many entrepreneurs. From its thriving agricultural sector to growing FinTech market, expanding into Australia unlocks real opportunities for businesses just like your own.
If you have any questions about expanding into Australia, or would like assistance in doing so, feel free to contact us now or visit our site to learn about our range of services, including company formation, accounting, and visa processing.