As the world becomes increasingly globalized and more and more businesses are choosing to expand into new territories, Australia is becoming a firm favorite thanks to its unbeatable economic performance and stability. Indeed, with an average GDP growth forecast of around 2.0% per year and a GDP measuring in at US$1.323 trillion according to latest figures, the country is one to be reckoned with and makes sound financial sense to foreign investors.
Trade between Australia and Latin America is another reason why entrepreneurs are flocking to the country, with free trade agreements allowing access to many of the world’s most exclusive and lucrative economies, including Europe, the United Kingdom, and China.
In order to maximize your chances of success in the country, it is important to incorporate a company in Australia as a method to expand your commercial presence to the region. Below, we’ve put together a step-by-step guide of setting up a business in Australia and share some tips on ensuring you remain compliant.
Once you have consulted with your team and shareholders and have made the decision to set up a business in Australia, the next step is to decide on the most appropriate corporate structure. There are several key Australian business structures to consider, including a sole trader, a partnership, a company, and a trust, and each offers its own unique benefits, and by reviewing the operations and logistics of each, you’ll be able to make an informed decision.
Once you have decided on your corporate structure, you should choose a preferred name for your company, and sign a board resolution to authorize incorporation in the country, and ask for directors and shareholders of your company to fill out and sign company consent forms.
Appointing a Public Officer (PO)
When starting a business in Australia, it is important you comply with local legislation. That includes appointing a Public Officer (PO) for your business, who will serve as the representative of your company to the Australian Taxation Office. Your PO will be responsible for maintaining accounting and tax records for your firm (which must be accurate and complete), submitting monthly and quarterly government reporting to the Australian Taxation Office and submitting your company’s financial statements and corporation tax returns to the government. Your PO does not necessarily have to be an accountant, but they will become the go-to contact for your firm, so they must have a good understanding of the way in which your company is run.
Appointing a Company Secretary
As well as a Public Officer, you’ll need to appoint a company secretary for your business, who will be resident in Australia. Under the Corporations Act 2001, all public companies in the country must appoint a secretary. They must be a natural person, and give their signed consent. The good news is that a director can also become the company secretary, or you can outsource the company secretary role to remain complaint if you don’t live in the country.
Registering a Local Office
The Australia Companies Act 2001 states that all businesses must file an Australian address with the Company Register, where all communications and notices will be sent. If you do not have an address in the country, then this can be outsourced in order to remain compliant.
Incorporating the Business
- Reserve a name: Check the availability of your name with the Australian Business Register and then complete a Form 401 to reserve the name. It is recommended that you consider several names to ensure you can incorporate without delay – a foreign business may choose to register with ‘Australia’ at the end of their name for clarity. According to Luisa Ryan, Director of the Business Register Unit at the ABS, there are more than 2.24 million actively trading firms in the country, so your first choice name may not always be available, and the name you use in other territories may be taken.
- Register a company: Submit Form 201 to the Australian Securities and Investment Commission to begin incorporation. From there, you’ll receive documentation that will certify your incorporation, and you’ll be given an Australian Business Number (ABN). Working with an incorporation specialist will ensure your paperwork is filled out to the necessary standard to avoid delays/rejections. Getting it right the first time is important.
- Register for Tax: Register your company with the Australian Tax Office using your ABN or Tax Filing Number so that you can pay taxes. Businesses turning over AU$75,000 a year should also register for Goods and Services Tax and will be required to submit Goods and Services Tax returns every three months.
- Open a business bank account: The next step is to open a corporate bank account for your business. You will need to provide company certificates, as well as passports and proof of address for all of your company directors and shareholders – enter into a meeting prepared and with the right documentation, and you’ll speed up the process.
- Submit your returns: Businesses are required to submit annual tax returns on the anniversary of their incorporation. Working with an accountant and local taxation specialist is key to ensure you’re paying the necessary taxes and remain compliant.
Let Biz Latin Hub Australia Help
At Biz Latin Hub, we strongly believe that the future of entrepreneurship lies in entering into new markets and taking your business in new directions. Indeed, if you’re operating only in one country, then you’ll likely struggle to enjoy continued levels of growth, and your profits may plateau or even fall over time. By spreading out your business and sharing your products and services with the world, you can diversify your portfolio and add new revenue streams to your firm, ensuring its long-term viability and protecting the future of your assets.
Whether you are looking for assistance with commercial representation, company formation, visa processing, recruitment, legal services or accounting and taxation, our Sydney-based experts are on hand to help. Email [email protected] today to see how we can support you.