When expanding into a new market such as Australia, there are lots of things that you need to take into consideration. You need to market your business and find the right employees to power your growth. Also, you must choose the right company structure so that you can operate freely and without government restriction.
All necessary steps when incorporating in a new market must be accompanied by sound accounting practices. This includes complying with tax or payroll regulations or providing an overview of your expenditure. These services can be outsourced to an external party. Learn why Australia is an ideal country to use external accounting services, and why businesses are in safe hands with Australia’s expert finance sector.
The first reason for using accounting services in Australia is a universal one. In any country, companies must meet legal compliance requirements regarding their accounting. This is no different in Australia.
Australia applies a unique tax system. Resident businesses are taxed on their worldwide income. That’s everything from the money they make in Australia, through to revenue from trading or exporting overseas. Non-resident companies, on the other hand, pay tax on the income they make in Australia. So, as an entrepreneur looking to set up a business on a shoestring budget, consider opening a branch office or relying on a professional employer organization to do business in the country. This way you can save on costs and avoid overpaying on tax.
Moreover, Australia identifies three main corporate taxes:
- Corporate tax. For businesses with an annual turnover of less than AU$50 million, corporate tax is 27.5%.
- Goods and Services tax. Measured at 10%, companies with a GST turnover must register with their local authority.
- Capital Gains tax. This tax currently stands at 30% for residents and 27.5% for non-residents.
Finance sector home to world-class expertise
Australia’s financial services sector is the largest contributor to the national economy. It contributed around $140 billion to GDP over the last year. It has been a major driver of economic growth. Moreover, with 450,000 people employed here, it will continue to be a core sector of Australia’s economy into the future.
Australia has a sophisticated, competitive, and profitable financial sector and a strong regulatory system. The four major banks are among the world’s largest banks by market capitalization. Furthermore, all rank in the top 25 globally for the safest banks. They are also some of the most profitable in the world.
The supremacy of Australian banks translates directly to the high level of local financial expertise. This expertise presents significant value to companies acquiring accounting services. The competitiveness of Australia compared to the rest of the world proves its world-class expertise. Moreover, using accounting services in this country will mean your accounting system adheres to international standards. These international standards will improve the professionalism of your company. Moreover, it will be easier to comply internationally when expanding to other countries.
The Australian government has shown its interest in developing its financial sector further. Knowing it is one of the country’s main sectors and is internationally competitive, authorities are constantly improving. An example of this is the well-developed and diversified financial sector.
Australia is home to the fourth‑largest pool of investment fund assets in the world and the largest in Asia. The World Economic Forum Financial Development Index of 2012 rated Australia as one of the world’s best performing financial centers. This is partly due to the strength of financial intermediation and Australia’s financial stability. The country has favorable economic fundamentals with annual economic growth.
The reason for this growth is the before-mentioned governmental developments. A catalyst for these developments is the Financial System Inquiry. The Financial System Inquiry establishes a direction for the future of Australia’s financial system. The Inquiry lays out a ‘blueprint’ for the financial system over the next decade. Previous inquiries have led to major financial system reforms. These reforms have led to, for example, a floating Australian dollar.
One of the main aspects of the recent inquiry will be Australia’s Fintech sector. Fintech is revolved around technological change surrounding finance. Australia is one of the world’s frontrunners in this sector. Supported by governmental incentives the financial sector has become an Australian powerhouse. Using accounting service in this country thus also means benefitting from their expertise in regard to Fintech. This will allow your company to engage in the future of the financial world.
Australian compliance will allow you to adhere to internationally accepted requirements. This is because the Australian government maintains a stable financial framework. The accounting principles that are accepted are based on international principles.
The AASB is an agency of the Australian Government. AASB standards are known as Australian Accounting Standards and include Australian equivalents to International Financial Reporting Standards (IFRS). When it first began adopting IFRS as Australian Accounting Standards, the AASB made some modifications to IFRS. The included removing some options and adding some disclosures. In 2007, the AASB modified Australian Accounting Standards so that their requirements are identical to IFRS as issued by the IASB for for-profit entities. Some additional disclosures were retained and some non-IFRS compliant requirements apply for not-for-profit and public sector entities.
Australia has adopted these accounting principles and they have been the same for a decade now. Bar minor legislative changes the Australian financial framework has shown stability throughout the years. This allows foreign businesses to feel secure, confident and transparent.
Work with Biz Latin Hub
Using expert accounting services in Australia will allow your business to thrive and relieve you of stress during your expansion. In order to assure you to follow accounting compliance in Australia, a local partner might be of help. Biz Latin Hub is an expert in connecting businesses and supporting startups in the region.
Our recently-received award for Business Excellence by the Australian-Latin America Business Council demonstrates the support we receive from Australian institutions. Find out more about how we can transform the fortunes of your business. Contact our Managing Director and Australia business expert Craig Dempsey on [email protected] today.