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Expats Owning and Operating a Business in Australia

Submitted: August 2013

If you are an expat wishing to start your own business in Australia, the first step is to ensure you have the legal right to live and work in Australia. For most expats, this will mean applying for a Business Innovation and Investment visa. This type of visa has three different streams:

  • the Business Innovation stream for those who wish to start their own business or operate an existing business in Australia
  • the Investor stream for those who wish to invest at least A$1.5million in Australia and remain involved in the business after the initial investment, and
  • the Significant Investor stream for those who wish to invest over A$5million in Australia and remain involved in the business after the initial investment.

To apply, you will first need to express your interest in obtaining a visa via the Skill Select Website. The relevant state or territory will review your expression of interest, then decide whether to invite you to apply for a visa. If invited, you will have to file an application through Skill Select, submit detailed supporting documents, and pay a fee which ranges between A$1,895 and A$4,065, depending on the stream you apply for. For further rules and regulations see the Department of Immigration and Citizenship Website. For a detailed list of fees, see Visa Pricing Table. To read more on immigration matters in general, see Immigration.


Business Plan

The Australian market is very competitive, therefore it is vital to have a good business plan before starting your own business. First of all, you should have a clear idea of what you wish to do and how feasible this idea is. Make sure to research which businesses already operate in your field and determine your potential customers, partners and competition. Furthermore, take ample time to consider your best financing options. Based on your research you can then develop a proper business plan which sets out your business objectives, target market, commercial strategies, potential obstacles and financial projections. For free business plan templates, see  Free Planning Templates on the Government’s Business portal.

Another good idea is to consult one of Australia’s Business Enterprise Centres (BEC).  BECs can give you free advice on how to set up a new business in Australia and guide you through the start-up process. For a list of other contact points in specific states and territories see the Australian Government’s Business Portal on Advice and Opportunities and for further guidelines on setting up businesses see How to Start a Business.


Legal Structure, Registration and Obligations

Another important step is to decide which legal structure is best suited for your business. The legal structure will determine the nature of your legal, financial and tax obligations. The two most common business types in Australia are ‘Sole Trader’ and ‘Company’.

Sole Trader

The advantage of setting up your business as ‘Sole Trader’ is that it is very inexpensive to set up and operate. You will have full ownership and control over the business and all profits after taxes will remain yours. At the same time, however, you will be personally liable for any losses your business might make.

Sole traders in Australia are taxed as individuals. This means that you will be required to report your business income on your personal income tax return, along with any other income you might earn, such as salary, interests, dividends, etc.  You will also have to make your own superannuation arrangements but may be able to claim a deduction for personal super contributions.

To start a ‘Sole Trader’ business, you must register for the Australian Business Number (ABN) at:  https://www.abr.gov.au/. The ABN number is a 11-digit identification number which you must include on official business documents and invoices. Additionally, you might also have to register for Goods and Services Tax (GST) if your annual turnover excluding GST exceeds A$75,000. Finally, note that Australian sole traders may choose to trade under their own personal name or register a business name.

Company

A ‘Company’ is an independent legal subject which you set up to run your business. Typically, it is run by a director and has members who have shares in the company. The main advantage of a company is that its finances are separate from your personal finances and you are therefore not personally liable for any losses incurred. On the other hand, it is more expensive to set up and maintain a company than a ‘Sole Trader’ business.

Companies have to declare their annual income and pay income tax at a flat rate of 30% of the taxable income. Companies must also be registered for GST if their turnover exceeds the annual threshold of A$75,000. Finally, your company must pay super contributions for all employees of the company. 

To start a company you will have to register with the Australian Securities and Investments Commission (ASIC) at https://www.asic.gov.au/ and pay the applicable registration fee, ranging between A$366 and A$444, depending on company type. You will also have to select a company name which is not yet in use by any other business and does not include any restricted words. Upon registration, your company will be assigned an Australian Company Number (ACN), a unique nine-digit number which must be displayed on all invoices and business documents. For more information on company registration, see ASIC’s Website on Starting a Company.

Other Business Structures

In addition to Sole Traders and Companies, you can also opt for Partnerships or Trusts. To find out more about these two forms, see the Australian Taxation Office (ATO) Website on Starting and Running your own Small Business.


Employing Staff

As employer, you will have to ensure that your business complies with Australian labour regulations. You should familiarise yourself with different types of contracts, minimum wage requirements, equal opportunities policies, work permits and recruitment options. The Australian Government provides extensive information online at Employing People.
See also Work Culture and Labour Market.


Further Information

The Australian Government operates a hotline for questions related to setting up and operating businesses in Australia. The Small Business Support Line can be reached Monday to Friday from 8am to 8pm at 1800 777 275. Information is also available online at: https://www.business.gov.au/.

 

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