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How to set up a business entity in Australia
To incorporate in Australia, start by choosing the right business structure and hiring knowledgeable liaisons.
Australia is considered a safe, low-risk environment in which to do business, offering strong economic and cultural ties to the growing Asia-Pacific region. That’s just a few of the reasons it may be a smart move to do business in the country.
As it stands, creating a business in Australia can be tricky. But with the right knowledge and expert help, you can incorporate to legally operate in the 12th-largest economy in the world.
What's in this guide?
- What kind of entity makes sense?
- Should I hire a professional?
- What kind of documentation will I need?
- Where do I file my information?
- Other factors to consider
- International billing and payments
- Use a money transfer to manage your international business payments
- Bottom line
- Frequently asked questions
What kind of entity makes sense?
There are four common entities for foreign investors who want to do business in Australia: sole trader, partnership, company or trust.
This is the most straightforward way to set up a business in Australia, with fewer startup costs, less paperwork and minimal working capital required.
But this type of entity comes with unlimited liability — which means that should you find yourself in debt, potential creditors have the right to claim against your personal and business assets.
For this entity, you simply create a contract between one or more partners to conduct business. In a general partnership, partners manage the business together and share legal liability. In a limited partnership, general partners manage the company, while liability and other contributions are limited for other partners.
Like a sole proprietorship, in a partnership you are ultimately responsible for business decisions. Which means that if a contract is broken, you could be financially liable.
Unlike a sole proprietorship or a partnership, a corporation is not tied to specific individual owners. It’s a limited liability entity, whereby the legal structure of your business is a separate entity and you assume no risk of personal liability for debts or other obligations.
Because corporations are complex and closely regulated, they are more expensive to set up.
A trust obligates a trustee to hold property or assets (such as business assets) for the benefit of others, known as beneficiaries. This trustee is responsible for the trust’s operations, but you can set up another company as a trustee, providing some asset protection.
Should I hire a professional?
It’s an excellent idea to hire a liaison to navigate tricky incorporation waters. A liaison can interact with officials on your behalf, and they’ll tell you the appropriate places to register your business entity.
What kind of documentation will I need?
Here are a few documents you’ll need to register your business:
- Certificates of incorporation
- Bank reference letters
- Passport copies
- Resume and photo
- Description of the scope of your business
- Lease contracts of Australian office address
- Business license
You may need different documentation depending on where you’re registering and which officials you meet with. Consider working with a company that helps foreign investors create businesses in Australia.
Where do I file my information?
Australia is the rare country that makes it easy for you to register your business online, allowing you to save time when registering for your business name, Australian Business Number and government taxation.
How to send money to Australia
Other factors to consider
- Naming your business. You’ll need to cross-check your business name against a database of existing companies to ensure that yours is original.
International billing and payments
Your new business will require you to make and receive international payments, which means you’ll make transactions between currencies and across borders.
You can safely and affordably manage your business payments — with lower fees and stronger exchange rates — by comparing the services of a money transfer specialist.
Use a money transfer to manage your international business payments
It’s important to choose the right business entity to operate in Australia. Consider working with an organization that specializes in helping foreign businesses incorporate in the country — this will streamline your progress and help you avoid pitfalls along the way.
Frequently asked questions
Do I need a business plan?
It’s a good idea to have a business plan. It’s not only a document against which you can measure your success, but merely preparing one will help you focus on how you’ll realistically operate your business.
How can I finance my business?
Whether you’re looking to get off the ground, expand, or meet a temporary business shortfall, a business loan could help ensure your business success.
What’s the best way to transfer money to Australia?
Use an online transfer provider — it’s likely cheaper and more convenient than using your bank. Compare multiple providers and find the one that offers the best fee structure for your transfer amount.
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