Your comprehensive guide to Australia business setup
For over a decade, Healy Consultants has efficiently and effectively assisted our local and international Clients with Australia company registration.
Advantages of Australia company registration
- An Australian company in the form of a limited liability company can be incorporated within one week, with a minimum of one shareholder and one director of any nationality. The minimum paid up share capital is US$1 and our Client will not need to travel to complete the company registration engagement;
- Australia company registration is simple and fast. It requires a minimum of one director and one shareholder. Company registration of a limited liability company (LLC) allows 100% foreign ownership and it has no minimum capital requirements;
- Company registration of an offshore company can conduct business throughout Australia without needing to register in individual states and territories;
- Company registration in Australia promotes free trade and has concluded trade agreements with multiple countries including New Zealand, Thailand, Singapore, and the US;
- Because of the excellent image provided by Australia company registration, Australia business setup is a suitable corporate vehicle to promote to Clients, suppliers, investors, and venture capitalists;
- An company formation of an Australian LLC enjoys the benefits of 44 international double taxation treaties, thus minimising withholding tax;
- Investors starting a Australia company setup can obtain government incentives, for example through Austrade, which is the Australian government’s trade and investment development agency. Austrade helps international companies source goods and services from Australia. Austrade also identifies potential Australia investment projects and strategic alliance partners for those intending to pursue company registration.
Disadvantages of Australia company formation
- In accordance with the Australia Corporations Act 2001, company registration requires at least one director who is ordinarily resident in Australia. As part of our company registration services, Healy Consultants can act as the nominee Australia-resident director following company formation;
- Domestic and international income suffers corporation tax at 30% for company formation. Furthermore, every company is required to submit annual audited financial statements and a corporate tax return to the Australian Taxation Office (ATO) following company registration. If the company’s sales revenue is less than AUD100,000, an audit exemption will be granted;
- A public register of shareholders and directors is publicly available for company formation. Although this limits privacy, this Australia company register enhances commercial transparency in Australia.
Different Australia entities
Comparison of different types of corporate structures for Australia company formation:
Limited liability company
This is the most common Australia business entity entity used for Australia company setup. It is also known as a limited liability proprietary company (LLC). As always, this Australia business entity is a separate legal entity or ‘person’. In particular, this Australia business entity is separate from its owners, shareholders and the persons who run it, the directors.
The establishment of an Australian branch may be preferable to incorporating a subsidiary if one of the objectives is to consolidate the financial results of the parent company.
An overseas company may pursue Australia company setup to operate as a branch, instead of as a subsidiary. The Australia company setup of a branch must formally establish a registered office in Australia and appoint a local resident agent. The branch must submit annual financial statements with ASIC.
Where a foreign company does not intend to carry on business in Australia it may seek to establish an Australian representative office. Such an office must however only engage in activities which will not amount to carrying on business, for example market research.
Companies limited by guarantee
Instead of shareholders and paid up share capital, this Australia company setup company comprises members who place a guarantee on the company which is only enforced on the winding up of the company. Often non-profit companies and charities use this method.
Unlimited liability companies (partnerships)
An Australian business entity whose members have no limit placed on their individual liability to contribute to the debts of the company. The sole advantage is this Australia business entity can distribute profits without restriction.
Company registration of a public company usually comprises more than 50 shareholders and a minimum of 3 directors, 2 of whom must ordinarily reside in Australia. This entity type is subject to more stringent regulatory provisions.
Private superannuation trustee company
The sole purpose of this Australia company setup company is to act as a trustee of a regulated superannuation fund within the meaning of s19 of the Superannuation Industry (Supervision) Act 1993.
This company is for charitable purposes only and its constitution will i) require the company to apply its income in promoting those purposes and ii) prohibits the company making distributions to its members and paying fees to its directors.
This Australia company setup entity is run by one person, all decisions are made by this person but staff can still be hired. Sole traders do not enjoy limited liability and personally liable for all debts of the business.
Accounting and tax considerations
- Australian companies are taxed at a flat company tax rate of 30% for both domestic and international income streams. In contrast, individuals are taxed at the normal marginal rates of tax – with the top tax rate being 46.5%;
- Audited financial statements and a corporate tax return must be submitted annually to the Australian Taxation Office following Australia business entity. It is usually possible to obtain an audit exemption if turnover is less than $100,000;
- Goods and Services Tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. Registration for GST is compulsory for companies who turn over more than $75,000 per annum. Once registered for GST, a company can charge GST on the products and services it provides and also claim back GST against expenses made for the business;
- Following Australia company setup, a company public officer must be appointed. A public officer is a company’s representative to the ATO and is responsible for the company complying with the Australia Tax Acts. The public officer must be an Australian resident and does not need to be a director of the company. Usually, our Clients appoint Healy Consultants as the public officer as part of the Australia company setup services;
- If fully franked dividends (that is, dividends derived from profits on which Australian corporate tax has been paid) are paid by an Australian subsidiary to its foreign parent, no dividend withholding tax is payable. To the extent that dividends are unfranked, dividend withholding tax of 30 per cent (or as reduced under the relevant double tax treaty) is payable on the gross unfranked amount;
- If an Australian company pays royalties to a foreign resident, the royalties will be subject to royalty withholding tax at the rate of 30 per cent (or as reduced under the relevant double tax treaty) and may give rise to transfer pricing issues;
- The Australian Tax Department has a system called Controlled Foreign Companies (CFC). A foreign company that is controlled by an Australian resident will be taxed as an Australian company. The system was put in place to prevent Australian residents accumulating wealth in offshore jurisdictions and not paying tax by holding it in companies or trusts. Unless the company is operated through a permanent establishment in the foreign country, the income is taxable for the Australian residents.
|1.||Average engagement costs||AU$6,500||AU$6,500||AU$6,500||AU$6,500|
The average Australia business setup engagement period is 4 weeks as outlined below:
During Australia company formation, Healy Consultants Compliance Department guides our Client through legal and tax obligations.
- Every Australian business setup must lodge an Annual Return in which a director or secretary of the company confirms relevant details for the Australia companies register including names and addresses of all directors, address of principal place of business and details of shareholders and their shareholdings;
- An Australia company secretary is not required for Australia company formation, however we recommend one be appointed to ensure compliance with corporation act;
- The identities of shareholders and directors are on the Australian business register (ABR), which enhances commercial transparency. A search of the Australia company registers is available on the Australian Business Register (ABR) website;
- When pursuing Australia business setup it’s important to find out what registrations and licences apply to your firm. This can be complex area; as local, state, territory and federal governments handle registration and licensing for various aspects of Australia company formation;
- For an Australian registered company to be listed on the national stock exchange, the ASX must be satisfied with i) the profit/asset test ii) the shareholders spread and iii) the prospectus memorandum;
- Click here for more information on Australia reporting obligations;
- The process of deregistering a company is dictated by the Government. This process will take a minimum of 6 months. Healy Consultants fee to project manage company de-registration is US$1450. During this 6 months period it is mandatory to maintain a resident company secretary and a legal registered office.
Australia employment visas
- Migration to Australia is a long, expensive and complicated process. Australian Authorities are strict and demanding regarding qualifications and wealth of the applicants. Healy Consultants fee for business visa for Australia amounts to AU$3,950 following Australia business setup;
- Business people planning to enter Australia for a short business visit can apply for the Business (Short Stay) visa which allows a stay of up to three months in Australia on each visit;
- Under the Business Skills program, business people can apply to come to Australia to i) start their own business, ii) manage a new or existing business, or iii) make investments in Australia without the need for a sponsor. Healy Consultants will be pleased to help our Clients to apply for Australian Business Skills visas to support Australia business setup. These visas are available to:
- business owners
- senior managers of businesses who meet relevant requirements
- senior executives of major businesses who meet relevant requirements
- successful business owners or investors wishing to invest funds in a government Investment for at least four years
- After a minimum of two years business visas holders may be eligible to apply for a permanent Australia visa.
Permanent work visa
|Sponsor||Yes, by an employer||Yes, by an employer||Yes, by invitation from state or territory government only||Yes, by invitation from state or territory government only||Yes, by invitation from state or territory government only|
|Visa duration||Up to four years||Permanent||Permanent||Permanent||Permanent|
|Processing time||2 months||2 months||9 months||9 months||10 months|
|Types of visas||Long Stay Temporary Business visa Subclass 457||Employer nomination scheme (ENS) visa Subclass 186 Direct Entry stream||Business Talent (Permanent) (subclass 132) visa||Business Talent (Permanent) (subclass 132) visa|
Business Innovation and Investment (Provisional) (subclass 188) visa
|Skilled Independent (subclass 189) visa|
|Healy Consultants fee (excluding the govt. Fee)||AU$ 1,950||AU$ 1,950||AU$ 1,950||AU$ 1,950||AU$ 1,950|
Australia Government fees (estimate)
|Minimum AU$ 1,050||Minimum AU$ 1,050||Minimum AU$ 4,065||Minimum AU$ 4,065||Minimum AU$ 7,065|
|Work entitlements||Must work in the nominated occupation for the sponsor||Must work full time for at least two years on 457 visa||Must be i) an owner or co-owner of a business or ii) a venture capitalist||Must be an owner or co-owner of a business||Can live and work permanently anywhere in Australia|
|Skills/qualification requirements||Applicant must have i) the skills to perform the occupation and ii) good English language skills||i) 3 years full time work experience and good English language skills|
or ii) If an individual has no employer, this individual can lodge an Expression of Interest with Australian Government
|i) Must have assets of AU$1.5 million and ii) have a business turnover of AU$3 million, or iii) have obtained at least AU$1 million in funding from an Australian venture capital firm||i) Establish a new or ii) develop an existing business in Australia and invest at least AU$5 million in Australia||i) have a suitable skills assessment for that occupation and ii) be less than 50 years old and iii) good English language skills|
|Family allowed||Dependants have full work/study rights||Dependants have full work/study rights||Dependants have full work/study rights||Dependants have full work/study rights||Certain family members can be included in the application|
E Visitor (subclass 651)
It is for people who want to visit Australia for:
- Tourism, such as holidays, recreation or seeing family or friends;
- Business purposes, such as attending a conference, negotiating or exploring business opportunities;
- There is no government fees for an eVisitor application;
- This Australia visa does not entitle to work in Australia.
Australia allows its citizens to hold dual nationality. If you are a non-citizen of Australia you can apply to become an Australian citizen following Australia business setup. You must meet several requirements, which generally are that, you:
- Are an Australian permanent resident and over 16 years of age;
- Have lived in Australia as a lawful resident for a total of four years;
- Are of good character and have a knowledge of basic English;
- Have an adequate knowledge of your responsibilities and privileges as a citizen;
- Are likely to reside in, or to maintain a close and continuing association with, Australia if granted citizenship.
Investor Retirement (Subclass 405)
For People from overseas who are 55 years or older, have no dependants (other than a partner who can be any age), are self supported, and are able to make a significant long term financial investment in Australia.
If you are granted this visa you can:
- Work in Australia for up to 40 hours per fortnight;
- Travel in and out of Australia any number of times as long as your visa is valid;
- Live in Australia for four years and have your partner accompany you to Australia;
- The minimum government fees for this visa will be AUD11,900 (except for New Zealand citizens).
- Applicant (or partner combined) must have access to a minimum net income of AUD65,000 (for example, pension rights);
- You must have evidence that you, and your partner, hold an adequate health insurance package for the period of your intended stay in Australia;
- Applicant must have assets valued at least AUD750, 000. These assets will enable him/her (or partner) to meet initial settlement and ongoing costs of living in Australia.
Corporate banking options
Success tips when doing business in Australia
- Australians value an egalitarian society. Effective management styles are those that treat everyone equally regardless of their position in the company hierarchy;
- Despite the remoteness of Australia, conducting international business is common for Australian companies. Healy Consultants recommends Clients consistently use and sign contracts of service when doing business in Australia to provide protection if disputes arise;
- Government agencies play an important role in Australia company formation, like all countries. All businesses deal with government agencies on a regular basis. This is where foreigners pursuing company registration should exercise restraint and be patient as much as possible as government authorities would always have the final say in any matter;
- Australians are relaxed persons until it comes to business. Then they become mistrustful.
Did you know about Australia?
- Australia is the world’s sixth largest country, a vast continent covering a distance of approximately 3,700 kilometers from its most northerly point to its most southerly point and is almost 4,000 kilometers wide from east to west. Australia is comprised of six states and two territories. China is Australia’s largest trading partner;
- It is not necessary to give your company a name. Your Australia company registration entity name can simply be its Australian company number;
- The ASX was formed in 1987 through the amalgamation of six independent stock exchanges and became a listed company on 13 October 1998. On 25 July 2006, the Australian Stock Exchange Limited merged with Sydney Futures Exchange (SFE) Corporation Limited, making the combined entity the 9th largest listed exchange in the world. The exchange is an ideal venue for trading both Australian securities and foreign issues, and is one of the stock exchanges considered by multinational firms looking to conduct IPOs;
- Australia is well ranked as the 9th least corrupt country in the world in the 2013 Corruption Perceptions Index by Transparency International;
- According to the 2012 Quality of Living Survey by Mercer Human Resources, Australia offers a high standard of living, with 3 cities in the top 5 within Asia Pacific;
- As evidence of this, in the World Bank’s Doing Business 2013 Survey, Australia ranks 11th. For the key factor of starting a business, Australia is ranked as the 4th easiest jurisdiction;
- Australia is also ranked positively as the 20th most competitive country for business, in the World Economic Forum’s Global Competitiveness Report 2011-2012, taking into account factors such as infrastructure, macroeconomic stability, health and education, labour market efficiency, technological readiness and innovation;
- Australia benefits from a relatively high GDP, a reputable education system and high life expectancy rates. As support for this, Australia is currently ranked as having the second highest Human Development Index (HDI) in the world. the HDI is an annual report undertaken by the United Nations.
- Australia company set up
- Australia corporate bank account
- Tax planning in Australia
- Australia corporate services
- Investing in Australia
- Australia limited liability company
- Migration to Australia
- Australia resident director
- Australia FAQs
- Australia Tax Authority
- Australia Company Registrar
- Central Bank of Australia
- Australia Stock Exchange
- Investment Authority
- Chamber of Commerce
- Sydney airport
- Visiting Australia
- Australia Deloitte – Economic Outlook of Australia
- Australia Deloitte – Taxation and Investment Guides
- Australia Deloitte – Australia Highlights 2013
- Australia KPMG – Doing Business in Australia
- Australia PwC – Doing Business in Australia
- 2013-14 Worldwide Corporate Tax Guide – Australia
- PWC – Australia Tax Summary