Inbound Business in Australia

Australia has been long seen as a safe, regulated place for foreign investment or business because of its stability, economic strength and laws that protect both consumers and businesses alike making it predictable and reliable.

Australia uses a complex regulatory framework to govern business and consumer behaviour and in order to establish or conduct a business here it is important to understand this framework.

Setting up in Australia

Foreign business and investors should be aware of the laws, the obligations and the reporting frameworks before establishment as often the costs of fine tuning structures at a later date could be a costly exercise. Having the right advice at the right time is essential for getting on with the job without unnecessary risk.

Business transacting or investing in Australia will have reporting and taxing obligations with both Federal and State government regulated offices.

Our Federal government has rights over taxation and also the regulation of incorporated or registered businesses. Our state governments have taxation and duty jurisdiction over employee related matters and duties on certain dutiable transactions including contract, property, agreements, deeds and asset transfer. They also regulate businesses in terms of registration of names and industrial matters.

Two tier tax system

Australia has a two tier taxation system regulated by the Australian Taxation Office and has many bilateral trading and taxation agreements with countries having comparable taxation systems. The effect of which is to govern taxation jurisdiction around income sourcing and residency concepts with some elimination of the impact of double taxation.  Incorporated entities and public trading or investment structures are regulated by the Australian Securities and Investment Commission (ASIC).

The typical taxation and regulatory matters experienced by foreign business and investors in Australia include:

The Federal Government will also be introducing the taxation of carbon emissions and mining.

Legal structure and commercial nature

The most important elements in considering investment or conduct of business in Australia include determining the legal structure and commercial nature of the activity contemplated. There are many different forms in which this may occur depending on the needs of the incoming owner and the respective activity being undertaken.  The structure will determine what taxation elements are applicable, what reporting obligations exist and how the business may be conducted.

The average small business would expect as a minimum to pay income tax, GST, withholding tax, payroll tax and superannuation on behalf of employees. SME businesses and public company subsidiaries will typically also expect to have audit and reporting obligations with ASIC.