Your Complete Guide to Business Registration in Australia
Australia is one of the world’s largest economies, and a stable one at that. Before the COVID-19 pandemic in 2020, it was the 14th largest economy in the globe1. The sovereign country, the biggest by area in Oceania, is well-regulated and provides a safe environment for all kinds of businesses to grow. No matter whether you’re starting a new business or exploring expansion into the Asia-Pacific Region, Australia is a compelling place to do it. In this guide, we’ll explain why the Land Down Under is a good country for doing business and explain how to register a business and set up a company in Australia and the associated fees.
Why open a company in Australia?
With high levels of economic freedom, Australia attracts many start-ups and foreign investors. Entrepreneurs wanting to set up a business in Australia can benefit from the following:
Stable economy
Australia has an open market which is highly competitive on the international level. This is largely supported by its 16 free trade agreements with countries including Malaysia, China, Korea, the United States and India. Thanks to this plentiful free-market activity and well-regulated business framework, the economy is very stable. The country’s GDP has steadily grown over the past two decades.
Encourages start-ups
Australia ranks 25th out of 132 on the Global Innovation Index, which ranks economies according to their ability to innovate. The Australian government welcomes foreign investment and start-ups using grants and incentives such as:
● Entrepreneur’s Programme: Start-ups can access experts who will help them develop commercialisation strategies, business advisers or innovation facilitators, each coming with a different grant amount.
● Research and Development tax incentive: Companies doing research and development in the medical and biotech industries can get cash back on their R&D expenditures and income tax reductions.
● Export Market Development Grant: Start-ups promoting exports that Australia can make to other countries can get up to half of their expenses reimbursed.
Plentiful natural resources
The sixth-largest nation in the world stretching across 7.6 million sq. km, Australia is a leading producer of opal, coal and aluminium ore. These minerals contribute to major tech manufacturing and renewable energy plants, especially in Asia. In fact, exports of Australian resources and energy have grown at an average annual rate of 8.9% since 2000.
Good quality of life
The 'Sunburnt Country' also ranks well for quality of life2, performing well in the dimensions of education, health, environmental quality, democracy and political freedom. While one of the most expensive places to live, income is also relatively high. Australia has developed a healthy working culture, with two Australian cities – Sydney and Melbourne – ranking among the top 15 cities in the world for work-life balance in 2022 (6th and 12th, respectively)3.
How to register a company in Australia
If you meet the following criteria, you are considered to be carrying out business in Australia and must go through company registration:
● You have an intention to grow your company in Australia;
● You will conduct business activities with the intent to make profit;
● You will make deals and contracts in Australia.
You can complete company incorporation in two ways:
● Incorporate a local subsidiary company: This is a legal entity that protects the individual from business liability.
● Register a branch office: This is an extension of a parent company in a different country, not a local legal entity.
In this guide, we will focus on how to complete local subsidiary company incorporation in Australia. Note that if you’re not a resident of Australia, you should ensure you have an Australian address, local bank account and a local representative to represent your subsidiary before starting this company formation process.
Complete ABN registration
The first step of company registration in Australia is to register for an Australian Business Number (ABN) through the online Business Registration Service. This is a number used in orders and invoices, for claiming GST credits and for tax registrations. Prepare the following information:
● Business structure;
● Identity proof;
● Details of business activities and associates.
If you’re provided all the necessary information, you should receive your ABN immediately. If Foreign business applicant go through the same registration process but will receive an Australian Registered Body Number (ARBN) instead of an ABN.
Register a business name
Next, you should register a business name. While registering for the ABN through the Business Registration Service, you can register a company name at the same time. This is mandatory if you’re conducting a business under a name other than your personal name. Use the Business Name Availability tool from Australian Securities & Investments Commission (ASIC) to make sure your desired company name isn’t already taken. Make sure it isn’t already in use as a trademark.
You can choose to register your business name for one year or three years. After that period of time is up, you must renew your business name. This costs AUD$39 for one year or AUD$92 for three years.
Expect to receive confirmation of your business name in two days if you paid using credit card, or within five days if you paid using BPay, bank transfer or EFT.
Register a company
The next step in setting up a business in Australia is to determine if you need to register a company. If you’re not a sole trader, partnership, trust or superannuation, you need to do so. This creates a separate legal entity responsible for its own losses and incomes, with at least one shareholder and one director.
Simply prepare your company name and decide if it will be proprietary or public. The fee ranges from AUD$443 to AUD$538 depending on what type of company it is – check this page to find the relevant fee.
Once your application is successful, you’ll automatically receive an Australian Company Number (ACN) within two business days. The aforementioned ABN is different from the ACN; the former is for tax purposes and mandatory for all businesses to have, while the latter is only mandatory for companies to have. The ABN (11 digits long) is typically the ACN (9 digits long) with two additional digits at the beginning.
Apply for a director ID
You’ll also need to apply for a director identification number. A director is someone who runs the operations of a company or other registered Australian body. If there are multiple directors, each must obtain their own director ID.
Prepare the following documents for each director:
● Tax file number;
● Residential address;
● At least two documents issued by the Australian Taxation Office that confirm your identity.
Apply for business taxes and licences
The next steps in opening a company in Australia that you’ll need to complete are business tax registrations and getting any licences or permits relevant to your industry.
Some tax registrations only apply to certain business types, but all companies need to obtain a Tax File Number (TFN) if they’re earning income. As for licences and permits, they vary depending on the type of business you’re doing and the state you’re in, but in general approve your company for various activities. You can use the Australia Business Licence and Information Service’s tool to filter down what licences you need.
Find an office space
Once you’ve completed all the documentation required for company formation, you can look to finding an appropriate office space. There are various types of workspaces appropriate for companies at different stages of growth or industries.
For example, a virtual office is a quick and convenient way to establish a business address in Australia before you’ve physically relocated. A serviced office is a type of flexible office space where you can rent a furnished private office with communal facilities like meeting rooms and lounges, which could also be a great short- or long-term option.
Conclusion
Compass Offices has business centres equipped with a range of modern office solutions in two key Australian financial hubs: Melbourne and Sydney. We’re your experts in workspace in APAC, with a network of executive centres in China, Hong Kong, Singapore, Japan, Vietnam, Malaysia and the Philippines. Get in touch to start the journey of finding your cost-effective, corporate-grade office space in Australia.
1 https://www.dfat.gov.au/about-australia
2 https://www.oecdbetterlifeindex.org/countries/australia/
3 https://www.getkisi.com/work-life-balance-2022#table
