Australia is a state that can promise in certain cases benefits close to those are usually attributed to an offshore country. The country creates favorable conditions for effective business doing. For instance, Australia can propose a high level of asset security and numerous perfect legal ways to minimize tax deductions. Still, this country is considered a reputable jurisdiction that has implemented and complies with all applicable standards. That adds credits to the prospective business entity you may register there. Options for each case should be considered separately. But, in this overview, you may easily find basic information that may persuade you to look at this jurisdiction more precisely.
Major Forms of Legal and Business Presence
If you preliminary consider this country as your target jurisdiction, you may become present here by choosing one of these the most popular forms:
- Company (limited by shares) – is the most popular type of body corporate where the liability of shareholders is limited to the shares owned. The entity has a separate legal personality and shareholders are not liable for the results of the company’s operation with their personal property. A company can be formed by one person at least and be (i) private (Pty Ltd) where the number of shareholders is limited to 50 and shares cannot be freely offered and transferred to the public and (ii) public (Ltd) where there are no limitations as to the number of shareholders and restrictions for transferring shares to third parties. Attracting extra funding from the public is permitted for the public company only.
- Partnership – a type of business presence where two or more partners jointly conduct certain types of business activities under a certain business name and bear unlimited financial liability for all made undertakings.
- The Branch of an external organization (Australian branch) will allow working legally and conduct the same business operations that are allowed to the non-resident country abroad. This option may be perfect if you want to test local business opportunities for the start only.
- Representative Office is an option designated to test and investigate local business opportunities only and promote the activities of a foreign company in Australi
Registration requirements and steps to pass and register a company in Australia
Company registration in Australia basically requires passing these simple preliminary steps:
- Defining your key business priorities for implementing through the Australian enterprise.
- Choosing, verifying, and reserving a business name for a future enterprise.
- Arranging the registered office for a future corporate entity.
- Collecting information about the company's founders, beneficial owners, and future management.
- Drafting statutory and application documents.
- Submitting the set of formalized documents required for the registration to the Australian Securities and Investments Commission (basically, this package should include an application, the company's charter, confirmation of the company name reservation from ASIC Service Center; for foreign companies – all registration documents from the country of registration (must be apostilled).
- Registration for tax purposes (upon the establishment of a company, a tax number ABN is issued and the company can issue a domain name for its website).
- Registration for social security purposes.
- Opening a bank account (Payment Gateway or Merchant Account).
- Obtaining extra permits or licenses for certain types of regulated activities. All legal entities are registered with the Australian Securities and Investments Commission (ASIC) within 7 days.
Legal and Regulatory Framework
In Australia, the legal system is based on commonwealth legislation and local statutes with an emphasis on the decisions of supreme courts. Local enterprises shall be obligated to:
- become a taxpayer and obtain, in certain cases, license for regulated activities;
- keep full accounting and provide annual and other reporting within the timeframe established by law;
- keep minutes of meetings and register of shareholders and directors;
- notify within a period of up to 28 days of the supervisory authorities of any changes (legal address, directorship, distribution of shares) - this can be done by a hired corporate secretary.
All basic information on the name, amount of capital, management, and shareholders is in the public domain according to the Australian rules. The Corporations Act is the major legal act regulating the procedure of founding and operating companies in Australia. The Australian Securities and Investments Commission and the Bank of Australia are major regulatory bodies in terms of doing business in Australia.
Tax System of Australia
If you intend to form a company in Australia, these valuable tax highlights may be of great help:
- Corporate income tax (CIT) rate – 30% (26% for the so-called “small” enterprises)
- Personal income tax (PIT) rate – 45 %
- Value-added tax rate – 10%
- Withholding tax rates (for non-residents) – (I) dividends – 30%, (ii) interests – 10%, royalties – 30%
- Capital gains tax rates – (i) corporate – equals to the basic CIT rate, (ii) individual – equals to the basic PIT rate.
How Prifinance Specialists May Help You
If you are considering an option of the company formation in Australia, Prifinance specialists can help you to comply with all the formalities and start working as soon as possible. Our lawyers can assist you with choosing the right business option, collecting all documents, conducting the registration procedure, and opening a bank account for your future corporate entity. Reach us shortly for more precise assessments and consultations.