The smallest continent in the world, which covers an area of 7.7 million km2, is rich in natural and mineral resources. Australia has one of the most favorable climates in the world. The continent is multinational, but most of the population is of British origin, as the Australian continent was a British colony for a long time. Now Australia is a member of the Commonwealth of Nations. The conditions for company registration in Australia are considered as favorable as in Great Britain, formed on its model, but with some local peculiarities.
The region’s advantages
If you plan to start a company in Australia or buy an existing one, the following advantages of doing business in the region will be available to you:
- stable political and economic environment;
- favorable conditions for doing business, including for foreign investors;
- the existence of business support programs, simplified procedures for obtaining visas for foreign investors, as well as grants in specific areas;
- easy process for starting a business in Australia.
You can run a business in Australia as a sole trader, as a partnership, or by registering a local legal entity. In addition, those companies established outside Australia can do business in this jurisdiction after registering a branch or representative office.
Companies are registered by the Australian Securities and Investments Commission. They are assigned a unique identification number. Depending on the type of liability of the participants are distinguished:
- companies with unlimited liability;
- a company, the liability of the participants of which is limited to the value of the shares held;
- a company, the liability of whose participants are limited to a certain amount (guarantee).
Typical forms of companies in Australia:
- A private company with limited liability, whose participants risk losing only the amount of the invested funds if the company suffers a loss in liquidation. Even with partial payment of contributions, the participants will be liable only for the unpaid part of the contribution (in case of liquidation of the company). The number of participants is limited to 50 people. It is easy to register a company but cannot attract investments through fundraising or otherwise.
- A public limited company is often used to raise capital from an unlimited number of people. A public company must comply with strict legal requirements, particularly concerning management.
- A branch is registered by a foreign company, which plans to start conducting the same activities in the region as in the country of primary registration. The branch must have a local representative.
- A representative office is registered by a foreign company that does not plan to conduct business in the region but will carry out activities to promote goods and services.
Registration procedure and requirements
Before starting the procedure, you must choose a name for the business. The registered name can be the name unless it is identical to the name that has been reserved or registered. In addition, before registration, the company’s bylaws must be drawn up, which must designate the following:
- the terms and extent of liability of the participants;
- the rules for conducting business.
The process of registering a company in Australia includes the following steps:
- Selection of a suitable organizational-legal form, taking into account the proposed activities.
- Drawing up a business plan.
- Collection of data on participants, beneficiaries, and managers.
- Selection of the legal address.
- Formation of the authorized capital of the Australian company.
- Filling in the registration forms, as well as the formation of the package of documents for registration.
- Payment of the necessary fees and filing documents for registration. Obtaining registration confirmation in case of a favorable decision of the Securities and Investment Commission.
- Registration for tax purposes and hiring employees.
- Establishing a corporate bank account.
- Obtaining permits for regulated activities (optional).
Each registration case differs depending on the initial data and several other nuances of local legislation. Prifinance lawyers will be happy to advise in detail on the issue, make a plan of action, and complete the business registration procedure in Australia. The lawyers will also suggest that if you buy a company in Australia, analyze the risks involved and prepare the necessary documents for the transaction.
Legislation and business conditions
The legal system is a mixture of standard and statutory law, modeled on the United Kingdom and some European countries. A particular emphasis in the legal system is placed on the independence of the courts. All companies, both local and foreign, have the same legal status.
The regulatory policy focuses on activities in the financial markets. In 2001, the corporate sector was reformed to maintain the market’s integrity and ensure adequate investor protection. Currency controls were abolished. The application of such measures is considered only in exceptional cases.
The Australian economy is one of the most flexible and competitively developed. It is also characterized by rapid growth trends (since 1990), a stable low level of inflation, and a low level of unemployment. Among the business centers of the region, note Sydney, Melbourne, Brisbane, and Perth. In addition, Australia is a developed financial center in the Asia-Pacific region.
Australia’s workforce is made up of highly educated and skilled workers. The Australian educational system is considered highly developed, which trains qualified staff.
If you plan to buy a firm in Australia or start a new one, consider the following tax rates:
- corporate tax – (1) introductory rate – 30%, (2) for small and medium businesses – 25%
- personal income tax – 45%
- tax on goods and services – 10%
- withholding taxes (for non-residents) – (1) dividends – 30%, (2) interest – 10%, (3) royalties – 30%
- capital gains tax – (1) corporate – see corporate tax rate, (2) individual – see individual income tax rate.
How Prifinance lawyers can help
Prifinance lawyers will develop solutions for opening a company in Australia and other regions. The lawyers will draw up a plan of action, draft documents, and negotiate with local advisors and government authorities. In addition, Prifinance lawyers will support further activities of the Australian company and help realize business tasks in this and other regions.