Setting up a Company in Australia: 10 Things to Consider

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The process of setting up a company in Australia can be overwhelming — but it doesn’t have to be. Here’s a list of factors you should consider when setting up in Australia.

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_custom_heading text=”1. How Will You Structure Your Business?” use_theme_fonts=”yes”][vc_column_text]

The first step in setting up a company in Australia is determining how your business will be structured.

There are four primary ways in which Australian businesses are structured:
• Sole Traders
• Partnerships
• Trusts
• Companies

Investors should carefully compare the various business structures, as each is associated with different tax obligations and benefits. For more information on Australian Business Structures, see the Fullstack guide on choosing the right corporate structure.

Some investors may prefer to establish a new Australian company, or operate as an Australian subsidiary owned by a foreign company. Foreign business entities have the option of carrying out business in Australia as a foreign company but must be registered with the Australian Securities and Investments Commission (ASIC). Guidance on foreign company operations in Australia is available via the ASIC website.

Alternatively, foreign business entities may choose to acquire an existing Australian company. When seeking to acquire an Australian company, foreign business entities may be obligated to submit a formal proposal to the Australian Foreign Investment Review Board (FIRB) for review.

It’s also important to consider the personnel requirements of your Australian business including who will be your Australian resident director. Australian companies must possess a minimum of one Australian resident director.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_custom_heading text=”2. Visas” use_theme_fonts=”yes”][vc_column_text]

Individuals seeking to set up a company in Australia will need to apply for an Australian business visa — the Department of Home Affairs is responsible for business visa applications. There are two business visa options available to new company owners in Australia:
• Business Innovation and Investment visas are designed for individuals that possess business skills and want to set up a new business in Australia or manage an existing business. The Department of Home Affairs provides detailed guidance on the Business Innovation and Investment Visa application process.
• Business Talent Visas can be applied for by individuals that own or part-own an overseas business and possess net business and personal assets of at least AUD $1.5 million or an annual business turnover of at least AUD $3 million. Individuals that meet this requirement apply via the Significant Business History Application Stream. A Venture Capital Entrepreneur Application Stream is available to prospective business owners that have secured a minimum of AUD $1 million in venture capital funding in Australia.

There are currently four different application streams available to investors seeking an Australian Business Innovation and Investment Visa:
• Business Innovation Stream;
• Investor Stream;
• Significant Investor Stream; and
• Premium Investor Stream.

Foreign investors that meet capital and skill requirements dictated by the Department of Home Affairs will be invited by the Minister of Immigration and Border Protection to apply for one of the above streams. The Department of Home Affairs accepts expressions of interest in Business visas via the SkillSelect website.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_custom_heading text=”3. Incorporating Your Company” use_theme_fonts=”yes”][vc_column_text]In order to set up a new company in Australia, foreign investors will need to firstly incorporate their company with the Australian Securities and Investment Commission. Companies will subsequently be issued with an Australian Company Number (ACN).

In contrast with simpler business structures such as sole traders and partnerships, setting up a company in Australia is complex and involves a large amount of paperwork. In order to set up an Australian company, foreign investors must:
• Determine whether the company will be limited by shares or an unlimited company;
• Establish an internal governance system that conforms to the Australian Corporations Act;
• Register a business name and create a shareholders’ agreement;
• Register with ASIC, appoint an auditor and public officer, and maintain a share registry and minutes;
• Complete all necessary tax registrations;
• Submit necessary proof of identity documents for overseas corporate shareholders and directors.

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_custom_heading text=”4. Applying for a TFN” use_theme_fonts=”yes”][vc_column_text]In order to get started setting up your Australian company, you’ll need an Australian Tax File Number. This number is necessary in order to complete subsequent steps in the set up process such as applying for an Australian Business Number or business name. Registering for a TFN is a relatively straightforward process and can be performed via the Australian Tax Office website subsequent to obtaining a visa.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_custom_heading text=”5. Applying for an Australian Business Number” use_theme_fonts=”yes”][vc_column_text]Any foreign investor planning on doing business in Australia will need an Australian Business Number (ABN). All businesses operating in Australia must obtain a compulsory 11-digit ABN number.

For more information on registering for an ABN, check out the Fullstack Guide on how to apply for an ABN number in Australia.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_custom_heading text=”6. Registering your Business Name” use_theme_fonts=”yes”][vc_column_text]Your Australian business will need a name — it’s possible to check whether the name you prefer is available by searching the ASIC business name register. Business names registered in Australia are linked to the Australian Business Number of the business entity.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_custom_heading text=”7. How Will You Structure Business Assets?” use_theme_fonts=”yes”][vc_column_text]Assets held by a business should be held separately from the associated trading company in order to protect them. It’s important to determine where and how these assets will be held.

Some investors choose to set up an additional Australian company to hold business assets, while others choose to hold assets through a foreign holding company.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_custom_heading text=”8. Protecting Intellectual Property” use_theme_fonts=”yes”][vc_column_text]If you setup company in Australia, you should consider protecting the intellectual property of your business by registering a trade mark, Australian patents, design or copyright protection, or an Australian domain name. Detailed guidance on Australian intellectual property law is available via the Australian Trade and Investment Commission website.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_custom_heading text=”9. Will You List Your Company on the ASX?” use_theme_fonts=”yes”][vc_column_text]If you’re planning on listing your new Australian company on the Australian Stock Exchange (ASX), there are a number of obligations that must be met. Investors seeking to list on the ASX must incorporate a public company and meet a variety of requirements that are outlined in the  Corporations Act 2001 and the stock exchange listing rules.

Public companies listing on the ASX must:
• Make at least 20 percent of all shares available for public trading (free float)
• Possess a minimum of 300 non-affiliated shareholders, with each individual shareholder holding a minimum value of AUD $2,000
• Meet the requirements outlined by either the profit test or asset test. The profit test is dictated by the total aggregated profit form continuous operations over the last three years of company operation. In order to pass the profit test, companies must have a minimum of $1 million aggregated profit over three years, as well as  $500,000 consolidated gross profit over the last 12 months.

The asset test requires that companies possess a minimum of $4 million net tangible assets or a market capitalisation subsequent to a public offering of at least $15 million before listing on the ASX.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_custom_heading text=”10. Understand Your Tax Obligations & Incentives” use_theme_fonts=”yes”][vc_column_text]There are many different business and company structures available to foreign corporations seeking to setup company in Australia. At a fundamental level, it’s important to consider whether you must register for Goods and Services Tax (GST) or Pay As You Go (PAYG). If your business will employ people, for example, you’ll need to register for PAYG.

The complex nature of the Australian taxation ecosystem means it’s best to engage the services of a professional tax consultancy in order to ensure your Australian business doesn’t overpay in tax.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_custom_heading text=”Setting Up in Australia” use_theme_fonts=”yes”][vc_column_text]

If you’re a foreign investor and you’ve secured an Australian business visa, it’s essential to consider the legal, regulatory, and tax obligations you must fulfil in order to set up in Australia. The most important factors to consider are:
• The structure of your Australian business
• Where your business premises will be located
• Protecting the intellectual property of your business
• Executing an effective tax strategy
• Complying with consumer law

It’s important to seek professional legal and financial advice to ensure that your Australian company is structured in a compliant and tax-effective manner. A professional advisory firm can assist your Australian business with selecting a company structure, securing property from which to operate, obtaining development approval, or apply for business or company registration.[/vc_column_text][/vc_column][/vc_row][vc_row el_class=”italic-top-space”][vc_column][vc_column_text]Navigating the Australian business ecosystem is a time-consuming task. If you’re considering to setup a company in Australia, reach out to Fullstack for comprehensive guidance today.[/vc_column_text][/vc_column][/vc_row][/vc_section]