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Setting up a business in AustraliaBy Paul Bunting, MSI Ragg Weir, Accountants, Melbourne.

Wishing to set up a business in Australia? If yes, then you need to carefully consider the steps and planning to ensure there is a smooth transition and a sound foundation for the future of your business.

Business Structure

The decisions commence with the type of structure including whether to incorporate as an Australian entity.

This can be a difficult decision as there is often an inclination to keep the structure simple and have an Australian Branch Office rather than creating a registered company.

After working through the benefits & pitfalls of both options with recent entrants, the norm is to establish a company within Australia. There are some circumstances where a Branch Office is preferable, however it is an unusual outcome to establish in this manner.

Under both structures the business must have a person that resides in Australia as the Director representative and Public Officer. There can be additional directors that reside outside Australia.

Australian Taxation

Following the decision as to the type of entity and it has been incorporated via the Australian Securities & Investments Commission there is a requirement to register for Australian Taxation.

The registrations will include a Tax file Number and most likely Goods & Services Tax registration & an Australian Business Number.

If a business is to employ people there will also be a requirement for Pay As you Go – Withholding, workers compensation insurance (Workcover) and possibly Pay-roll Tax. Some of these registrations vary between the States of Australia.

The Australian method of accounting and taxation is similar to other developed countries around the world.

Decisions will need to be made in relation to where and how the accounting records will be maintained with the one of the goals being to ensure the business remains compliant with the Government Regulations. Often the business entering Australia has the necessary resources in their Head Office to maintain the accounting records, however the system must produce reports and documents that can be used in Australia to meet the local needs. The records will need to be kept in a manner that can be audited as it is likely they will be subject to a Statutory Audit.

The above items are the main points of consideration, however it is not an exhaustive list. There are a number of taxation issues and benefits that may be particular to the type of business and these need to be considered on a case by case basis.

For entities that we have supported, the following process was applied:

  • An initial telephone conference or meeting was held to gather an understanding of the requirements
  • Consideration was given to the options and we advised on the establishment
  • Assistance provided with the creation of the registered entity
  • Establishment of Taxation registrations
  • Assistance provided with the development of accounting systems
  • Support offered for the maintenance of the accounting systems (if required)
  • Preparation of required taxation returns
  • Performed the Statutory audit (if appropriate)

It’s important to consider all of the above when deciding on how to enter the Australian market or when establishing a business in Australia. Ensure you have the right support and professional advice so that the process is properly planned and smooth.

Contact the author directly by email or by telephone.

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