Australian Business Numbers Registry
australian business numbers registry
Incentives For Incorporating In Australia – Why To Start Your Company In Australia
With a global reputation for “thinking outside the box” and being an OECD member, incorporating a business in Australia can be beneficial both in terms of business efficiency and reputation. Being one of the easiest places to do business worldwide, with a population of over 21 million, Australia is an attractive market in which to undertake company incorporation for a variety of reasons. With significant levels of foreign direct investment (FDI), it is interesting to look into the many incentives that attract entrepreneurs to Australia.
Location
As Asia Pacific proves to be a key region for future business, with two thirds of the global middle class expected to come from Asia within the next few years, Australia is strategically located to take advantage of these prospects. Indeed, Asia has the most dynamic growth potential in the world, and Australia can easily undertake business with dominant nations like China and India, which provide a major source of income. Australia also benefits from various advantages as a result of its time zone, which allows Australian businesses to accommodate to the working days of both European, American and Asian companies. Indeed, the start of the Australian working day comes around the end of the European and US working day, and the start of the major Asian markets working day comes before the end of the Australian working day. These natural time differences give Australia an important business advantage over other countries. Similarly, Australia’s opposing seasons with other areas in the world give it strategic benefits in agricultural and food industries.
Transport
Australia provides an effective and advanced range of transportation options for businesses and people. Sea-freight is both reliable and convenient, as there are regular services between Australia and key business centres across Asia and other international markets. Indeed, over 10 shipping companies provide direct services to China, and as a result, freight services provide competitive rates. Similarly, air freight offers many efficient options to businesses, and minimizes transit time.
Domestically, the road, air and rail transport systems are cost-efficient and dependable. Australia’s domestic air transport services have been rated within the best in the Asia-Pacific region, and general transportation will be further advanced with the government’s investment into a trans-continental railway that is in the process of being built.
Overall, the transport infrastructure from Australia to key nations around the world is an integral and effective system that allows Australian businesses to prosper both nationally and internationally thanks to streamlined and flexible trade services.
Culture
Australia’s history implies the diversity of its people today, with Australian residents originating from over 200 different countries worldwide. Consequently, about 25% of the Australian workers are bilingual, speaking a language other than English. Furthermore, with about 1.5million Australians speaking an Asian language at home (Australian Bureau of Statistics – 2006), Australia’s readiness to take full advantage of Asia’s business opportunities is clear. Entrepreneurs benefit from having access to a multicultural and multilingual workforce, which allows better incorporation with major world markets beyond Australia’s own domestic market.
Beyond having a multicultural and multilingual workforce, Australia’s education system is recognized as being within the top ten in the world, and provides for a highly skilled workforce in many fields such as engineering, finance and IT (IMD World Competitiveness Yearbook). Australians’ commitment to education and innovation is reinforced with Australia holding the 3rd highest human development index (HDI) in the world, an index developed by economist Mahbub ul Haq and based on three elements of life expectancy, knowledge / education and standard of living.
As a whole, the Australian workforce provides a highly effective and competitive source of intelligence for all business operations. Entrepreneurs who incorporate in Australia will have little to complain about in terms of workforce; immigration policies make it relatively easy to hire from overseas and expatriate.
In Australia there is a general pro-business culture, which is supported by many government initiatives and grants offered to businesses. For example, in the aim of developing export markets, there is a 50% reimbursement of all overseas promotion expenses made by small and medium enterprises in Australia. There are also significant benefits given to companies to encourage investment into their research and development departments.
Policy and Taxes
Given Australia’s evident pro-business culture, the government has strategically incorporated a business-friendly infrastructure of laws that encourage entrepreneurship and investment.
In terms of starting a business in Australia, despite the requirement to have a resident director and secretary, it is relatively fast and easy to incorporate a company. Entrepreneurs can rest assured that they are within a stable economy that has important legal measures implemented to support this. As a result, businesses are required to provide annual and audited financial statements, and there is a public registry that states all directors, shareholders and beneficial owners of Australian companies. However, whilst some businesses may perceive this to be a hassle, it ensures reliability and security for investors as well as entrepreneurs in business-to-business transactions.
The Australia Corporations Act of 2001 is the main source of legal regulation that governs businesses and their operation within Australia. International business is facilitated by various Free Trade Agreements Australia has made with key economies like Singapore, New Zealand, the United States, Thailand and Chile. Furthermore, Australia has an excellent reputation for the protection of intellectual property rights, with laws that favour entrepreneurs and the development of their specific trademarks and copyrights.
In terms of tax, Australia is ranked as being within the 10 lowest tax nations of OECD members. The tax year runs from 1st July to 30th June the following year and Australian companies are taxable on all worldwide income, at a rate of 30%, except where the income is taxed overseas by another jurisdiction. Furthermore, Australia has signed a number of double tax treaties that protect individuals and businesses from being taxed twice for the same income. Non-resident companies are taxed only on locally sourced income and on the profits gained from the disposal of assets. Although a 30% corporate tax rate may seem high to some entrepreneurs, it is comparitively low in the context that Australia is a developed and leading jurisdiction as well as an OECD member. In this way, although being subject to corporate tax, the company is not perceived as a tax haven and with strategic tax planning, can legally minimize taxes.
All Australian companies with income exceeding $50,000 are required to pay goods and services tax (GST), or else they cannot issue their annual tax invoices.
The general taxation and legal system in Australia provides an effective infratructure to encourage business and ensure reliability and stability in the economy. Australia is perceived as the equal eighth least corrupt nation in the world, by Transparency International in their Corruption Perception Index 2009, which is positive support for Australia incorporation.
Current Business
With its economy ranking as the 3rd freest worldwide, and the nation being the 9th easiest place to do business worldwide, it is evident why Australia remains a stable location for investment and a growing economy, despite the global recession. Within the Australian economy, finance and insurance is the fourth largest sector. Australia boasts an extremely developed financial market, and the fastest growing foreign exchange market in the Asia Pacific Region as well as a major financial services centre with assets valued at over A$4.3 trillion. Australia acts as a regional leader in investment management and has one of the most important capital markets in Asia. Supporting this, the World Economic Forum’s Competitiveness Report judges Australia to have the 4th soundest banking system worldwide with the 3rd most effective regulation of securities exchanges worldwide.
Company Incorporation
As previously stated, incorporating a company in Australia requires one resident-director, a resident-secretary and a minimum of one shareholder. Complete foreign ownership is legally authorized which makes Australia an attractive location for offshore business. Generally, entrepreneurs who incorporate a company in Australia do this with the aid of a specialized professional services firm, which ensures compliance with the law and knowledge of important tax procedures, as well as the provision of a resident director and secretary in certain circumstances.
There are no capital requirements to incorporate a company in Australia, and with the competitive office rental prices in the major Australian cities being lower than in other major business cities like London and Hong Kong, entrepreneurs see Australia as a cost-efficient place to do business with access to international markets.
Living
Australia is globally known for having a low cost of living in comparison to other major business centres, which explains Mercer Human Resources ranking five of Australia’s main cities in the top 50 worldwide for its Quality of Living Survey (2009). Entrepreneurs, who decide to live in Australia, as well as their families, will benefit from the advanced infrastructure, transport and telecommunications. Furthermore, Australia is recognized for its unique environment and enjoyable climate, which is neither too hot nor too cold. Housing, healthcare and education are of high quality and affordable.
In conclusion, Australia provides an excellent, cost-efficient business environment that is pro-entrepreneurship. Considering Australia’s position as a developed nation with an extremely low corruption index and a respectable tax system, Australia is an ideal place for most entrepreneurs to incorporate their business. Entrepreneurs take advantage of the many advanced facilities Australia offers, whilst benefitting from a stable and respected jurisdiction for their business to prosper globally.
Healy Consultants is a leading corporate services firm that assists entrepreneurs and investors with their company incorporation requirements. The firm provides a range of services including Australia Company Formation, tax planning and offshore investing. More information on company incorporation can be found by visiting http://www.healyconsultants.com
About the Author
Melissa Glotzer is a Marketing Assistant at Healy Consultants. She is a graduate of the University of Manchester Business School with a BSc (Honours) in Management with Accounting and Finance.
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