It’s easy to understand why you are contemplating starting a business in Australia. One of the best places for establishing a business and living has been attracting people from all over the world for decades, if not centuries. Still, there are quite a few things you should be aware of before you start building your professional future down under.
Needless to say, embarking on a new business is a combination of excitement and anxiety, probably in equal measure. On one hand, you get to be your own boss and master of your own fate. On the other hand, almost everything will depend on you and your decisions, which puts a lot of pressure on someone who should be completely focused on the tasks ahead. To help you start your business, we’ve prepared the following list of things you simply have to consider before setting up your own company in Australia.
What business structure to choose?
The structure you opt for will have a direct impact on many elements, such as your level of control, the amount of tax you should pay, regulatory obligations, and the level of personal liability you will incur, to name but a few. You might choose to be a sole trader, i.e. register yourself as the sole owner of the business. That implies you’re responsible for all legal aspects of running the business in Australia, but you have complete autonomy when it comes to hiring staff.
Another option is a company, i.e. a commercial business or entity that has a separate legal existence to its shareholders. Alternatively, you could opt for a partnership, when more than one person and/or entities run a business together, but not in the form of a company. Finally, you should consider a trust, which is an entity that is in possession of property, income, or any other assets for the benefit of a third party. This decision is among the first ones you’ll have to make and it should be done before you register your business, since each structure entails different steps.
Type of business
Once you’ve decided what structure is the most suitable for you, you should think about the type of business you’re likely to need. There are many options out there, such as an online business, a franchise, and an independent contractor. Each industry has a different set of legal obligations and requirements, which is why you should consult an expert if you’re not completely sure what the best option is.
Another thing that you should do well before you start working is to find a suitable location for your business. The right choice will help your company thrive, just like a wrong one can easily shatter your dreams. If you are converting a garage or some other room in your house into an office, you don’t have to think about moving furniture. Otherwise, you should organize the transport of all furniture and equipment you’re going to need. You can take care of the move yourself – packing, loading, transport, and unloading but the best way to do this depend greatly on the type of business, i.e. amount of stuff you need to start working.
Submit an Expression of Interest (EOI)
A foreigner looking to start and manage a business entity in Australia needs to submit an Expression of Interest (EOI), based on which you will be invited to apply for the Australian Business visa, which is another necessary requirement.
Obtain a Service Level Agreement (SLA)
Another document you need to obtain before you start providing a service to individuals or companies in Australia is a Service Level Agreement (SLA). It provides a clear understanding of the scope, responsibilities, and quality that the service provider will deliver to the service user. All the SLAs have a pre-defined contracted delivery time for the services that they render.
Obtain a Statement of Work (SOW)
If you are not in the business of providing services to your clients then most likely you will be in the business of manufacturing or developing something. So, you’ll first need to develop a statement of work (SOW), which will address many areas, such as the purpose of work, a period of performance, acceptance criteria, etc.
Both these SLAs and SOWs are legal documents that need to be made with special care to avoid discrepancies later, during the project work, or the provision of services. It is, therefore, recommended that you hire an expert for drafting these documents.
Apply for ABN and register your business name
The Australian Business Number (ABN) is an 11-digit number that is unique to your business and acts as a government identifier for the business. When you get an ABN, you can register your business name. You should decide on your business name before you go about creating assets like your website URL, logo, and other designs. If you create a business logo, you might want to patent it to protect yourself from copyright infringement. The good thing is that you can apply for both ABN and business name at the same time.
Register your domain name
Once you’ve secure your ABN and business name, you can get a .com.au address. The domain name you choose needs to be related to your business somehow and easy for potential clients to find and recognize. Hopefully, the name you select will be available, i.e. not already taken. If you’re lucky to get the domain name you like, you can go to the .au Domain Administration Ltd website to find links to domain registrars and resellers.
Register for the correct taxes
Just like everywhere else in the world, you are obliged to register for the correct taxes to avoid any legal implications. The taxes you must register for are dependent on the type of business, but some taxes are mandatory regardless of this criterion. For example, the Goods and Services Tax (GST) must be paid if your business has a turnover of AUD 75,000 or more. Pay as You Go (PAYG) withholding tax is required if you need to withhold an amount for tax purposes, such as paying salaries. Fringe Benefits Tax (FBT) applies to businesses that can provide perks, such as a company car.
These are just some of the necessary steps you should take if you wish to set up a company in Australia. Hopefully, you’ll find them useful and you’ll soon be able to put your idea into practice. We can only wish you good luck!