Setting up a business is a huge undertaking, no matter where you’re setting it up. There are so many things to consider: permits, leases, hiring, tax structuring, bookkeeping, marketing, manufacturing, and more.
Fortunately for people who are setting up businesses in Australia, the Australian economy ranks well, and the overall business environment is friendly and competitive. It’s a great time to be starting a business in Australia, but where do you start?
Let’s take a look at the top 10 challenges of setting up a business in Australia.
1. Incorporation
Before your business is legally recognised in Australia, you’ll need to complete and submit ASIC Form 201. This form, “Application for Registration as an Australian Company,” allows you to incorporate as an Australian business (if that is how you choose to structure your business – there are options, although this is the most likely set up structure). It’s also the form that gives you a company number. Additionally, you’ll need to register for an ABN with the Australian Taxation Office.
2. Construction Permits in Australia
If your business will need to build facilities or even just add on to existing facilities, construction permits could pose challenges for you. Australian businesses must complete 11 different procedures associated with construction permits. These procedures include several inspections that must be performed by local authorities. This sounds like a lot, but the process is relatively streamlined when compared to business construction permits in other OECD countries. Still, it’s important to plan plenty of time and resources to take care of your construction permits.
3. Utilities in Australia
When a private citizen moves into a personal residence, it usually just takes a day or two to get the electricity turned on. Don’t make the mistake of thinking that the same goes for businesses. In order to get electricity turned on to your business, there are several procedures you’ll need to complete at the time you register your business property. For instance, you’ll need to complete a CT Metering form and arrange for an internal wiring inspection. All told, it will probably take about 75 days to complete your utilities prep work, so plan ahead!
4. Acquiring Funding in Australia
Most new businesses require lines of credit or small business loans for start-up capital. Australia has a robust financial services industry, offering a wide variety of loans and funding for businesses. Shop around in order to get the best interest rates and the kind of customer service that will be serve your business.
5. Taxation in Australia
Collecting and paying taxes is a major part of an organisation’s operations, so it’s important to get taxation squared away from the very start. If you haven’t set up a business in Australia before, you’ll need to familiarise yourself with the superannuation levy. The corporate income tax currently stands at a flat 30%. You should have registered with the Australian Taxation Office when you first registered your business. Follow up with the ATO for further instructions.
6. Imports and Exports in Australia
Trading across borders has become more and more common in recent years as online business has boomed. There is documentation required by the Australian government for businesses that want to export and import. This might be a lot of paperwork, but most businesses can complete and submit it in a short period of time. Seek advice to ensure you have all the right documentation.
7. Acclimatising to the Culture in Australia
How does Australia’s business climate compare to the climate where you’ve previously operated? Australia’s is a small market, and the educated, affluent population relies heavily on international trade. Cultural barriers are generally not an issue; globalised business means that you’ll run into many different cultures as you conduct business in Australia.
8. Understanding the Judicial System in Australia
Australia has a modern judicial system, which is used sometimes in enforcing contracts and resolving insolvency problems. If you find yourself in a situation with the judicial system, know that the processes are fairly streamlined, cutting down on the time and resources you’ll spend getting the issue resolved.
9. Understand the GST implications of your product or service
Australia levies a federal Goods and Services Tax (otherwise known as VAT) of 10%. However, a number of goods can be GST-Free (zero rated) or input taxed including medical items, food and financial supplies. The exclusions are not always as clear cut as they may first seem so be sure you understand the GST treatment of goods or services you are providing and the associated GST implications.
10. Finding an Adviser in Australia
Even if you’re highly experienced with business in your home country, it can be extremely helpful to find an adviser to help you through the process of setting up a business in Australia. Here at Altus Financial, we have the experience and the tools to guide you through the process and answer all of your questions as they arise. For more information, contact us. We’ll be happy to help you navigate this exciting transition.
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