Australia is a large state that occupies the continent of the same name, as well as several islands. In terms of HDI, it takes 3rd place. It has a large economy, which is the 13th largest in the world. Therefore, there are more and more people wishing to register a company in Australia.
Developed sectors of the economy: services, agriculture, industry, energy. It is interesting that the state minimally interferes with the economy; it is generally accepted that the laissez-faire principle is most fully embodied in Australia.
What do you need to register a company in Australia?
The main legislation governing the formation and operation of companies (and some other business entities) is the Corporations Act 2001. Published by the Australian Securities and Investments Commission (ASIC), it modifies or clarifies the operation of certain provisions of the Corporations Act and other statutes governed by ASICs, including the exemption of certain entities from the provisions of the Corporations Act.
The preparation process for registering a company in Australia
To register a company in Australia, you must submit a registration application to the ASIC. Each company must do/have the following:
- Choose the state in which it will be registered;
- Name (limited companies must include “Limited” or “LTD” and proprietary companies must include “Proprietary” or “Pty”).
- Have a real registered office in Australia;
- Appoint directors (at least one must be resident in Australia) and other officers;
- Provide and store updated information about its shareholders.
- As long as all the necessary information is provided to the ASIC, the company can be registered within one business day. Registration entitles the company to conduct business anywhere in Australia.
Upon incorporation, each company in Australia:
Receives a unique Australian Company Number (ACN). A Certificate of Registration is issued, which indicates the name of the company. For tax purposes, trading companies require an Australian Business Number (ABN), which is issued by the Australian Tax Office (ATO).
The company is also issued a corporate key (eight-digit number) that allows the company to manage certain aspects of its relationship with the ASIC online.
Setting up a company in Australia: taxation
Since Australia is a federal state, the local tax system is fundamentally somewhat similar to the American and Swiss ones: it includes state and federal taxes.
The main federal taxes are income tax, corporate tax, capital gains tax, Goods and sales tax, and additional income taxes.
Major taxes by state: stamp duty, land tax, payroll tax.
Companies are generally taxed at a flat rate of 30% (except for small businesses with income less than AUD 25 million, which are taxed at 27.5%). Special rates apply to insurance companies, pension funds, and other organizations.
Capital gains tax
Capital gains are included in taxable income. Capital gains earned by individuals and trusts (but not companies) that have assets held for at least 12 months are usually cut in half.
This tax is levied on the stock of goods and services. In general, GST is similar to VAT in Europe. And it is paid at a fixed rate – 10% of the cost of a service or product, which is taxed. Registration for GST is mandatory for those enterprises that deliver products to Australia for 75 thousand AUD per year.
Typically, the tax is imposed on transactions that relate to land, and in some states and business assets (businesses, equipment, intellectual property).
The confidentiality of companies can be general or individual, depending on the nature of the business that each company conducts.
How to register a company in Australia
The country is considered loyal to non-residents. The differences in local legislation are that a license may be required regardless of the form of business. It is important to obtain a tax number, keep records and bookkeeping, insurance of employees is mandatory. If the company makes a profit outside the jurisdiction, you can apply for a tax exemption.
What types of companies can be incorporated in Australia:
- A private company with limited liability;
- Public company;
- Private enterprise;
- Non-profit organization;
- Offshore company (registration only in the offshore zone).
You can buy a ready-made company or open companies from scratch. An agent is required. At least one director must be a citizen of the country. The minimum number of shareholders is 1, citizenship can be any. There are no requirements for mandatory audit, there is no foreign exchange control. It is quite difficult to open a company on your own in another country. To get answers to your questions, please contact our specialists at IT-OFFSHORE.
Pros of doing business in Australia
The most popular areas for starting a company include financial services and insurance, as well as educational projects. You can develop your business in the tourism sector, for example, opening a tour desk, hotel, etc. An alternative option is to develop a business in the field of medicine and provide diagnostic services, and care services for people with disabilities. The opening of a business in the field of construction and repair, and transportation is actual.
An advantage of entrepreneurship in the country is the availability of state support programs. Income tax is relatively low. The government additionally supports individuals who open a business in underdeveloped areas of jurisdiction. In this case, you can get tax and social benefits.