We are often asked by foreign nationals if they can start a business in Australia or if they can buy into an established business in Australia.
The simple answer is if you are not an Australian citizen or permanent resident, you need a visa to run a business in Australia but you can buy into a business but there are certain conditions that have to be met.
Starting a business as a foreign national
Before you can even think about starting a business you need a visa.
Visas are applied for and issued through the Department of Home Affairs. Currently no new business visas are being processed but we hope applications will be resumed in 2025.
Businesses are generally operated through four main different structures:
- Sole trader
- Company
- Partnership
- Trust
Each structure has its advantages and disadvantages, and it is important to get expert advice from your lawyer and accountant as to which one will suit you the best.
Consideration must be given to a range of issues such as:
- Due diligence on the market that you intend entering
- The prospective turnover the business will generate
- How many employees there will be
- The types of licensing, permits etc. that are required to operate the business lawfully
- What types of liability you will be exposed to
- Ongoing costs to operate and meet your regulatory requirements
- The types of insurances you will need
- The level of control by who and how
- Taxation issues including registering for Goods and Services Tax (GST), obtaining an Australian Business Number (ABN) and obtaining Tax File Number (TFN)
The sole trader is the most simplistic structure and cost effective whereas a company and trust can be more expensive.
Buying into a business as a foreign national
As indicated a foreign national can buy into a business in Australia but there are a number there are a number of issues you must consider.
- Do you have the appropriate visa if required?
- Has the due diligence which has been carried out on the business been adequate and do you have a correct picture of what you are buying or paying for?
- Do you require Foreign Investment Review Board (FIRB) approval to proceed with the purchase and this can vary depending on a range of issues?
- Who are going to be the directors of any company, as it is a requirement that at least one director must be an Australian resident?
- Have you complied with all the regulatory requirements and notified the Australian Securities and Investment Corporation (ASIC) if required?
- Have you obtained all the relevant registrations with the Australian Taxation Office (ATO) such as registering for GST, an ABN and TFN?
- Are all your legal and related documents in place to ensure compliance with the various legislative regimes your business may operate within?
- Are you aware of you employment and industrial relations obligation and is there compliance?
Get the right advisors
When starting a business in Australia or buying into one it is imperative you get the right advice.
The two most import advisors you will require at the commencement and on your journey are your lawyer and accountant.
You may also initially need a business broker and some other professionals who can assist such as insurance brokers to assist in protecting your assets as well as mortgage brokers to assist with financing.
How can FC Lawyers help?
At FC Lawyers our business and corporate team have over 30 years’ experience assisting people start their business journey in Australia right through from the visa process to establishing and advising on their businesses including growth, sales, and retirement.
Contact our team today to see how we can assist you in starting your business in Australia.
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