How to Manage Geopolitical Risks
August 5, 2022
Navigating the Global Market: Insights for Founders and Investors Expanding Internationally
March 1, 2023
Advantages of Doing Business in Australia
Are you planning to expand your business internationally or keen to start a company in Australia? There’s no doubt that Australia is a great location for your business to expand internationally. Most firms can open an office in the country because of its solid economy and simple business procedures. A varied pool of suitable individuals to hire is also made available by the nation’s highly educated and skilled population.
Here are other reasons to consider doing business in Australia.
1. Ease of Doing Business
Australia ranked 14th in terms of business ease and 7th in terms of ease of starting a business in the World Bank’s Doing Business 2020 study. Typically, the Australian Securities and Investments Commission (ASIC) takes two days to approve a company’s registration, and there is no minimum paid-in capital requirement, which makes it simple for business owners to enter the market. Australia also supports four different business structures including sole trader, companies, partnerships, and trusts.
Furthermore, getting credit is easy in Australia. In fact, the nation’s score on the Strength of Legal Rights Index places it fourth in the world for how easy it is to obtain credit. The country also received an 11 out of 12 rating from the World Bank, signifying that its laws almost perfectly protect the interests of lenders and borrowers.
2. Skilled and diverse workforce
Given that eight Australian universities made it onto the list of top 100 universities in the world according to the U.S. News Top 100 rankings for 2022, it is not unexpected that the country is home to some of the most skilled graduates and employees. Australia’s STEM industries are particularly promising, with fields like computer science, clinical medicine, and space science paving the way for new discoveries.
Although there is no official language in Australia, English is the primary language used in the country. However, many people speak other languages, such as Arabic, Mandarin, Cantonese, Greek, and Vietnamese because one in five Australians was born abroad.
3. Strong economy
The first recession Australia has seen in 29 years was brought on by COVID-19, but the economy has shown itself to be robust, recovering with a GDP growth of 4.54 percent in 2021. Plus, the Australian economy is likely to grow even more in the coming years as limitations gradually loosen as a result of rising vaccination rates.
Australia’s economy, which makes up 1.6% of the world economy, is also ranked as the 12th largest in the world by the International Monetary Fund (IMF). Even after the epidemic increased federal spending, Australia’s national debt is low relative to other industrialized nations.
4. Strategic location and strong ties with other countries
The most powerful economies of Asia, including Japan, China, and most of Southeast Asia, are in the same time zone as Australia. Additionally, the country is more approachable for businesses with offices in Canada and Europe thanks to its historical ties to the US and the UK.
Australia acts as a gateway to other international markets due to its position and its relationships to Asian markets. You can improve your chances of success in these important international markets by expanding to Australia.
How to start a business in Australia
With a strong economy even amidst the COVID-19 pandemic, Australia has shown the world that it’s not only a beautiful land with pristine beaches, but also a robust country that offers huge opportunities for businesses. If you’re one of the businesses looking to expand in Australia, here’s a step-by-step quick guide for you.
1. Research
Businesses must analyse the demand for their product realistically while scaling abroad. This method is significantly easier if you have an online channel. In any case, you’ll need to know your product’s positioning in Australia, as well as market trends, rivals, and industry risks. A thorough market analysis is recommended.
Getting solid guidance from knowledgeable people in-country can help you fill in the gaps in your knowledge. In Australia, professionals and non-competitive business owners can provide useful information about market factors, cultural nuances, sales cycle variances, and more. If your local advisors are familiar with both your and Australia’s business cultures, they will be able to point out the distinctions.
2. Hire a solid team
People and partners from the community are critical. While sending your existing personnel to Australia rather than hiring new local talent may save money in the short term due to cheaper labour expenses, there may be long-term consequences. Failure to understand the Australian market and create the relationships required for success in Australia might result in costly mistakes.
Background checks and clear, tax-effective contracts are necessary when hiring senior management staff. A mix of incentives aimed at both sales and profit should be included in remuneration.
3. Build partnerships
You’ll have established partner relationships that are aligned and incentivised to help you when you start business in Australia if you invest time creating rapport and trust with suppliers and customers before you start trading. In the early phases of your organisation, these connections could assist you prevent inefficiencies in your supply chain distribution networks.
Before you expand into Australia, be sure your investors have enough money to fund an Australian firm. When you go to market, new issues may arise that you hadn’t anticipated, so be sure your financial underpinnings are solid. Because of the underlying tax ramifications, it’s also critical to choose the most appropriate sort of finance, whether it’s debt or equity.
If your Australian entity gets loans from its parent or investors, the loan interest must be commercial to be tax deductible. Furthermore, any equity must be properly disclosed in the local Australian accounts and correspond to the parent company’s treatment.
4. Consider your business structure
Choosing the correct business structure from the beginning provides significant economic and tax benefits. Your business concept, intended activities, and expansion goals will determine the optimal structure for your Australian operations. What is your employee-to-contractor ratio, for example? Will the parent firm import the items and clear them? Will the company bid on Australian projects?
Because different business structures imply different liabilities, you should additionally evaluate the local taxation, superannuation, and foreign taxation obligations that will apply. Switching can be disruptive and costly if your structure is incorrect, with lost GST credits, more administration, potential tax burdens, time delays, and missed opportunities.
5. Streamline communications
The daily reality of having internationally distributed teams necessitate sophisticated, cloud-based workflow and communication technologies that enable effective and transparent collaboration across borders. A proper communication and monitoring mechanism should also be in place so that the parent and local entities may set and meet realistic goals.
Join our B2B Summits to learn more.
Corporality Global hosts regular B2B events to empower businesses and explore various opportunities in Australia. Get the help you need, connect with investors and key decision-makers, and learn how to navigate current business challenges. Join our Corporality Global B2B Summits.
