How Foreigners Can Start a Small Business in Australia
Written by Bindi Gethen
Taking the plunge and starting a business in another country can feel like being dropped in the middle of a foreign movie without subtitles – you’re excited, fascinated, and probably a little bit terrified. It’s like stepping off a plane into a city where you don’t know a soul, don’t speak the language, and the only map you have is the one you drew on a napkin.
So can a foreigner start a small business in Australia? Yes, a foreigner can indeed start a business in Australia, but there would be a tedious process. You’ll need to secure the right visas, obtain the necessary legal documents, and register your business with the Australian Securities and Investments Commission (ASIC).
Can a foreigner start a small business in Australia?
Yes, a foreigner can certainly start a small business in Australia, but it’s not a simple “yes” or “no” scenario. It involves a process, often challenging and intricate, that requires a detailed understanding of various moving parts.
The first step is to form a clear idea of your brand and business model. Next, you’ll need to secure the appropriate visa. Then, apply for necessary legal documents, licences, and permits (e.g., Australian Business Number (ABN), Tax File Number (TFN), Goods and Services Tax (GST) registration, and any industry-specific licences. And finally, register your business with the ASIC.
Related articles:
Step-by-Step Guide on Starting a Small Business in Australia
How to Start a Small Business in Australia
Starting a business in Australia as a foreigner
1. Form a solid idea of your brand and business model
Your journey begins with a business idea. However, this idea must be far more robust than a fleeting thought. It has to be a holistic understanding of your brand and your business model.
The brand is the entity that gives your business a unique identity. It differentiates you from competitors and generates a bond with your customers. The business model, on the other hand, is the plan for how your business will operate, generate income, and be sustainable. I recommend honing in on your unique value proposition (what you offer that others don’t). Don’t forget about your revenue streams and cost structure.
As a foreign entrepreneur, you’ll also have to identify your stakeholders – those who are affected by or can affect your business. These could be customers, suppliers, employees, shareholders, and the broader community. Knowing who your stakeholders are will influence your decision-making processes and help foster positive relationships.
Your board of directors will also be crucial in shaping your strategic direction and ensuring compliance with legal and corporate responsibilities. Board members should be selected for their expertise, experience, and alignment with your business values.
A physical business address in Australia is also important. Even if you plan to operate largely online, a registered Australian address adds credibility and is often a requirement for legal and banking processes.
2. Figure out the visa process
A visa serves as your official permit to stay and operate a business in Australia. The type of visa you need depends on several factors, including your country of origin, the nature of your business, and the duration of your stay.
There are multiple business visa categories available for foreigners looking to start a small business in Australia. These include the Business Innovation and Investment visas (subclass 188 and 132), and the Business Owner visa (subclass 890). Each has its own set of eligibility criteria, conditions, and benefits, and it’s essential to thoroughly research each one to determine the most suitable for your situation.
3. Apply for legal documents, licences, and permits
The process of applying for legal documents, licences, and permits varies greatly depending on the nature of your business. Here are the key legal documents you would generally need to apply for:
Australian Business Number (ABN): An 11-digit number that identifies your business to the government and community.
Tax File Number (TFN): Required for all businesses to file income tax returns and make workers’ compensation payments.
Goods and Services Tax (GST) Registration: Required if your business has a GST turnover of $75,000 or more.
Pay As You Go (PAYG) Instalments: You’ll need to register for this if you plan to withhold tax from employee payments or if your business earns over a certain threshold.
Food Business License: Required if you’re opening a restaurant or cafe.
Liquor Licence: Required if you plan on selling alcohol.
Building Permit: Required if you plan on constructing or altering a building.
Professional Licences: Some industries require special licences or certifications.
Check out these articles about the legal essentials and government permits you need to secure.
Pro tip
There may be additional requirements based on the nature and location of your business. Always check with local authorities.
4. Register business with the ASIC
This ASIC registration process involves choosing your business structure (sole trader, partnership, or company), as well as choosing and reserving your business name.
Deciding on a business structure is essential as it determines your legal obligations, including what taxes you’ll pay, your ability to borrow money, and your personal liability in the business. Similarly, choosing a business name is vital as it not only identifies your business but also has potential marketing implications.
Learn more about starting a business in Australia with The Bookkeeping Studio
Remember, Rome wasn’t built in a day, and neither is a successful business in Australia. But with the right partner by your side (that’s us, by the way), you can turn this dream into a reality.
With The Bookkeeping Studio, you’re not alone in this journey. We specialise in providing comprehensive financial support tailored to the needs of international entrepreneurs like you. Our seasoned experts offer insights into Australian tax laws, financial planning, compliance, and much more. Let’s make your Australian business dream come true today.
Hey, my name’s Bindi Gethen! I’m the founder of The Bookkeeping Studio in Australia. With over 15 years of experience in the industry, I have a deep understanding of the challenges that small and medium-sized business owners face when it comes to managing their finances.
I am passionate about empowering my clients with the financial information they need to succeed. My team and I pride ourselves on our commitment to exceptional value, accuracy, and confidentiality. Our virtual bookkeeping services include payroll, budgets, and management reporting, among others.
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