Good to Great: How to Scale With an Outsourced CFO

With a resilient economy, steady population growth, and a highly-skilled and diverse workforce, Australia is a great place to start a business.

Some people set up business in Australia because they want a new start in a new place; others have experienced business success in other places and want to expand their operations into a new market. Whatever the reason, know that setting up a business in Australia is not only achievable (with the right advice), but it can also be a great strategic move.

 

How to Set Up Business in Australia

Different experts recommend different ways to go about setting up a business in a new market. We propose a planning process that includes the following eight steps.

1. Select an Area

Before you can begin market research and all that follows, you need to select an area. Australia’s major cities have thriving technology industries as well as the industries that generally accompany large urban populations. You’ll want to look at Australia’s states and territories to see which are the most attractive for your business. Natural resources, market preferences, geography, population density, infrastructure, and local laws and regulations should all play a part in your decision.

2. Perform a Market Analysis

Once you have chosen an area, analyse its market attractiveness for your services and products. You can use tools like ‘Porter’s 5 Forces’ and even a SWOT analysis to come to your conclusions. If your business is currently operating in another part of the world, compare the market conditions of your current location to those of your proposed location in Australia. You may need to look at getting an industry expert on the ground to help you.

3. Consider Market Entry

Thinking about your current business model, consider any adjustments you’d have to make in order to move your operations to Australia. For example, are there adequate suppliers in the area where you plan to operate? Do you plan on exporting your products? If so, what are your export options? Would it make sense to acquire an existing local business in order to capture their expertise and current customers?

4. Think About Positioning

In all likelihood, you’ll immediately face competitors, but how will you be positioned in comparison to these competitors? Do you want to be the affordable option for budget-conscious consumers? Do you offer anything unique that your competitors don’t have? Your positioning will affect your overall business strategy and the way you structure your organisation.

 

 

5. Target Your Customers

Consumer demands and preferences vary from place to place. Will you be targeting the same demographic group in Australia that you targeted overseas? You may want to consider conducting surveys or finding out who your competitors are targeting with their advertising and marketing.

6. Evaluate Your Products and Services

With a firm understanding of your market and the people you’ll be selling to, you can take a closer look at your current offerings and see if you need to make adjustments for your new market. Some businesses find that they need to augment or change their products or services when they move to Australia. Others realise that their product lifecycles need to be adapted to their target customers.

7. Evaluate Your Strategy and Core Competencies

When you start your business in Australia, will you have the resources and skills necessary to achieve your objectives? Will you need to bring people with you? Or do you plan on hiring locally in Australia?

8. Analyse Your Supply Chain and Value Chain

Take the time to analyse all of the elements of your supply chain. If your supply chain is disrupted, you may have a difficult time operating. In addition to producing, importing, and exporting, consider your franchising options, license requirements, taxes, and government regulations.

 

How to Move Business to Australia

Moving your business to Australia requires several administrative tasks. First of all, you’ll need to decide what kind of structure to use for your business. Will you register it as a branch, a partnership, a company or a trust?

Obligations to Employees

In Australia, employers are responsible for contributing to superannuation (Australia’s retirement planning program). Employers must also remit income taxes as well as pay as you go (PAYG) withholding.

Additionally, you’ll need to verify that the people on your payroll are legally allowed to work in Australia. For starters, Australia and New Zealand citizens may work in Australia, and permanent residents may also legally work for you. You’ll also need to be careful about distinctions between contractors and employees; this differentiation makes a difference in the way you collect and remit taxes.

Tax Considerations

Foreign residents in Australia are taxed on their Australian-sourced income, so it’s important to understand taxation as you set up your business. Be aware that the Australian tax system levies the following taxes:

• Income tax
• Capital gains on businesses and individuals
• Fringe benefits tax
• Dividends paid by Australian companies
• Payroll taxes
• Land tax
• Customs duty
• Stamp duty 

It’s wise to talk about taxation with an adviser to find out how your specific business would be affected. Again, it can be helpful to compare your current situation with your prospective situation in Australia so you can make any adjustments to your business model as necessary.

Residency

When it comes to companies, trusts, and corporate limited partnerships, there are residency requirements to consider. Businesses incorporated in Australia are considered “resident businesses.” A business can also be considered a resident business if it’s not incorporated in Australia but its central management resides in Australia. Residency is important to consider because it affects how your business is taxed by the ATO.

Record Keeping and Accounting

Australia is working toward a standardised approach to online and digital record keeping. Standard Business Reporting (SBR) is being developed to simplify reporting obligations. We recommend using a cloud-based accounting and bookkeeping system for keeping track of your business’ financial records.

Even if you’re a business expert in your home country, you may still benefit from the expertise of an Australian business adviser as you consider your business options in Australia. Reach out to us at Altus Financial. We love to help businesses through this exciting transition.