Good to Great: How to Scale With an Outsourced CFO

Moving your business to Australia is an attractive idea for a variety of reasons. Whether you’re moving for the prosperous economy, the beautiful landscape, healthy lifestyle, and even the promise of backyard cricket, it’s important to understand the basics of business migration. The more you prepare for in advance, the smoother your transition will be.

The following are the basics of moving your business to Australia: what you need to know as you make decisions and plans.

 

Taxation

Foreign residents in Australia are taxed on their Australian-sourced income. However, there are a few exceptions to this rule. You don’t have to pay taxes on interest, dividends, or royalties from which withholding tax has been withheld, and you also don’t have to pay taxes on fully franked dividends. If you have questions about these exceptions, talk with your Altus adviser.

Just as there are residency requirements for people, there are also residency requirements for companies, trusts, and corporate limited partnerships. If a business is incorporated in Australia, it’s a resident business. Likewise, if it’s not incorporated in Australia but carries on a business in Australia and has its central management in Australia, it’s considered a resident business and will be taxed accordingly.

 

Employing Workers in Australia

As in other countries, you’ll have tax obligations for the people you employ in Australia. Employers are required to contribute to superannuation, Australia’s retirement planning program. You’ll also be responsible for PAYG (pay as you go) withholding, which you must remit to the Australian Taxation Office on a regular basis.

In addition to handling superannuation and taxes, business owners in Australia check to make sure their employees are legally allowed to work in the country. In general, Australian citizens, New Zealand citizens, and permanent residents are allowed to work. Foreign nationals may be able to work at your business, but you’ll need to carry out further checks to confirm that they have a visa that allows them to work in the country. 

Finally, as an employer in Australia, you’ll need to learn about the differences between hiring employees and hiring contractors. This is an important distinction because it affects the way you tax, collect superannuation funds, and other employer obligations.

 

Record Keeping

Once you’ve set up your business and hired your workers, you’ll need to keep ongoing records for your business that correlate with Australian Standard Business Reporting (SBR). These can be kept electronically or on paper. If you go the electronic route, you’ll want to talk to your business adviser about which software systems will work best for your business while maintaining the reporting standards necessary.

As you work through the basics of your business move to Australia, reach out to Altus Financial for help and advice. We can help you with employee issues, record keeping, taxation, and any other concerns you have as you establish your business in Australia.