Trading from your existing legal entity at home provides a low-cost and low-risk entry mode into the Australian consumer market. Selecting this option also means you will continue to be bound by familiar domestic laws. However, exporting into Australia can be complex and therefore you will need to be aware of all applicable customs procedures and relevant taxes. Please see our logistics page for further information. Of particular relevance here is the Australian goods and services tax (GST), which applies to most goods, services and other items consumed in Australia. If you bypass certain monetary thresholds when selling to Australian consumers, you may become liable to pay GST. In such a case your business will need to be GST-registered. Where this is the case, it is advisable to establish a branch office by registering as a foreign company. A branch office does not constitute a legal entity in Australia, and so your existing company will remain liable for all debts and credits accrued by the Australian branch. Foreign companies are, however, subject to administrative requirements and the filing of annual accounts.
Establishing a legal entity in Australia offers businesses full market access. Once registered with the Australian Securities & Investments Commission (ASIC) as an Australian company you can conduct business throughout Australia without the need to register in individual states and territories. Third parties are also more likely to deal with Australian companies. Foreign investment into Australia is generally encouraged and is regulated by the Foreign Investment Review Board (FIRB). Whether or not notification is required depends on the type of investor, type of investment, industry sector and the value of the proposed interest. FIRB has 30 days in which to block any proposal, and permission is normally granted unless the proposal is judged to be contrary to the national interest. Where notification is not required a company can be set up in just 2 days. Once established as a legal entity you will need to be familiar with and abide by all Australian laws and taxes.
|Corporation Tax||28.5% – 30%||The corporate profits tax rate is 30% for all companies, however for income periods starting from 1st July 2015 onwards, there is a 28.5% small business rate. This is for companies whose aggregated turnover is less than $1.5million (USD) for the year.|
|Capital Gains Tax – For Companies||28.5% – 30%||Capital gains are subject to tax at the normal relevant corporation tax rate.|
|Withholding Tax – Dividends||0-30%||Withholding tax on unfranked dividends (dividends on which an Australian company has not paid tax) is levied at 30%. For franked dividends (dividends where an Australian company has already paid the relevant tax) there is no withholding tax levied.|
|Withholding Tax – Other Interest||0-10%||There is no withholding tax for residents, however where a tax payer number is not quoted, a 49% withholding tax rate applies. For non-residents, a 10% withholding tax rate applies.|
|Value Added Tax||0-10%||The federal government levies GST at a rate of 10% and distributes the revenue to state governments. GST is a value added tax (VAT). Most food, health and educational supplies are exempt and so zero-rated for GST purposes. There are additional taxes in addition to GST on certain goods – i.e. Wine Equalisation Tax and Luxury Car Tax -for which different rules apply.|
|Social Tax on Employee’s Salaries||Various||Different states and territories apply different payroll tax rates depending on the total value of the annual payroll. For example, New South Wales has an annual exemption of $546,000 (USD), after which a payroll tax of 5.45% is payable, whereas Victoria has an annual exemption of $400,000 (USD) and a tax rate thereafter of 4.85%. In addition, employers are required to pay 9.5% of the employee’s gross salary into a superannuation or retirement savings fund.|
|Currency Exchange Control – Cash||USD $7,300||Individuals are permitted to carry a maximum of $7,300 (USD) in cash into and out of Australia, without the need to declare they are doing so.|
|Currency Exchange Control – Bank Transfer||N/A||There are generally no restrictions on payments to foreign entities or individuals through normal banking channels.|
In Australia, national privacy legislation is overseen by the Office of the Australian Information Commission (OAIC). The key Australian Privacy Principles (APPs) set out in the legislation provide for restrictions on the collection, use, transfer and disclosure of personal information. The APPs impose obligations on organisations to keep data secure, accurate and up to date, and companies must provide data subjects with access to their privacy policies. When handling personal information, organisations also need to be aware that specific legislation applies to different activities, and rules also vary across different sectors. In addition, States and Territories have their own individual laws that may apply in particular jurisdictions.
The SPAM Act 2003 prohibits all unsolicited electronic communications in Australia. The legislation provides that businesses must both obtain the consent of intended recipients and clearly identify themselves with accurate contact details that will remain valid for at least 30 days after the sending of an email. Businesses must also provide the option to ‘opt-out’ of receiving further emails. Significant fines may become payable by businesses found to be acting in contravention of these regulations. Further legislation also exists prohibiting bait advertising, and any claim made by a business in an advertising campaign must be substantiated by evidence.
Australian legislation provides comprehensive protection of intellectual property rights (IPR), and – as a member of the WTO – provides equal treatment of its own nationals and foreigners. Australia operates a ‘first-to-file’ system, and so sellers are encouraged to check whether the same and/or similar trademarks have already been registered before exporting goods to Australia. Equally, you must check that you are not infringing the IPR of other parties, as IPR owners can receive the assistance of customs authorities to prevent imports of counterfeit and pirated goods. Australia is also a signatory of the Madrid Protocol, the International Trademark System, which offers a one-stop solution for registering your trademarks all in one place, for one set of fees, ultimately protecting your mark in the territories of all its members across the world.
The Australian Consumer Law (ACL) lays down the framework for the protection of consumer rights in Australia. The legislation covers unfair contract terms, consumer rights guarantees, product safety laws and unsolicited consumer agreements, and the rules apply across all States and Territories and to all Australian businesses. Further protection is also provided to consumers in the form of the Competition and Consumer Act 2010, which provides for a general ban on misleading, deceptive and unconscionable conduct in trade or commerce. In addition, any unfair contract terms are considered void, certain pricing practices and pyramid selling schemes are prohibited and obligations are imposed on sellers to provide consumers with proof of transactions.
The ACL also specifically governs e-commerce transactions, setting out that websites must give clear descriptions of products, provide detail on all costs to be incurred including delivery, insurance and any credit card charges, and provide information on exchanges, refunds and warranties. Sellers must also keep records, which must be accessible and in English, for up to 5 years.
A national statutory framework also exists to regulate product safety and information standards with the purpose of ensuring that harmful products are not marketed in Australia. Sellers must ensure that:
Their goods are compliant with the relevant consumer guarantees;
Almost half of Australian consumers report that they trust domestic online stores over international ones
Online payment preferences differ depending upon whether an Australian consumer is purchasing from a domestic or foreign online shop.
As the 6th largest country in the world, getting to grips with the Australian logistics infrastructure can be a challenge