How to Start a Business in Australia: A Guide for Foreign Businesses

When learning about steps to start a business as a foreigner in Australia, you must have an understanding of market entry rules, investment opportunities, tax compliance, and the legal requirements that apply to overseas founders. 

This guide gives you everything you need to confidently start a business in Australia, from registration steps to banking, visas, and compliance, so you can enter the market with clarity and set up your operations smoothly.

Key Takeaways:

• Australia welcomes foreign entrepreneurs with 100% ownership, strong infrastructure, transparent regulations, and strategic Asia-Pacific trade advantages supporting global business growth.
• Starting a business in Australia requires market research, choosing the right structure, meeting director residency rules, and securing required registrations and licenses.
• Foreign founders must understand GST, corporate tax, payroll, and compliance obligations, including BAS filings, ASIC reporting, employee entitlements, and ongoing bookkeeping.
• Banking, tax registration, and FIRB approvals can be challenging; foreign entrepreneurs benefit from early planning and expert guidance to avoid delays.
• Commenda streamlines incorporation, tax, compliance, and cross-border operations, helping businesses launch in Australia and expand globally through one unified platform.

Why Foreign Entrepreneurs Choose Australia?

Here are the key drivers that make business set up in Australia so attractive:

• Robust Economic Strength: Australia ranks among the top in infrastructure quality, with world-class logistics, transport, and legal systems that support global businesses.
• Ease of Doing Business & Investor Friendliness: Foreign investment is encouraged through well-defined frameworks overseen by agencies such as the Foreign Investment Review Board (FIRB).
• Trade Advantages & Strategic Location: Australia has a comprehensive network of Free Trade Agreements (FTAs), giving business set up in Australia preferential access to many major markets, especially in the Asia-Pacific. 
• Strong Governance & Legal System: As a stable parliamentary democracy with low corruption, Australia provides a transparent legal environment for foreign businesses. 

Understanding Market Entry Strategy in Australia

Before you understand how to start a business in Australia, developing a strong market entry strategy is essential. Here are some key components of a successful market entry strategy:

Research the Australian Market

Conduct in-depth market research to understand demand, pricing structures, and industry behaviors. The Australian Bureau of Statistics (ABS) also publishes reliable data on demographics, consumption patterns, and economic activity.

Identify Sectors Open to Foreign Investment

Australia welcomes foreign investment in most industries, though some are subject to review under the FIRB guidelines. High-growth industries relevant to starting a company in Australia include:

• Technology
• Renewable energy
• Agribusiness
• Healthcare
• Manufacturing
• Critical minerals

Understand Customer Preferences

Australia’s consumer base is highly diverse, tech-savvy, and driven by quality, transparency, and sustainability. The Australian Consumer and Competition Commission (ACCC) enforces strong consumer protection laws, shaping how businesses market and sell products. To align offerings with market expectations, review:

• Consumer trend reports
• Spending behavior
• Digital adoption patterns

Assess the Competition

Evaluating competitors is essential when setting up a business in Australia, especially in regulated or saturated sectors. Tools like industry reports, business registers, and government sector analyses support informed decision-making. Understanding both domestic and international competitors helps refine your value proposition and pricing approach.

Minimum Capital and Investment Options for Foreigners

While the country does not impose a strict minimum share capital for most company types, foreign investors must consider funding strategies, government thresholds, and visa-linked investment requirements to ensure a smooth business set up in Australia.

• Share Capital: For most company types, including proprietary limited companies (Pty Ltd), Australia does not require a minimum share capital. A company can be incorporated with a nominal share value.
• FIRB Thresholds: The key monetary thresholds are:
  • Sensitive Business Sectors (defense, telecommunications, media, or encryption): AUD 339 million
  • Non-Sensitive Business Sectors: AUD 1.464 billion
  • Foreign Government Investors: AUD 0

Funding Options for Foreign Entrepreneurs

Here are some significant funding options for foreign entrepreneurs:

• Venture Capital (VC) and Private Equity: Australia has a growing VC ecosystem supporting technology, healthcare, renewable energy, and innovative startups.
• Angel Networks: Local angel investor groups, such as Sydney Angels or Melbourne Angels, offer early-stage funding, mentorship, and networking opportunities for startups.
• Government Grants and Incentives: Foreign entrepreneurs may access grants or incentives like the R&D Tax Incentive or Entrepreneurs’ Programme, which provide co-funding or tax offsets for innovation and business expansion.

Choosing the Right Business Structure

Selecting the appropriate business structure is one of the first critical decisions when starting a company in Australia. Here are the common ones for foreign entrepreneurs:

Legal, Residency, and Immigration Requirements

Australia welcomes foreign ownership, but certain legal and residency conditions must be met. 

• 100% Foreign Ownership: Foreigners can own 100% of an Australian Proprietary Limited (Pty Ltd) company in most sectors. Certain sensitive industries may require FIRB approval.
• Local Director or Agent Requirement: Proprietary companies must have at least one director who ordinarily resides in Australia. For public companies, at least two directors must reside in Australia.
• Registered Office and Agent: Every company must maintain a registered office in Australia where official communications and legal documents can be served. A local registered agent can assist with compliance and correspondence if founders are overseas.

Visa and Residency Options for Foreign Entrepreneurs

Foreign entrepreneurs have several visa pathways depending on investment, business size, or remote work preferences:

Business Innovation and Investment Visa

• What You Can Do: This visa lets you:
  • Stay in Australia for the visa’s validity period
  • Operate a new or existing business in Australia
  • Work and study in Australia
  • Attend free English classes (Adult Migrant English Program), if eligible
  • Travel freely in and out of Australia while the visa is valid
  • Bring eligible family members (dependents)
• Duration of Stay: This is a provisional visa.
  • If you were invited on or after July 1, 2021, you can stay up to 5 years from the date of the grant.
  • If you were invited before July 1, 2021, the stay allowed is 4 years and 3 months.
  • The visa is multiple-entry, so you can leave and return to Australia while it’s valid.
• Obligations During the Visa Period: Must maintain substantial ownership in an Australian business and participate in its day-to-day management at a senior level. Your business should:
  • Increase commercial activity/competitiveness in Australia, or
  • Develop links to international markets, or
  • Employ people in Australia, or
  • Export goods, or
  • Introduce new or improved technology, or
  • Produce goods/services that Australia would otherwise import

Business Visitor Visa

• What You Can Do: This visa lets you:
  • Make general business or employment enquiries. 
  • Negotiate, review, or enter into business contracts.
  • Participate in activities as part of an official government visit.
  • Attend conferences, trade fairs, or seminars (but you cannot be paid by the organizers). 
  • Do tourist activities during your stay. 
• Duration of Stay: This visa offers:
  • The standard stay is up to 3 months, in line with many official sources.
  • You may get a single-entry or multiple-entry visa. With multiple entries, you can leave and return while the visa is valid.
  • Note: You can’t extend this visa. If you want to stay longer, you must apply for a different visa.
• Obligations During the Visa Period: You must obey all visa conditions and Australian law. There may be a “No Further Stay” condition (8503) depending on your visa. Health insurance is strongly recommended because you are liable for your own medical costs.

Foreign Investment Restrictions and Business Incentives

When starting a company in Australia, understanding both sector-specific restrictions and available incentives is crucial. While Australia is generally open to foreign investment, certain industries are regulated to protect national interests. At the same time, the government actively encourages investment in innovation, renewable energy, and export-oriented sectors, offering financial incentives, tax benefits, and grants to foster growth.

Sectors with Foreign Investment Restrictions

Foreign ownership is generally allowed, but some sensitive sectors require approval under the FIRB:

• Defence and Defence-Related Industries: Investments in defense technology or manufacturing are subject to strict FIRB review.
• Telecommunications and Media: Ownership and control thresholds are capped, and FIRB approval is required for acquisitions beyond specific limits.
• Agriculture and Land Acquisition: Foreign investment in agricultural land may require government approval depending on size, location, and type of land.

Sectors with Incentives for Foreign Investors

The Australian government encourages foreign investment in strategic growth sectors through grants, tax incentives, and support programs:

• Renewable Energy and Clean Technologies: Investment in solar, wind, hydrogen, and other clean energy projects is supported through grants and concessional funding.
• Export-Oriented Businesses: Export Market Development Grants (EMDG) reimburse eligible export promotion costs, supporting foreign and local entrepreneurs alike.
• Special Economic Zones and Enterprise Hubs: Certain regions, like advanced manufacturing hubs or innovation precincts, offer tax concessions, streamlined approvals, or co-location facilities for foreign investors.

Opening a Bank Account and Managing Cross-Border Payments

Once you have completed the initial steps of starting a company in Australia, opening a business bank account is essential for managing operations and cross-border transactions. 

Documentation Required

Foreign entrepreneurs must provide standard identification and corporate documentation to open an Australian business bank account:

• Know Your Customer (KYC) Requirements
  • Valid passport or government-issued ID for all directors and beneficial owners.
  • Proof of residential address (utility bills, bank statements).
• Company Registration Documents
  • Certificate of Incorporation issued by ASIC.
  • Australian Business Number (ABN) registration.
  • Constitution or company rules (if applicable).
• Business License or Sector-Specific Permits

Managing Multi-Currency Accounts and Payments

Many Australian banks offer multi-currency facilities, which are useful for businesses with overseas suppliers or clients. They allow holding, sending, and receiving multiple currencies without excessive conversion fees.

Some popular local payment gateways include PayPal Australia, Stripe, and Square for receiving online payments. Their integration with accounting systems can streamline cash flow management.

Taxation and Compliance for Foreign-Owned Businesses

Foreign entrepreneurs starting a company in Australia must understand the country’s taxation framework to remain compliant and optimize operations. 

• Corporate Income Tax: Non-resident companies are taxed only on Australian-sourced income. The corporate tax rate is 25% for base rate entities and 30% for large companies.
• Goods and Services Tax (GST): GST is a 10% value-added tax on most goods, services, and digital products sold in Australia. Businesses with an annual turnover of ≥ AUD 75,000 must register for GST.
• Payroll Taxes and PAYG Withholding: Employers must withhold tax from employee salaries under the PAYG system. Superannuation contributions are mandatory for eligible employees. Payroll tax is state-based; thresholds and rates vary across Australia.
• Import Duties and Customs: Duties apply to goods imported into Australia, depending on product classification and country of origin. Compliance includes proper HS codes, valuation, and reporting to the Australian Border Force (ABF).

Hiring Employees and Payroll Compliance

Foreign entrepreneurs must comply with workplace regulations, wages, social contributions, and payroll tax, whether hiring locally or managing remote teams.

• Employment Contracts: Every employee must have a written contract outlining job role, salary, working hours, leave entitlements, and probation periods.
• Minimum Wage and Conditions: Australia has a national minimum wage. As of 2025, it is AUD 24.95 per hour or AUD 948 per week. Pay scales may vary according to industry awards, and overtime, allowances, and penalty rates may apply.
• Local Payroll Tax: Payroll tax is levied by individual states on wages above a set threshold. Rates vary by state.
• Remote Hiring or Entity Options: Foreign businesses can hire remote employees without establishing a local entity, though this may require contractor arrangements and compliance with international tax rules.

Setting Up Operations and Staying Compliant

Proper systems, reporting, and insurance protect your company and maintain its good standing with authorities. 

• Registered Office: Every company must maintain a registered office in Australia for official correspondence and service of documents. The address must be physical (not a P.O. Box) and kept up to date with ASIC.
• Accounting System and Bookkeeping: Businesses are required to maintain accurate financial records to comply with the Corporations Act and tax obligations. A robust accounting system ensures proper tracking of revenue, expenses, payroll, and GST.
• Insurance Requirements: Key insurances include workers’ compensation (mandatory in all states), public liability, and professional indemnity, depending on the industry.
• Ongoing Reporting and Compliance: Annual ASIC company statements, tax returns, payroll reporting, and superannuation obligations must be filed on time to avoid penalties.

Maintaining Your Business in Good Standing

After successfully starting a company in Australia, maintaining good standing is critical for legal compliance, reputation, and operational continuity.

• Annual Returns and ASIC Filings: Companies must submit an annual company statement to ASIC, confirming details like directors, shareholders, and registered office.
• Renewal of Licenses and Permits: Industry-specific licenses must be renewed periodically (e.g., financial services, import/export, healthcare).
• Tax Filings: Annual corporate tax returns, quarterly Business Activity Statements (BAS) for GST, PAYG withholding, and payroll tax filings are mandatory.
• Audits and Financial Reporting: Certain companies, such as public companies or large proprietary companies, are required to submit audited financial statements.

Finding Local Partners, Accelerators, and Support Networks

Building a strong local network is a key component of starting a company in Australia. Foreign entrepreneurs benefit from connecting with local partners, accelerators, and support organizations.

• Chambers of Commerce: It provides opportunities for networking, advocacy, and business education.
• Startup Accelerators and Incubators: They offer programs such as Startmate, Cicada Innovations, and muru-D offer mentorship, seed funding, and access to industry networks.
• Government Trade and Investment Agencies: Austrade assists foreign businesses with market insights, sector opportunities, and networking events.
• Professional Networking Events: Industry conferences, seminars, and trade fairs allow foreign entrepreneurs to meet potential partners, investors, and clients.

How to Close or Sell Your Business in Australia?

Even after successfully starting a company in Australia, there may come a time when foreign entrepreneurs need to close, sell, or merge their business. Understanding the legal, tax, and employee obligations is crucial to ensure a smooth exit while maintaining compliance. 

• Deregistration: Suitable for solvent companies that no longer wish to operate.
• Liquidation: Required for insolvent companies unable to pay debts.
• Employee Obligations:
  • Final payments must include outstanding wages, accrued leave, and superannuation contributions.
  • Redundancy entitlements may apply depending on employee tenure.
• Tax and Reporting Requirements:
  • Final BAS and corporate tax returns must be filed with the ATO.
  • Clearance certificates or tax reconciliations may be required before deregistration or sale.
• Mergers and Acquisitions (M&A):
  • For selling or merging the business, due diligence, valuation, and contractual agreements are critical.
  • Compliance with corporate law, employment transfer obligations, and tax reporting is mandatory.

Challenges Foreigners Commonly Face

While starting a company in Australia offers many advantages, foreign entrepreneurs often encounter unique challenges when navigating legal, financial, and operational systems. Understanding these pain points in advance can help you proactively plan solutions.

• Understanding Complex Regulations: Understanding company structures, FIRB approval, and employment law can be overwhelming for first-time foreign founders.
• Banking Delays: Non-resident founders may face delays in opening business bank accounts due to KYC and compliance requirements.
• Tax Registration and Compliance: Registering for GST, corporate tax, PAYG, and payroll can be confusing, particularly for cross-border operations.
• VAT/GST Complexity for Export-Oriented Businesses: Correctly calculating GST on domestic and international sales, claiming credits, and filing BAS statements can be time-consuming.

Why Choose a Cross-Border Platform Instead of Local Agents?

Engaging separate providers for company registration, banking, tax compliance, and payroll can lead to fragmented processes, higher costs, and communication delays. It leads to:

• Multiple Points of Contact: Using different local agents for accounting, legal, and tax matters often results in miscommunication and slower responses.
• Inconsistent Compliance Practices: Local advisors may follow different processes or interpretations of the law, increasing the risk of errors and penalties.
• Higher Costs and Redundant Work: Paying separate providers for similar tasks across jurisdictions can increase fees and duplicate effort.
• Limited Cross-Border Insight: Local agents may lack visibility into international tax treaties, transfer pricing, or multi-country VAT/GST compliance, which are crucial for foreign entrepreneurs.

Keeping this in mind, the advantages of a centralized platform include:

• Unified Incorporation and Compliance: Manage company registration, tax filings, VAT/GST, payroll, and licenses for Australia and other countries from a single dashboard.
• Automated Alerts and Reporting: Receive timely reminders for filings, deadlines, and compliance obligations to avoid penalties.
• Cross-Border Expertise: Access international tax knowledge, local regulatory guidance, and multi-jurisdiction compliance without juggling multiple advisors.
• Cost Efficiency and Scalability: Reduce fees by consolidating services and scale operations to additional markets without setting up separate providers in each country.

How Commenda Helps You Start and Scale Globally

Scaling a business internationally can be complex, especially for foreign entrepreneurs. Commenda simplifies global expansion by offering a single platform that integrates incorporation, tax management, and compliance across multiple jurisdictions. This allows founders to focus on growth rather than administrative hurdles.

• One-Click Incorporation in Multiple Jurisdictions: Launch your business in Australia and 30+ countries with a streamlined, automated process.
• Global VAT and U.S. Sales Tax Management: Track, calculate, and file indirect taxes accurately across borders from a unified dashboard.
• Automated Compliance Tracking: Receive alerts and reminders for regulatory filings, deadlines, and license renewals to stay in good standing.
• Dedicated Support for Cross-Border Entities: Access expert guidance for multi-jurisdiction operations, banking setup, payroll, and reporting.

Book a demo today to start your business in Australia and scale globally with Commenda.

FAQs

1. Can foreigners own 100% of a company in Australia?

Yes, foreign entrepreneurs can fully own most proprietary limited (Pty Ltd) companies in Australia. Certain sensitive sectors, such as defense, telecommunications, and media, require approval from the Foreign Investment Review Board (FIRB).

2. What are the visa or residency requirements to start a business?

Foreigners can establish or manage a business in Australia through visas such as:

• Business Innovation and Investment Visa (Subclass 188/888): For investors and entrepreneurs.
• Entrepreneur Visa: For individuals with funding to develop a high-value business.
• Temporary work visas may allow initial operations before permanent residency.

3. What’s the minimum capital needed to start a business in Australia?

There is no strict minimum capital requirement for most business structures. However, visa programs such as the Investor Stream of the Business Innovation and Investment Visa may require a minimum investment (e.g., AUD 1.5 million for the Investor Stream).

4. How are foreign-owned companies taxed in Australia?

• Resident companies pay corporate tax on worldwide income (25–30% depending on size).
• Non-resident companies are taxed only on Australian-sourced income.
• GST at 10% applies to most goods and services, and payroll tax applies at the state level.

5. What incentives are available for foreign investors?

Foreign investors may benefit from:

• R&D Tax Incentive for innovation activities.
• Export Market Development Grants (EMDG) for export promotion.
• Grants and funding for renewable energy or clean technology projects. 
• Access to special economic zones and innovation precincts.

6. How can I open a bank account as a non-resident?

Non-resident founders must provide:

• Company registration documents (Certificate of Incorporation, ABN).
• KYC identification (passport, proof of address).
• Business license or sector-specific permits (if applicable).

Banks may require a local director or representative, and services like Commenda can help facilitate account setup.

7. What are the ongoing compliance obligations for foreign businesses?

Foreign-owned companies must:

• Submit annual company statements to ASIC.
• File corporate tax returns, GST/BAS, and payroll reports.
• Maintain registered office and bookkeeping records.
• Comply with employment, superannuation, and sector-specific regulations.

8. How does Commenda simplify cross-border incorporation and global tax compliance?

Commenda provides a centralized platform to:

• Incorporate businesses in Australia and 30+ other countries.
• Automate VAT/GST, U.S. Sales Tax, and multi-jurisdiction compliance.
• Track deadlines, filings, and licenses with automated alerts.
• Provide expert support for banking, payroll, and ongoing regulatory compliance.