Investing in Australia: What foreign businesses and investors should know before they expand

Choosing the right structure

An Australian subsidiary, registered foreign company (branch), or joint venture may each be appropriate depending on the circumstances. The right structure should reflect commercial objectives as well as taxation, asset protection, funding, governance, profit repatriation, and eventual exit plans.

Restructuring after an investment has been made can be more complex and costly. Early planning can provide valuable flexibility as Australian operations grow.

Tax and employment considerations

Company income tax is only part of Australia’s tax landscape. Depending on the activities and structure involved, the following items may also require consideration: goods and sales tax, PAYG income tax withholding, fringe benefits tax, state and territory payroll tax, capital gains tax, transfer pricing, double taxation agreements ,and international tax rules.

Employing staff introduces further obligations, including superannuation, workplace laws and payroll reporting. Where employees relocate internationally, residency status, visa arrangements and length of stay can also affect tax outcomes, so it is important to have coordination between tax, employment, and immigration advisers.

Corporate reporting and audit

Corporate reporting requirements should also be considered from the outset. Certain entities may be required to prepare audited financial statements or lodge financial reports with the Australian Securities and Investments Commission (ASIC).

Whether an audit is required depends on factors including the entity’s size, structure, and ownership. Relief or exemptions may be available in some circumstances, including for some foreign-controlled entities, but timing can be critical.

Acquiring Australian assets

Foreign investors considering Australian businesses, commercial property, or development opportunities may also need to navigate Australia’s foreign investment framework. Approval requirements vary according to factors including the investor, investment type, monetary thresholds, and national security considerations.

Property investment can bring additional state-based stamp duty and land tax implications. The ownership structure selected at acquisition may also affect financing, taxation, and an eventual sale.

Planning before investing

Common problems often stem from an unsuitable structure, underestimated compliance requirements, or assumptions that overseas tax and employment rules operate similarly in Australia.

Successful market entry is rarely about moving quickly. Careful planning before significant commitments are made can reduce avoidable restructuring and compliance issues and create a stronger platform for long-term growth.

Cross-border expansion can also require coordinated advice across jurisdictions. Through international professional networks such as GGI, advisers in Australia can collaborate with advisers in an investor's home jurisdiction so that local decisions support the broader objectives of the business.

For businesses considering Australia, the key is to seek appropriate tax, legal, and commercial advice before locking in significant decisions. Getting the foundations right at the outset can make establishing, operating, and ultimately growing an Australian presence considerably more straightforward.

---

Gary Williams is a director at Rosenfeld Kant with over 30 years of experience in audit, tax, and advisory. He works with privately owned and growth-stage businesses, with specialist expertise in complex audit requirements, including the film and media sector.