The country and continent of Australia are rich in multiple natural resources, especially iron and coal. It also has gold and natural gas, and these natural resources have an enormous impact on the Australian economy. Understanding the economic makeup and the movement of “big money” are important to understanding Australia, or any other market, especially if you are planning on launching your company there.
Understanding and Navigating the Australian Market
Whether or not you have a business set up in another country or if you are planning on launching a company in Australia, there are a few things you have to understand, starting with your target audience.
Whether you are a B2B or B2C company, it’s essential to understand that Australians pride themselves in developing an egalitarian society, and the corporate culture is relatively laid back. These two things can help you navigate your corporate and customer relationships better.
Focusing on strict hierarchies, rigid and formal communications, or boasting about your success/differentiators may not work well in your favor. Instead, humility and subtlety in everything, from marketing to business communication, may serve you better. That said, it’s important to remember that Australians can also be direct and to the point, so try and seek the right balance when connecting with your target audience.
Australia is large, and most of the population (over 70%) lives in eight major cities. Based on your target market and how it’s spread out, Australian geography can be a significant factor to consider when launching your product. If your business is centered in one of the major cities and you mostly connect with your customers online, then it won’t be a major consideration. But if you are delivering a product all over Australia, the transportation costs must be considered.
Australia has one of the highest tax rates among the G20 countries – 30% for corporations, though small to medium-sized businesses have a reduced tax rate of 25%. You should also look into the taxation related to selling products/services within the country and any tax you may be subject to if you export your products.
Labor laws in Australia are quite similar to most global economies, though the working hours are relatively lower (38 hours a week). Employees are allowed to form or join unions. As an employer, you can hire and dismiss employees following proper procedure and may establish baseline performance standards in the workplace.
You should also look into the compliance laws associated with establishing a business entity and regulations that apply specifically to the industry you are operating in. For example, the financial sector may have different compliance requirements than tech companies, with more oversight and regulatory exposure built into the business model.
Demand and Supply Dynamics
Another important facet of the Australian market you have to understand is the demand and supply dynamics. From an import and export perspective, China is Australia’s largest trading partner. It accounted for about 29% of the country’s imports in 2022 and about 36% of the exports, mostly iron and coal. So, if you are joining the mining or export sector, having someone on the staff who understands the Chinese market and knows the language can positively impact your business.
If you are primarily serving the domestic market, you will have to understand consumer needs and wants, and the scope of the demand and supply dynamics you will have exposure to will depend upon your products/services. If your business is tied to discretionary spending, then factors like high-interest rates and economic stresses in the country might harm your business.
Setting Up Your Company in Australia
Starting a business in Australia and launching your company is relatively easy. You have to start with the right business structure that suits your needs. The three most common business types are sole traders, partnerships, and a company. If you want more privacy, you may also opt to operate through a trust, but it has limitations.
If you launch a company, you must decide on a name that is not already taken. A company in Australia needs at least one director, and public companies need at least three directors. Companies in Australia can choose to have more flexible “replaceable rules” to guide how they operate or a more formal “constitution.” The next step is developing a basic understanding of your role and obligation.
The final step in registering a company in Australia is getting the consent of the company director, secretary, and member; the same person can hold all three positions. The director will have a Director Identification Number (DIN) assigned to them. If you need help with registering your business, inquiring about a company director, secretary, or questions to ensure your business is compliant, our sister company Aadmi offers full-service global expansion consulting.
Full-Service Global Expansion Consulting by Aadmi Customized from the Ground Up
Once you have registered your company in Australia, you can start operating your business. But launching a company is much more than just registration. You must acquire premises, hire employees, ensure you have the right licenses and certificates to conduct your business in Australia, and develop relationships with the vendors.
Suppose you are not looking to register a permanent entity. In that case, you can use an employer of record service, like Engage Anywhere, which provides businesses with a cost-effective and efficient solution for managing their global workforce. With their compliance, payroll, and HR expertise, your business can focus on its core operations while ensuring its employees are cared for. You can hire, onboard, and pay your new employees in Australia within 30 days.
Navigating the Australian market can be tricky for foreigners who do not understand Australia’s local and corporate culture. Understanding the market may require you to connect with an expansion partner that can help you navigate the market and allow you to launch a company while adhering to all the compliance/regulatory requirements.