Doing Business

in Australia

2009

Contents
1.

Introduction................................................................................................... 2

2.

Businessenvironment .................................................................................. 4

3.

Foreigninvestment..................................................................................... 12

4.

SettingupaBusiness.................................................................................. 16

5.

Labour .......................................................................................................... 21

6.

Taxation........................................................................................................ 25

7.

Accounting&reporting............................................................................. 33

8.

BusinessandExecutiveMigrationtoAustralia ..................................... 37

9.

UHYfirmsinAustralia .............................................................................. 40

10. UHYofficesworldwide ............................................................................. 42

Copyright2009UHYInternationalLtd

1.

Introduction

UHYisaninternationalorganisationprovidingaccountancy,business
managementandconsultancyservicesthroughfinancialbusinesscentres
inover70countriesthroughouttheworld.Businesspartnerswork
togetherthroughthenetworktoconducttransnationaloperationsfor
clientsaswellasofferingspecialistknowledgeandexperiencewithintheir
ownnationalborders.Globalspecialistsinvariousindustryandmarket
sectorsarealsoavailableforconsultation.

Thisdetailedreportprovidingkeyissuesandinformationforinvestors
consideringbusinessoperationsinAustraliahasbeenprovidedbythe
officeofUHYrepresentatives:

UHYHainesNorton(Perth)
POBox1707
OsborneParkDCWA6916
Australia

Tel:
+61894443400
Website: www.uhyhainesnorton.com.au
Email:
rswarbreck@uhyhn.com.au

YouarewelcometocontactRichardSwarbreckforanyinquiriesyoumay
have.

UHYHAINESNORTON
UHYHainesNortonisanationalassociationofcharteredaccountants
establishedinallmajorcitiesinAustraliaandistheAustralianmemberof
UrbachHackerYoung(UHY)International.PartnersandstaffinUHY
HainesNortonhavebeenadvisingAustralianandoverseasinvestorsfor
manydecadesonallaspectsofsettingupandrunningbusinesses.

Copyright2009UHYInternationalLtd

Ifyouneedfurtheradviceonanyissuesincludedinthispublicationplease
contactoneofthepartnerslistedbelow.

Perth
RichardSwarbreck
61894443400
Adelaide
AllenBolaffi
61881100999
Brisbane
RowanWallace
61732105500
Busselton
JamesGasbarri
61897523222
Canberra
MichaelSinclair
61262305999
Melbourne
HaroldLourie
61396294700
Sydney
AlanSaidman
61292566600

FurtherinformationaboutUHYHainesNortonisincludedinChapter9or
canbefoundonourwebsiteatwww.uhyhn.com.au

Informationinthefollowingpageshasbeenupdatedsothattheyare
effectiveatthedateshown,butinevitablytheyarebothgeneraland
subjecttochangeandshouldbeusedforguidanceonly.Forspecific
matters,investorsarestronglyadvisedtoobtainfurtherinformationand
takeprofessionaladvicebeforemakinganydecisions.Thispublicationis
currentatSeptember2009.

WelookforwardtohelpingyoudobusinessinAustralia.

UHYHainesNortonisamemberofUHY,aninternationalassociationof
independentaccountingandconsultancyfirms,whoseorganisingbodyisUrbach
HackerYoungInternationalLimited,aUKcompany.EachmemberofUHYisa
separateandindependentfirm.ServicesdescribedhereinareprovidedbyUHY
HainesNortonandnotbyUrbachHackerYoungInternationalLimitedorany
othermemberofUHY.NeitherUrbachHackerYoungInternationalLimitednor
anymemberofUHYhasanyliabilityforservicesprovidedbyothermembers.

Copyright2009UHYInternationalLtd

2.

Business environment

Australiaisrecognisedasoneoftheworldsmoreattractiveplacesin
whichtodobusiness.

Itisarelativelyyoungcountrywithaprosperousandstableeconomicand
politicalclimate.This,togetherwithfavourablemarketconditions,a
highlyskilled,diverseandwelleducatedworkforceandvastnatural
resources,combinetomakeAustraliaanexcitingprospectforforeign
investorsandbusinessmigrantswhoseeitasalandofopportunity.

AboutAustralia
Australiaisanindependent,selfgoverningcountry,locatedintheAsia
PacificregionontheedgeofthePacificRimtheworldsfastestgrowing
region.

Itcovers7.7millionsquarekilometresinareaandconsistsofsixStatesand
twoTerritories:
NewSouthWales
Queensland
SouthAustralia
Victoria
WesternAustralia
Tasmania
NorthernTerritory
ACTorAustralianCapitalTerritory.

Thecapitalcity,Canberra,islocatedintheACT.

BecauseofitssizeAustraliaisdividedintothreetimezoneswiththeeast
coastbeingtwohoursaheadoftheWest.

TheeasternStates,namelyQueensland,NewSouthWales,Victoriaand
Tasmaniaare10hoursaheadofGreenwichMeanTime(GMT).South
AustraliaandtheNorthernTerritoryareaheadby9hoursandWestern
Australiaaheadby8hours.

Population
Australiahasapopulationof21.9million.Approximately90%of
Australianslivenearthecoast,centredaroundthemaincities.

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Sydneyisthelargestcitywithapopulationofabout4.4million,
Melbournehasapproximately3.9million,Brisbane1.7million,Perth1.6
million,Adelaide1.1million,Hobart200,000andDarwin120,000.

Australiahasbecomeatrulymulticulturalsocietywithmorethanafifth
ofthepopulationbornoverseas.Sincethemid20thcenturymigrantshave
arrivedfromeastern,centralandsouthernEurope,theMiddleEastand
increasinglyfromtheAsiaPacificregion.Whilethepopulationis
principallyofBritishandIrishdescent,migrantscomefrommorethan160
differentcountries.Indigenouspeoplemakeupapproximately2.3%ofthe
population.

Language
TheofficiallanguageisEnglish.However,asaresultofitsmulticultural
population,therearealsoanumberofnewspapers,radiostationsand
televisionprogramscateringforthevariousethniccommunities.

Standardofliving
Australiasstandardoflivingisoneofthebestintheworld.Thisisdueto
itsgreatphysicalandclimaticenvironmentcombinedwithattractive
workingconditions,excellenthealthandeducationfacilities,highquality,
reasonablypricedhousingandanaffordablecostofliving.

Employment
InJune2009thelabourforcewas10.8million,withaparticipationrateof
65.3%andanunemploymentrateof5.9%.

GPD
TheGDPwasA$1095.4billionin2009(GPDpercapita$50,674).

CPI
Theinflationratewas1.5%fortheyeartoJune2009.TheReserveBankof
Australiaaimstokeepinflationbetween2and3%.

Interestrates
ThecashrateinJuly2009was3%.

Currency
TheunitofcurrencyistheAustralianDollar,quotedastheAUD.There
are100centstothedollar.

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SystemofGovernment
AustraliawasinitiallysettledbytheBritishinthelate1700sandwas
establishedasaCommonwealthin1901atthetimeofFederation.
AustraliaisgovernedbyaconstitutionalmonarchywiththeQueenas
headofstateandrepresentedinAustraliabytheGovernorGeneral.

TheheadofGovernment,thePrimeMinister,istheleaderoftheparty,or
coalitionofparties,holdingthemajorityseatsintheFederalParliament.
TheformofgovernmentisbasicallymodelledontheWestminstersystem,
withsomeinfluencesfromtheAmericancongressionalsystem.

ThreetiersofGovernment

Federal
TheFederalGovernment,basedinCanberra,governsAustraliaata
nationallevel,controllingmatterssuchasthetreasury,defence,foreign
policyandtrade,customsandexcise,communication,bankingand
insurance.

StateandTerritories
TheStateandTerritoriesareallselfgoverning,althoughtheyshare
mutualresponsibilitywiththeFederalGovernment.Theyhavetheirown
Westminsterbasedformsofgovernmentandeachpasstheirown
legislationdealingwiththeconcernsthataffectmostAustraliansonaday
todaylevel,suchastrade,health,education,lawenforcement,agriculture,
mineralresourcesandindustry.

Inpracticethismeansthatlegislationrelevanttodoingbusinessin
Australiacanvaryindetailandcomplexityacrossthecountry.

Local
LocalGovernmentshavelimitedpowersandgovernplanning,local
environmentandotherlocalissues.

TheLegalSystem
AustraliahasacommonlawlegalsystemsimilartotheEnglishsystem.
Therearetwosourcesoflaw:
LegislationenactedbytheFederalandStateGovernments
Commonlawcomprisingjudicialdecisions.

Parliamentmaypassstatutesandmakeregulationsunderstatutestodeal
withspecificissues.

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CourtsareoperatedatbothFederalandStatelevels,includinga
comprehensiveappealssystem.JudgesareappointedbytheFederaland
StateGovernmentsandonceappointedserveuntilretirementageunless
removedformisconduct.EachStatehasitsownjudicialsystemandcourt
hierarchyheadedbyaSupremeCourt.

ThelegalprofessioniscloselymodelledontheEnglishlegalprofession
with,inmostStates,adistinctionbetweenbarristers,whomainlyappear
incourt,andsolicitorswhomaintainofficestowhichthepublicmaygofor
advice.

MarketconditionsinAustralia

TheEconomy
Australiahasaprosperous,westernstyleeconomy.Itfollowsthefree
enterprisesystemwithanorderlymarketingofproductsandisdependent
oninternationaltrade.

Australiacurrentlyisoneoffeweconomiesintheworldwithapositive
growthrate.

ThestrengthoftheAustralianeconomyisinpartduetopolicyreform
suchasfinancialderegulation,recentmajorchangestothetaxationsystem
andimprovedlabourandindustrialrelations.Ithasalsobeenhelpedby
lowinterestratesaswellaslowunemploymentandastablerateof
inflation,andgreaterthanexpecteddemandforourresources(especially
fromChinaandIndia).

IndustryBase
Australiahasadiversifiedindustrybase.Withitsvastarrayofnatural
resources,Australiahastraditionallybeenknownforitsproductionofraw
materialsfromtheminingandagriculturalsectors,aswellasits
manufacturingindustriessuchasindustrialandtransportationequipment,
foodprocessing,chemicalsandsteel.

Inrecentdecadestherehasbeenamarkedshifttoabroaderrangeof
competitiveindustries.Australiahasseenarapidexpansioninitshigh
technologyITmanufacturingsector,includingscientificandmedical
equipment,biotechnology,telecommunicationsandsoftware.However
thegreatestgrowthhasbeenintheservicessector,andinparticularinthe
businessandfinance,communication,property,health,educationand
tourismservices.

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Trade
Australiaisastrongsupporterofreductionstotradebarriersaswellasthe
conceptofopenandmultilateraltradingsystems.TheAustralian
GovernmentactivelysupportstheGeneralAgreementonTariffsand
Trade(GATT).

Australiaisideallysituatedtotakeadvantageofthetradingopportunities
intheAsiaPacificregion.Ithasclosecultural,commercialandpolitical
tieswithintheregionandthisenhancestradingandbusinesspartnerships.
Itistheregionaleconomicleaderand50%ofglobaltradeisnowfocused
inthispartoftheworld.

TraditionallyAustraliaexportedprimaryindustrycommodities,namely
beef,wool,livesheep,wheatandmineralssuchasironore,coal,gold,
nickel,bauxiteandzinc.Overthelastdecadeandahalftherehasalsobeen
apronouncedgrowthinvalueaddedandmanufacturedproductsbeing
exported.Theseincludecars,computers,electricalgoodsandmedical
technology.

Majorimportsincludeconsumptionandmanufacturedgoodssuchascars,
computers,fuels,machineryandequipment,transportandmachinery
parts,andtelecommunicationsequipment.

MainTradingPartnersandExportDestinations
TraditionallyAustraliastradingpartnershavebeentheUnitedKingdom
andWesternEurope.However,withtheformationoftheEuropeanUnion,
thevolumeoftradewiththeseregionshasdeclined.Australiasmain
tradingpartnersarecurrentlymembercountriesoftheAsiaPacific
EconomicCooperationForum(APEC),whichAustraliahelpedlaunchin
1989.MembercountriesincludeBrunei,Canada,Chile,thePeoples
RepublicofChina,HongKong,Indonesia,Japan,Korea,Malaysia,Mexico,
NewZealand,PapuaNewGuinea,ThePhilippines,Singapore,Taiwan,
ThailandandtheUnitedStates.

InthelastdecadeAustraliastradewithAsiahasmorethandoubledand
manufacturingexportshavetripled.TheAsianeconomicdownturnin
1997/98diddisruptthegrowthoftradetosomeextentalthoughithasnot
hadasignificantimpactonAustraliaseconomicperformance.

BankingandFinanceSector
ThecentralbankinAustraliaistheReserveBankofAustralia.TheReserve
BankisresponsibleforsettingAustraliasofficialinterestrateandfor
maintainingastableandefficientmonetarypolicyandframework.Itis
responsibleforforeignexchangecontrol,maintainingageneraloversight

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ofdealersintheforeignexchangemarketandsettingconditionsand
prudentialstandards.

Untilthemid1980s,theReserveBankexercisedgreaterpowersoverthe
activitiesofbanks,limitingtherangeoffinancialintermediariesand
servicesonoffer.Recentderegulationofthefinancialmarketshasremoved
barriersbetweenclassesofinstitutionsandenabledintegrationintoworld
capitalmarkets.Thishasbeenaccompaniedbythevirtualabolitionof
exchangecontrolsandthefloatingoftheAustraliandollar.

ThefourmajorAustraliantradingbanksare:
NationalAustraliaBank(NAB)
WestpacBankingCorporation(Westpac)
TheCommonwealthBankofAustralia(CBA)
Australia&NewZealandBankingCorporation(ANZBank).

Collectivelythesebankshaveamajorityshareofbankingbusinessin
Australia.Smallerregionalbanks,StateGovernmenttradingbanks,and
otherfinancialintermediariessharetheremainingbusiness.

Themainregionaltradingbanksinclude:
Bankwest
BankofSouthAustralia
BankofQueensland
BankofVictoria
StGeorgeBank.

Inadditiontothetradingbanks,thereisacomprehensiverangeofother
sourcesoffinance.Theseincludemerchantorinvestmentbanks,finance
companies,buildingsocieties,creditoperativesorunions,development
banksandventurecapitalcompanies.

ASX
TheAustralianStockExchangeLimited(ASX)wasformedin1987when
sixindependentstockexchangesamalgamated.TheASXhasfiveregional
branches,situatedinSydney,Melbourne,Brisbane,AdelaideandPerth.It
wasrecentlyfloatedandlistedonitselfaworldfirst.ItisAustralias
primarynationalstockexchangeforequities,derivativesandfixedinterest
securities.AlltradingofsharesbetweenASXmembersisconductedby
electronictradingusingcomprehensive,highquality,information
technologysystems.

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ExchangeControl
Almostallrestrictionsonforeigncurrencyhavebeenremovedsincethe
floatingoftheAustraliandollar.

BUSINESSENVIRONMENTCONTROLS

APRA
BankingregulationissplitbetweentheAustralianSecuritiesand
InvestmentCommission(ASIC)andtheAustralianPrudentialRegulation
Authority(APRA).AllfinancialinstitutionsareregulatedbyAPRAand
havetoreporttoitonaperiodicbasis.Financialintermediariesonthe
otherhandhavetoobtainlicencesundertheCorporationsAct2001or
otherCommonwealthorStatelegislation.Mostinvestmentormerchant
banksareregisteredundertheFinancialCorporationsAct(1974).

APRAsupervisesthefunctionsoftheReserveBankaswellasbeing
responsibleforprudentialsupervisionoftheotherdeposittaking
institutions.Thisincludesbanks,buildingsocieties,creditunionsand
friendlysocieties,aswellaslifeandgeneralinsurancecompaniesand
superannuationfunds.

ASIC
TheAustralianSecuritiesandInvestmentCommission(ASIC)isan
independentGovernmentbodyresponsibleforenforcingcompanyand
financiallawstoensuremarketintegrityandconsumerprotection.It
administerstheCorporationsAct2001anditsfunctionistoensurefair
playinthecorporateandfinancialservicesindustry,protectinginvestors
andconsumersandpreventingcorporatecrime.

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ACCC
TheAustralianCompetitionandConsumerCouncil(ACCC)isan
independentstatutoryauthoritydealingwithcompetitionmattersand
responsibleforenforcingtheTradePracticesAct1974andthePrices
SurveillancesAct1983andassociatedlegislation.Consumerprotection
measuresareaimedatprohibitingunfairtradepracticessuchas
misleadingordeceptiveconduct,falserepresentationandvarious
advertisingpractices.Thesemeasuresalsocoverconditionsand
warranties,productsafetystandardsandinformation.

TradePracticesAct1974
Thisactprohibitsandrestrictsbusinesspracticeswhichmaylessen
competitionintradeandcommerceandappliestovirtuallyallbusinesses
inAustralia.TheActcoversanticompetitiveandunfairmarketpractices,
mergersoracquisitionsofcompanies,productsafety/liabilityandthird
partyaccesstofacilitiesofnationalsignificance.

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3.

Foreign investment

Australiaactivelywelcomesandencouragesforeigninvestmentandhasa
strongcommitmenttobusinessdevelopment.Itiswidelyrecognisedthat
foreigninvestmentfostershigherlevelsofeconomicactivityand
employment,bringsaccesstonewtechnologyandskillsandintroduces
newmarketsfortradeandcommerce.

ToencourageforeigninvestmentAustraliahasintroducedanumberof
facilitatingschemesincludingtradeincentives,Governmentgrantsandtax
concessions.

Foreigninvestorsaregenerallyheldtobe:
AnaturalpersonnotordinarilyresidentinAustralia
Anycorporation,businessortrustinwhichthereissubstantial
foreigninterest,regardlessofwhethersuchanentityisforeign
controlled.

ReasonsforinvestinginAustralia
TherearealargenumberofsoundreasonsforinvestinginAustralia:
Longtermpoliticalstability
Soundeconomicmanagementandgrowth
Lowratesofinflation
FavourablelocationwithintheAsiaPacificregion
Highlyskilled,diverseworkforce
Technologicallyadvancedwitharapiduptakeofcommunications
technology
Innovativeculturewithahighproportionofresearchand
developmentexpenditure
Openandefficientregulatorysystems.

ForeignInvestoroptions
InordertotransactbusinessinAustraliaaforeigninvestorcan:
Registerasaforeigncompany
Enterintoajointventure
AcquireanAustraliancompany
Establishanewbusiness
Setupabranchoperation.

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Registeringasaforeigncompany
Aforeigncompanyorsimilarentityisabletocarryonabusinessonits
ownaccount(i.e.asabranchorsubsidiary)providedithasregisteredin
Australia.Registeringgenerallyinvolves:
Appointingandauthorisingatleastonelocalagentordirectorto
actonitsbehalf
MaintainingaregisteredofficeinAustralia
Lodgingspecificcompanydocumentsandfinancialstatements
withASIC
Identifyingthebusinessasaforeigncompanyinwrittencontracts
andcorrespondence.
(SeeChapter4formoredetailedinformation)

Jointventures
ForeigninvestorsmayalsoenterintoajointventurewithanAustralian
businessororganisation.Thishasbecomeapopularoptioninrecentyears
particularlyiftheinvestmentisinnaturalresources.Asthereisno
legislationspecificallyregulatingjointventureagreements,theinvestor,
therefore,doesnothavetogothroughtheprocessof:
IncorporatingwithanotherAustraliansubsidiary
Registeringasaforeigncorporation.
Theinvestorshouldhowevercreateajointventureagreementwiththe
otherparty.Theparticipantsaregenerallytaxedonanindividualbasis.

AcquiringanAustraliancompanyorbusiness
Alternativelyinvestorscanacquirethesharesinorassetsofanexisting
Australiancompany.Thishastobeundertakeninaccordancewithboth
takeoverlegislationandtheCorporationsAct2001aswellasbein
accordancewithAustraliasforeigninvestmentpolicy.

Establishinganewbusiness
DetailsaboutestablishinganewbusinessinAustraliaareprovided
Chapter4.

Settingupabranchoperation
AnoverseascompanycanoperatethroughabranchofficeinAustralia,
referredtofortaxpurposesasaPermanentEstablishment.Theoverseas
companyregisterswithASICandtheATOandfortaxpurposesistreated
likeacompany.Themainadvantageisthepossibleeliminationofdouble
taxationwhencomparedtoanAustraliansubsidiarycompanyofaforeign
parent.

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Legislationaffectingforeigninvestment:
Whileitrecognisestheimportanceofforeigninvestments,Australiaisalso
keenlyawareoftheimportanceoflookingafteritsownaffairs.Thereisa
naturalapprehensionaboutAustralianassetsbeingownedandcontrolled
byforeignconcerns,particularlyinsensitivesectorssuchasthemediaand
developedresidentialrealestate.

Australiasforeigninvestmentpolicyisaccordinglydesignedto:
Encourageforeigninvestment
EnsurethatforeigninvestmentenhancesAustraliaseconomic
development
EnsurethatforeigninvestmentisconsistentwithAustraliasneeds.

ThesepoliciesareadministeredbytheForeignInvestmentReviewBoard
(FIRB)andcontainedwithin:
TheForeignAcquisitionsandTakeoversAct1975
MinisterialPolicyStatements
SpecificStateorTerritorybasedlegislation.

TheFIRBgenerallyexaminesallforeigninvestmentproposalsinvolving:
AcquisitionsofsubstantialinterestsinexistingAustralian
businessesorconcernswithtotalassetsvaluedatover$50million
Theestablishmentofanewbusinessinvolvingatotalinvestmentof
morethan$10million
Portfolioinvestmentsinthemediaof5%ormoreaswellasallnon
portfolioinvestments
TakeoversofoffshorecompanieswhoseAustraliansubsidiariesor
assetsarevaluedat$50millionormore,oraccountformorethan
50%ofthecompanysglobalassets
Acquisitionsofinterestsinurbanrealestateregardlessofvalue
Directinvestmentsbyforeigngovernmentsortheiragencies.

TheFIRB,forexample,hastobeapproachedforapprovalifaforeign
investorwishestoinvestinoilandgasorresourceprocessing,
manufacturing,nonbankingfinancialinstitutions,insurance,share
broking,theaviationindustry,aswellasagriculture,forestryorfishing,or
developingrurallandorbusinesses,orcommercialrealestate.

Inmostindustrysectorssmallerproposalsareexemptfrominvestigation
bytheFIRBandlargerproposalsareapprovedunlesstheyareheldtobe
contrarytothenationalinterest.

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Austrade
TheAustralianTradeCommission(Austrade)encouragesforeign
investmentbyhelpingtoprovidepracticaladvice,marketintelligenceand
ongoingsupportinthedevelopmentofexportmarkets.Thisincludes
puttingoverseasinvestorsincontactwithAustralianbusinessesaswellas
providingadviceandguidanceforjointventureopportunities.

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4.

Setting up a Business

Thereareanumberoflegalstructuresavailableforsettingupabusinessin
Australia.TheseareessentiallythesameasthoseusedintheUnited
Kingdom,theUnitedStates,NewZealandandotherEnglishspeaking
countries.Themostcommonstructuresinclude:
Companyprivateorpublic
Partnership
Trusts
Soletrader.

Companies
Foreigninvestorsmayfindacompanytheeasieststructuretouse,
particularlyifopeningabranchorsubsidiaryoftheirexistingoverseas
business.ThemostcommonformofcompanyinAustraliaiseithera
private(proprietary)companyorapubliccompanylimitedbyshares.

AprivatecompanyusesProprietary(Pty)initsname,anditsshares
cannotbeofferedtothegeneralpublicasameansofraisingrevenuefor
thecompany.

AlimitedcompanyincludesLimited(Ltd)initsnameandcaneitherbe
limitedbyguarantee,mostlyusedbycharitiesandtradeassociations,or
morecommonlylimitedbyshareswheretheshareholdersliabilityis
limitedtopayingtheissuedshareprice.

AllcompaniesareregulatedbytheCorporationsAct2001.

PrivateCompany
Smallerbusinesseswillgenerallyuseaprivatecompanystructureasitis
easierandlessexpensivetomanageandadminister.
Privatecompanies:
Musthaveatleastonedirector
AtleastonedirectormustordinarilyresideinAustralia
Donothavetohaveasecretary
Ifthecompanyhasoneormoresecretaries,atleastonemust
resideinAustralia
Musthaveatleastonebutnotmorethan50shareholders
Mayoffersharestoexistingshareholdersoremployees
Areprohibitedfromofferingshares,debenturesorotherformsof
securitytothepublic
Usuallyrestricttherightofshareholderstotransfershares

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IftheAustraliancompanyiscontrolledbyaforeigncompany,it
requiresanannualauditandhastosubmititsfinancialstatements
toASIC

PublicCompany
Thesearelistedorunlistedpubliccompanies.Alistedpubliccompany
tradesthroughtheAustralianStockExchange(ASX).
Publiccompanies:
Musthaveatleastthreedirectors
AtleasttwodirectorsmustordinarilyresideinAustralia
AtleastonesecretarymustordinarilyresideinAustralia
Musthaveatleastoneshareholder
Mayalsohaveanunlimitednumberofshareholders
Mayoffersharestothepublic
MustcomplywiththeCorporationsActbeforeofferingshares
Placenorestrictionsonthetransferofshares.

Whensettingupacompanyaninvestorcaneitherpurchaseashelf
company,orincorporateanewcompanytosuitmorespecific
requirements.Shelfcompanieshavealreadybeenestablishedand
registered,butnottraded,andcanbeboughtthroughashelfcompany
officeorthroughlawyersoraccountants.

IncorporatingacompanyrequiresregisteringwithASIC,theAustralian
SecuritiesandInvestmentsCommission,andlodgingthecompanyname.
ThecompanynamehastoincludePtyandLtd,ifrelevant,toshowthe
companyslegalstatus.Onceregistered,companiesareprovidedwithan
AustralianCompanyNumber(ACN)whichmustbeshownonletterheads
andmostotherbusinessdocuments.Alternatively,theABNdescribedon
thenextpagemaybeshown.

ListingwiththeAustralianStockExchange(ASX)
CompanieswishingtolistontheAustralianStockExchangehaveto
conformtotherequirementsofboththeASXandtheCorporationsAct.

TheASXrequiresthecompanytoprovidethefollowingdetails:
Thecompanyscapitalstructure
Numberofmembers
Paidupvalueofsharesitplanstoissue.

TheCorporationsActrequiresthecompanytoissueadetailedprospectus
beforethepublicofferingismade.

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Partnerships
InAustraliapartnershipscanbeestablishedbytwoormore,anduptoa
maximumof20people.Partnershipsareapopularstructurewithmany
smallandmediumsizedbusinessesastheyhavelowsetupcosts,have
minimalformalsetuprequirementsandarereasonablyflexiblefor
taxationpurposes.

InAustraliapartnershipsarecoveredbythePartnershipActandcontract
law.InmostStatesthepartnersshareprofitsandcostsequallyandare
heldjointlyandseverallyliablefordebtsandobligations.SomeStatesand
Territorieshavestatebasedlegislationallowinglimitedpartnerships
whichregulatetheliabilityofthepartners.

Thepartnershipisrequiredtolodgeapartnershiptaxreturnbutisnot
taxedasaseparateentity.Eachpartnerlodgesanindividualtaxreturn,
payingtaxontheirshareofprofit,andcurrentlycanclaimtheirshareof
lossesasanoffsetagainstotherincome.

Trusts
Innoothercountryaretrustsascommonlyusedinsmallormediumsized
businessesasinAustralia.Theyhavebecomepopularbecauseoftheir
flexibilityandabilitytominimiseincomeandcapitalgainstax.Probably
morenewsmallbusinessesoperatethroughatruststructurethanthrough
partnershipsandcompanies.

Trustsareusuallysetupusingacompanyasatrustee,wherebythe
companyssharesareheldbytheindividualwhoisalsothedirector.This
hastheadvantageofprovidinglimitedliabilityprotection.

Sometrusts,commonlyknownasfamilytrusts,arenormallyofa
discretionarynature.Thisallowsthemtodistributeincomewithinthe
family,ortorelatedentities,inthemosttaxefficientmanner.

SoleTrader
Thisisthesimplestandmostcostefficientmethodoflegallyestablishinga
business.Theowneristhesoleproprietorandsoretainscompletecontrol.
Thebusinessissubjecttolessregulationandallprofitsgototheowner.

Soletraderscantradeundertheirownnameorchoosetoregistera
businessname.Asoletraderistreatedasanindividualfortaxpurposes.

Thisstructuredoesnothavethelimitedliabilityprotectionprovidedbya
companyoracompany/truststructure.

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RegulationofBusinesses

CorporationsLaw
CompanylawinAustraliaisgovernedbytheCorporationsLawofthe
individualStatesandTerritoriesandsubjecttotheCorporationsAct2001,
whichisadministeredbyASIC.Thisregulatestherules,procedures,and
accountingandreportingrequirementforcompanies.

Registrationofbusinessnames
Allbusinessnamesmustberegisteredunlessthebusinessoperatesunder
thefullnames,orinitials,ofthebusinessownerorowners.Companies
thatcarryouttheirbusinessunderanameotherthantheircompanyname
mustalsoregistertheirbusinessname.

BusinessnamesareregisteredwiththeirappropriateStateorTerritory
authorityandwithASIC.Thisallowstheentitytotradeunderthatname
butdoesnotprovidelegalstatus.

Toregistertheentitymustprovide:
Thebusinessname
Theaddresswhereitwilloperate
Thenamesandaddressesofthebusinessowners
Whenitwillstarttrading.

ABN
Companies,trusts,partnershipsorsoletraderscarryingonabusinessare
requiredtoapplytotheAustralianTaxationOffice(ATO)foran
AustralianBusinessNumber(ABN).TheGovernment,andparticularlythe
ATO,usesthisnumbertoidentifythedifferentbusinesstaxpayers.

Registeringfortax
AllbusinessesarerequiredtohaveaTaxFileNumber(TFN)andtolodge
ataxreturnwiththeATO.

GST
TheGSTisabroadbasedtaxof10%onmostsuppliesofgoodsand
servicesconsumedinAustralia.AbusinessmustregisterforGSTifitisan
enterprisewithanannualturnoverof$75,000ormore.

Businesslicencesandpermits
Mostbusinessesrequiresomeformoflicenceorpermitinordertooperate
legally.Thesedependonthenatureofthebusinessandareobtainedfrom
Commonwealth,State,Territory,orLocalGovernmentauthorities.

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Insurance
AllemployersarerequiredtohaveWorkersCompensationInsuranceto
covertheiremployeesforpersonalinjuryoccurringatorwhiletravelling
toorfromwork.Allbusinessvehiclesmustbecoveredbycompulsory
thirdpartymotorinsurancewhichprovidescoveragainstlegalliability
fromdeathorinjuryduetothemotorvehicleuse.

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5.

Labour

TherehavebeenmajorchangestotheworkingconditionsinAustraliain
recentyears.Thisisdueinthemaintotheincreasinglyopenand
competitiveeconomythathasdevelopedsincetheearly1980s.Atthesame
timetherehasbeenconsiderablederegulationofthelabourmarket
bringingwithitmoreflexibleworkconditionsandwagedetermination.

ThecurrentLabourGovernmenthasintroducedmajorchangestothe
IndustrialRelationssystemwiththerepealoftheWorkplaceRelationsAct
1996andtheintroductionoftheFairWorkAct2009on1July2009.The
newActwillbefullyimplementedfrom1January2010.

EmploymentStatistics
InJune2009approximately10.8millionpeoplewereintheAustralian
labourforce.

Theaverageemployeeworksa38hourweekand/oraneighthourday,
andisentitledto20dayspaidannualleaveinadditiontopublicholidays.

TheaverageweeklyearningsforadultsworkingfulltimeinFebruary2009
was$1,196.

Theworkforceishighlyeducatedwithover42%holdinguniversityor
tradequalifications.

Serviceindustriesemploythelargestproportionofpeople.Thisis
followedbythemanufacturingandconstructionindustriesandthen
primarytypeindustriessuchasagriculture,mining,forestry,fishingetc.

Theunemploymentratewas5.8%atJune2009.

ThegeneralretirementageforAustralianemployeesis65formenand
between60and65forwomen,whichiswhentheybecomeeligibleforthe
Governmentpension.Somelargecompaniesallowretirementfromtheage
of55.InsomeStateslegislationpreventscompulsoryagerelated
retirement.

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IndustrialRelations

Tradeunions
AustraliahashadatraditionofstrongtradeunionswiththeLabourparty
apowerfulsupporteroftheseunions.Inrecentdecades,however,
Governmentpoliciestoimproveinternationalcompetitivenesshave
encouragedemployerstoseekgreaterlabourmarketflexibility.Thishas
ledtoincreasedchangesinlegislationconcerningworkplacehealthand
safety,industrialrelationsandtraining,workingconditionsandratesof
pay.

Approximately19%oftheAustralianworkforcebelongtoatradeunion.
Theseunionsareusuallybasedonindustryoroccupationandthegreatest
rateofunionmembershipiswithinthecommunicationsindustry.The
largestunionorganisation,theAustralianCouncilofTradeUnions
(ACTU),hasapproximately2millionmembers.

Unionmembershipissupposedtobenoncompulsory,howeverclosed
shoparrangementsincertainindustriesmakemembershipalmost
compulsory.

Awardcompliance
InAustraliasomeformofNationalEmploymentStandardandmodern
awards,EnterpriseAgreementorcontractofemploymentcoversmost
workers.Generallytheseawardsorregulationsaredesignedtoensure
equitableandfairtreatmentofallemployeeswhilststillencouraginga
competitiveandflexiblebusinessenvironment.Employersareobligatedto
complywiththeawardsandlegislativeprovisionsthatrelatetotheir
employees.

Provisionsusuallyrelateto:
Typesofemploymentandterminationofemployment
Consultationanddisputeresolution
Minimumratesofpay
Workinghours
Overtimerates
Breaks
Personal/Carers/Compassionateleave
Annualleave
Terminationofemploymententitlements.

TheyareprimarilyregulatedbyFairWorkAustraliawhichwasformedin
accordancewiththeFairWorkAct2009.

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EnterpriseAgreements
Alargenumberofemployeesworkundertermsandconditionsprivately
negotiatedwiththeiremployertermedEnterpriseAgreements.Thisisa
writtenagreementonthetermsandconditionsofemploymentbetweenan
employerandemployeesundertheFairWorkAct2009.AnEnterprise
AgreementhastobeapprovedbyFWA,itwill,inordertopassthe
approvalprocess,havepassedthebetterofoveralltest(BOOT)meaning
anemployeeisdeemedtobebetteroffthanundertheNational
EmploymentStandardsandmodernawards.

EmployerObligations

Workerscompensation
AllemployershavetotakeoutWorkersCompensationinsurancetocover
theiremployees.Thiscoversemployeesinjuredinthecourseoftheir
employmentorwhiletravellingtoorfromtheirplaceofemployment.

Occupationalhealthandsafety
AllbusinesseshavetocomplywithlegislationsetintheirStateorTerritory
requiringemployerstoprovidesafeworkplacestogetherwithsafework
practices,suchassafehandlingofhazardoussubstancesanddangerous
goods.

Taxcompliance
Taxationlegislationrequirestheemployertowithholdanappropriate
amountoftaxfromanemployeesincomeandtosubmitthistothe
AustralianTaxationOffice.

Superannuation(pensioncontributions)
Superannuationisaspeciallydesignedlongterminvestmentfor
retirementsavings.Employersareobligedtopayaminimum
superannuationamountforeachemployeeintoarecognised
superannuationfund.Currentlythisissetat9%oftheirwagesorsalary.
Inmanycircumstancesemployeeshavetherighttonominatetheir
preferredfund.

Unfairdismissal,redundancyandsocialsecurity
Itisillegalforanemployertodismissanemployeeincircumstanceswhich
couldbeheldtobeunjust,harshorunreasonable.Specificprocedures
mustbefollowedwhendismissinganemployeeandemployerswhofailto
complymayhavetoreinstatetheemployee.

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Employeeswhoaremaderedundantwhentheirjobsceaseareusually
entitledtoadditionalseverancepay.Thisisoftenintheformofalump
sumpaymentandtheamountisbasedonthelengthofemployment.
TheGovernmentprovidessocialsecuritybenefitsorpensionsto
unemployed,underprivileged,sickandelderlyAustraliansandfor
dependentchildrenandstudentsundercertaincircumstances.

Employeeimplicationswhenbuyingorsellingabusiness

ThereisnolegislationinAustraliastipulatingthatonthesaleofabusiness
employeesautomaticallytransfertothebuyer.

Insomecircumstances,thebusinesspurchasermaybeboundbytheterms
andconditionsofemploymentestablishedinaccordancewiththe
purchaseagreement.

WorkPermits
SkilledforeignworkersareallowedtobeemployedinAustraliaoncea
numberofconditionshavebeenmet.Theseincludetheemployer
demonstratingthattheoccupationsrequirementscannotbefulfilledbyan
Australianresidentandthatcomprehensivemeasureshavebeentakento
attempttofillthepositionlocally.

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6.

Taxation

InAustraliatheTaxActisextremelycomplexandisconstantlychanging.
Itis,therefore,onlypossibletoprovideabroadoutlinehere.

TaxAuthoritiesandResponsibility
AustraliastaxationisspreadbetweenthethreelevelsofGovernment,the
Commonwealth,orFederalGovernment,theindividualStatesor
TerritoriesandattheLocalGovernmentlevel.

FederalGovernmentTaxes
ThemaindirecttaxleviedbytheFederalGovernmentisincometax.
Incometaxcanincludecapitalgainstaxandisappliedtocompanies,
trustsandindividuals.TheAustralianTaxationOffice(ATO)isAustralias
federaltaxationauthority.

IndirecttaxesincludeGST,customsandexcisedutiesandfringebenefits
tax.Exciseisimposedoncommoditiessuchasalcohol,tobaccoand
petroleum.Fringebenefittaxesareleviedonnonmonetarybenefits
providedtoemployees.

StateTaxes
EachStateorTerritoryimposesalargenumberoftaxesandisresponsible
fordeterminingtheirowntaxlegislation,regulationsandrates.Therecan
bedistinctdifferencesbetweentheseratesoftax.Theprimarytaxesthey
imposeincludepayrolltax,stampdutyandlandtaxes.

LocalGovernmentTaxes
LocalGovernmentsalsoimposetaxes,principallyratesuponlandowners.
Thesemakeuplessthan5%ofthetaxleviedontheprivatesector.

Liabilityforincometax
ThegeneralruleisthatAustraliantaxresidentsmustpayincometaxonall
theirincomeandcapitalgainsfromsourcesanywhereintheworld.

From1stJuly2006,taxresidentsonprovisionalvisasarenottaxedonmost
foreignincomeandcapitalgains.Thisprovidesawindowduringwhich
foreignassetscanbesoldoverseasorbroughtintoAustraliaverytax
effectively.

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NonresidentsaretaxedonallincomeandcapitalgainsfromAustralian
sources.HoweverthisismodifiedwhereapplicablebyAustraliasdouble
taxtreaties.

LegislationgoverningincometaxisjointlycontainedintheIncomeTax
AssessmentAct1936andtheIncomeTaxAssessmentAct1997andis
administeredbytheCommissionerofTaxationwhoisresponsibleforthe
operationoftheATO.Thesystemoperatesbyselfassessment,with
randomATOauditstoverifyassessments.

Australiasincometaxandfiscalyearendsonthe30thofJune.

Generallybusinesses,corporations,trusts,partnershipsandindividuals
areobligedtolodgeanincometaxreturnonanannualbasisiftheirtotal
taxableincomeexceedsthelimitsetbytheCommissioner.

Taxableincome
Taxableincomeistheamountremainingaftermakingallallowable
deductionsfromassessableincome.

PersonalTaxes

Theratesoftaxforresidentindividualsforthe2008/9and2009/10
financialyearsaresetoutbelowinAustraliandollars(theratesdonot
includetheMedicareLevy):

Threshold1July2008to30
June2009

Tax
Rate%

Threshold1July2009to30
June2010

Tax
Rate
%

$0$6,000

$0$6,000

$6,001$34,000

15

$6,001$35,000

15

$34,001$80,000

30

$35,001$80,000

30

$80,001$180,000

40

$80,001$180,000

38

$180,001+

45

$180,001+

45

Nonresidentindividualswillpaytaxatthefollowingratesforthe2008/9,
2009/10and2010/11financialyears.Nonresidentsdonotpaythe
MedicareLevy:

Tax
Tax
Threshold1July2008to30
Threshold1July2009to30
Rate
Rate
June2009
June2010
%
%

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$0$34,000

29

$0$35,000

29

$34,001$80,000

30

$35,001$80,000

30

$80,001$180,000

40

$80,001$180,000

38

$180,001+

45

$180,001+

45

Theresidentstest
Therearemanyissuesdeterminingresidency,butgenerallyindividuals
aredeemedresidentsiftheyaredomiciledinAustralia,unlessthat
personcanprovetheirpermanentplaceofabodeisoutsideAustraliaand
thereisnointentionofresidinginAustralia.

Taxresidencycanbedifferenttovisaresidency.

Medicare

MedicareistheschemewhichgivesAustralianresidentsaccessto
healthcare.AustraliantaxpayersgenerallyhavetopayaMedicarelevyat
therateof1.5%oftaxableincomeoncethisincomeexceedsacertain
threshold.IndividualsclassifiedasnonAustralianresidentsareexempt
frompayingthislevyunlesstheyarecitizensofacountrythathasa
healthcareagreementwithAustralia.

BusinessTaxes

Incometaxisleviedontaxableincome,whichisassessableincomeless
allowabledeductions.Assessableincomeisgrossincomeandincludes
certaincapitalgains.

Incometaxlawsincludeprovisionswhichmayattributeincomefrom
personalservicestotheindividualeventhoughtheincomehaspassed
throughaCompanyorTrust.ThestatesandTerritorieshavediffering
lawsregulatingwhethersomeprofessionalincomescanbeearnedby
companiesorotherentities.

Deductionsarealllossesoroutgoingsincurredingainingorproducingthe
assessableincome,orwhilecarryingonabusiness.Allowabledeductions
normallyincludesalaryandwages,stockpurchases,manufacturing,
tradingoradministrationexpenses,interest,rentalsandroyalties.
Depreciationisallowedonitemssuchasincomeproducingplantand
equipment,aswellascertainformsofintellectualproperty.

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Capitalgainsorlossesgenerallyresultfromthedisposalofassetsacquired
after19September1985.Thetaxableamountisdeterminedbydeducting
thecostoftheasset,andanyincidentalcostsassociatedwithitspurchase
anddisposal,fromthenetproceedsofthedisposal.Variousconcessions
arethenusuallyavailabletoreducethecapitalgainthatisincludedinthe
taxableincome.Generallythereisa50%reductiononmostcapitalgains
and,withcertainsmallbusinesses,furtherconcessions.

Capitallossescanonlybedeductedfromtaxablecapitalgains.Theycanbe
carriedforwardindefinitelybutmayonlybeusedtooffsetparticular
capitalgains.

Dividendsarealmostanydistributionfromacompanytoshareholders
apartfromreturnedpaidupcapital.Dividends,withanimputationcredit
paidoutofaftertaxprofits,areknownasfrankeddividendsandcarrya
taxcredit.Therecipientcanoffsetthiscreditagainstthetaxpayable.No
suchoffsetisavailableforforeigndividendsreceived.

Companies

Fortaxpurposesallincorporatedorunincorporatedbodiesorassociations
exceptpartnershipsareheldtobecompanies.Theyaretaxableunderan
imputationsystem,beingassessedontheirprofitsandusuallytaxedata
flatrateof30%.

Residentcompanies
AcompanyisresidentinAustraliaifitisincorporatedinAustraliaor
carriesonbusinessinAustraliaandeither:
maintainsitscentralmanagementcontrolinAustraliaor
thevotingpowerinthecompanyiscontrolledbyshareholders
whoareresidentinAustralia.

ResidentcompaniesarerequiredtodisclosebothAustralianandnon
Australianincome.

Nonresidentcompanies
AnonresidentcompanyhastofileataxreturndisclosingitsAustralian
sourcedincome.Australiansubsidiariesofaforeignparentcompanymay
applytothetaxauthoritiestochangetheirtaxyearaccountingperiodto
coincidewiththefinancialyearendreportingrequirementsoftheparent
company.ThiscanbemodifiediftheparentcountryispartofAustralias
networkofdoubletaxtreaties.

Partnerships

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Thepartnershipfilesataxationreturndetailingtheamountoftaxable
incomedistributedtoeachpartnerandoutliningeachpartnersshareof
theincomeandexpenses.Thepartnersthenfilereturnsonanindividual
basisincludingthewholeoftheirindividualshareofthepartnerships
incomeorlosses.

Trusts
Dependingonthetruststructure,taxwilleitherbepaidbythetrusteeor
thebeneficiary.Atrustwillbearesidenttrustduringtheyearofincomeif
eitheratrusteeisresidentinAustralia,orifthecentralmanagementand
controlofthetrustisinAustralia.

SoleTraders
Soletradersaretaxedasindividualsandassucharetaxedataprogressive
ormarginalrateoftaxasdetailedinPersonalTaxes.

DoubleTaxTreaties
AustraliahasestablishedDoubleTaxationAgreementswithanumberof
othercountriesinordertoavoiddoubletaxationofincomeandtax
evasion.

Theseagreementsvaryslightlywiththedifferentcountries.Generally,
however,taxingrightsoversomeclassesofincomeonlyapplytothe
countryofresidenceofthepersonderivingtheincome.Allotherincomeis
abletobetaxedinthecountryinwhichtheincomehaditssource.

CountrieswithwhichAustraliacurrentlyhasDoubleTaxationagreements
arelistedinAppendixA.

AntiAvoidanceProvisionsforForeignEntities
Theseregulationsareextremelycomplexandapplytoinvestmentintoand
outofAustralia.

Thincapitalisation
Thincapitalisationrulesoperatetopreventforeigncontrolledormulti
nationalcorporationsallocatingadisproportionateamountofdebttotheir
Australianoperationstherebyreducingtheirtaxationliabilities.Aforeign
controllerisdefinedasaforeignownedcompanywitha15%orgreater
interestintheAustraliancompany.

Transferpricing
Inordertocontrolarrangementsbywhichprofitsareshiftedoutof
AustraliatheCommissionerofTaxationmayimposearmslengthprices

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inaccordancewithanumberofmethodologies.Anymanagementcharges
orsuppliesofservicesbyforeigninvestorstorelatedAustraliancompanies
mustbecommerciallyjustifiableandatapproximatelyarmslengthprices.

FederalTaxes

GST

OneofthekeytaxreformsrecentlyintroducedintoAustraliaistheGoods
andServicesTax(GST).TheGSTisabroadbasedconsumptiontax
appliedattherateof10%,andappliestothemajorityofgoodsand
servicesconsumedinAustralia.Thegeneralexceptionsincludebasic
foods,education,health,charitableactivitiesandsomefinancial
transactions.

GSTisessentiallyavalueaddedtaxandisgenerallyappliedateachstage
oftheproduction/distributionchain.BusinessesmayincurGSTliabilityat
eithertheissueofaninvoiceorreceiptofanypayment.

AllbusinessesmustregisterforGSTiftheyhaveaturnoverof$75,000or
moreinsalesduringthefinancialyear.BusinessesregisteredfortheGST
havetoreturnaBusinessActivityStatement(BAS)attheendofeach
quarterreportingtheirbusinesstaxentitlementsandobligations.

SuchbusinessescanalsoclaimaGSTrefundorinputtaxcreditforthe
GSTcomponentapplyingtogoodsandservicespaidforinthecourseof
carryingontheirbusiness.

FringeBenefitsTax(FBT)
Businesseswhichprovidenoncashbenefitstotheiremployeesare
generallysubjecttoFringeBenefitsTax(FBT).Thisischargedat46.5%of
thetaxablevalueofthefringebenefit,andisdeductiblebytheemployer
forincometaxpurposes.

FBTappliestobenefitssuchasprivateuseofamotorvehicle,waiverofa
debt,interestfreeorlowinterestloans,freeorcheaphousingandsome
discountedgoodsorservices.

CustomsandExcise
CustomsdutyispayableoncertaingoodsatthetimetheyenterAustralia.
Theamountofdutypayableisgenerallyleviedonthecustomsvalueof
thegoodswhichmaydifferfromthesaleprice.

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Exciseisimposedonthelocalproductionofanumberofgoodsincluding
tobaccoproducts,alcoholicbeveragesandpetroleum.

STATETAXES

Payrolltax
EachStateorTerritoryindividuallyleviespayrolltaxongrossmonthly
wages,salariesandcertainnoncashbenefitspaidbyemployers.Asan
example,thepayrolltaxratesforWesternAustraliaaresetoutbelow:

ANNUALWAGES($)
TAXRATES(%)

0750,000
Nil
Over750,000
5.50

StampDuty
StampDutiesareimposedoncontractsandlegaldocumentssuchas
transfersofland,goodwillandthetakingofsecurityforfinancial
accommodationsuchasmortgagesandcharges.Again,theratesvary
accordingtothetypeoftransaction,andbetweenthedifferentStatesand
Territories.

Asanindicationoftheratesofstampduty,thefollowingistheWestern
Australianratefortheacquisitionofthegoodwillandplantand
equipmentcomponentofabusinessasat1July2009.

$0$80,000
$1.90per$100orpartthereof
$80,001$100,000
$1,520+$2.85per$100orpartthereofabove
$80,000
$100,001$250,000
$2,090+$3.80per$100orpartthereofabove
$100,000
$250,001$500,000
$7,790+$4.75per$100orpartthereofabove
$250,000
$500,001&upwards
$19,665+$5.15per$100orpartthereofabove
$500,000

Stampdutyconcessionsapplytofirsthomebuyers.

Stampdutyratesonresidentialpropertyfor20June2009isasfollows:

$0$120,000
$1.90per$100orpartthereof

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$120,001$150,000
$150,001$360,000
$360,001$725,000
$725,001&upwards

$1,520+$2.85per$100orpartthereofabove
$80,000
$2,090+$3.80per$100orpartthereofabove
$100,000
$7,790+$4.75per$100orpartthereofabove
$250,000
$19,665+$5.15per$100orpartthereofabove
$500,000

LandTax
LandTaxisimposedbyeachStateorTerritory,ispaidannuallyandis
baseduponontheunimprovedvalueoflandownedbythetaxpayer.
Generallytherateoftaxvariesaccordingtothevalueoftheproperty.This
taxmaybedeductibleforincometaxpurposesifthelandisusedinthe
productionofassessableincome.Therearevariousexemptionsavailable
tolandholdersdependingupontheuseoftheland,includingan
exemption(inmostcases)foranindividualsprincipalresidence.

Otherimpositions
Annualfeesarepayableonallvehicleregistrations,asarecouncilrates
andtaxeswhichagainvaryaccordingtoStateorTerritoryregulations.

EmployersObligations
Employersmustwithholdappropriateamountsofwithholdingtax
(PAYG)fromtheiremployeesearningsandpaythisdirectlytotheATO.
Employersarealsoobligedtocontributeaminimumlevelof
superannuationforeachemployeeintoarecognisedsuperannuation
(pension)fund.Inaddition,theymaybeobligedtopayaworkers
compensationlevyinaccordancewiththedifferingregulationsofthe
individualStatesandTerritories.

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7.

Accounting & reporting

TheCorporationsAct2001regulatesaccountingandreportingfor
companies,registeredschemesanddisclosingentitiesinAustralia.

Unincorporatedbodies,aswellasbranches,partnershipsandcertain
trustsarenotgovernedbytheCorporationsAct,butarestillrequiredto
maintainaccuraterecordsfortaxandotherpurposes.

Anauditmustbeconductedonallfinancialreportspreparedunderthe
requirementsoftheCorporationsAct.Otherentitiesarenotrequiredtobe
audited.

Disclosingentitiesarethoseentities,includingcompaniesandother
unincorporatedbodies,whichhaveraisedfundsfromthepublic.These
canincludebothlistedandunlistedentities.

ACCOUNTINGSTANDARDS

ThemainaccountingbodiesinAustraliahavedevelopedtheAustralian
AccountingStandards(AASs).Thesestandardsapplytopublicservice
sectorentitiesandotherbodiesnotregulatedbytheCorporationsAct.

TheAustralianAccountingStandardsBoardhasissuedaseriesof
standards(AASBs)whichmustbefollowedbycompaniesand
unincorporateddisclosingentitiesgovernedbytheCorporationsAct.

FromJuly2005,therehasbeenaharmonisationofAustralianAccounting
StandardstofollowtheInternationalAccountingStandardsdevelopedby
theInternationalAccountingStandardsBoard.Moreinformationabout
specificstandardscanbefoundathttp://www.aasb.com.au.

COMPLIANCEWITHREGULATIONS

TheCorporationsActsetsoutanumberofrequirementsforpublic
companiesanddisclosingentities,including:
Maintenanceandretentionofaccountingrecords
Maintenanceofregistersandminutesrelatingtodirectorsand
shareholdersandtheirmeetings
Theformandcontentofannualaccounts
Publicationtoshareholdersandthepublicfilingofannualaccounts
Requirementsforannualaccountstobeaudited.

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Otherbusinessstructures,suchassoletraders,partnershipsandtrusts,not
governedbytheCorporationsActstillhavetocomplywiththefollowing
requirementsfortaxandotherpurposes:
Maintenanceofreliablerecordsshowingatrueandfairviewof
theircircumstances
Retentionofrelevantrecordsanddocumentsforfiveyearsto
supporttaxclaims.

Certainstructuresmayberequired,bytheirgoverningdocuments,to
producetheirfinancialstatementsinaccordancewiththeCorporations
Act.

FinancialReporting
TheCorporationsActrequiresdirectorsofAustralianpubliccompanies,
largeproprietarycompanies,disclosingentitiesandregisteredschemesto
prepareanannualfinancialreportandadirectorsreport.Thefinancial
reportsmustprovideatrueandfairviewofthecompanysfinancial
positionandperformanceandmustcomplywiththeaccounting
standards.

Annualfinancialreportsinclude:
Adirectorsreport
Anauditorsreport
Aprofitandlossstatementfortheyear
Abalancesheetasattheendoftheyear
Cashflowstatementfortheyear
Comprehensivenotestothefinancialreportandotherdisclosures
Directorsdeclaration.

Listedcompaniesmustmaketheirannualfinancialreportavailableto
shareholdersifrequested.Theymaychoose,however,topresenttheir
shareholderswithaconcisefinancialreportinsteadofthefullreport.This
mustincludethedirectorsandauditorsreport,balancesheet,cashflow
andprofitandlossstatements.Inadditionitmustincludeadiscussion
andanalysisofeachstatementaswellasincludeinformationrelatingto
earningspershare,dividends,detailsaboutextraordinaryitems,segment
informationandsubsequentevents.

Reportingrequirements
Thedifferentreportingrequirementsforthedifferententitiesareas
follows:

PublicCompanies

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Toholdanannualgeneralmeetingwithinfivemonthsoftheendof
thefinancialyear
Todistributeitsannualfinancialreport,orconcisefinancialreport,
toshareholdersatleast21dayspriortotheannualgeneralmeeting.
ProprietaryCompanies
Norequirementtoholdanannualgeneralmeeting
Ifanannualfinancialreportisrequired,thismustbedistributed
andlodgedwithinfivemonthsoftheendofthefinancialyear.

DisclosingEntities
Topreparebothhalfyearandannualfinancialreports
Tofileinformationwhich,ifgenerallyavailable,couldmaterially
affectthepriceandvalueofitssecuritiesinaccordancewiththe
CorporationsActscontinuousdisclosingprovisions
AlldisclosingentitiesmustfilethisinformationwithASIC
ListedentitiesmustalsofilethisinformationwiththeASX.

AuditRequirements
TheCorporationsActrequiresanauditedreporttobeobtainedonthe
following:
Alldisclosingentities
Allpubliccompanies
Allregisteredschemes
Smallproprietarycompaniesundercertaincircumstances.

Theauditorofapubliccompanyordisclosingentityisgenerally
appointedatanannualgeneralmeetingoftheshareholders,andgenerally
bythedirectorsforaproprietarycompany.

Auditorsmustreporttomembersastowhether,intheiropinion,the
financialreportisinaccordancewiththeCorporationsAct.Theauditor
mustadditionallyreportcaseswhereproperfinancialrecordshavenot
beenmaintainedandwheretheywereunabletoobtainallthenecessary
informationtoproperlyconducttheaudit.

Accountsrequiredtobefiledonahalfyearlybasismaybeeitheraudited
orreviewed.Ifreviewed,theauditormuststatewhetherornotthe
accountscomplywithrelevantrequirements.

FilingofAccounts
CompaniesareobligedtofileanAnnualCompanyStatementwithASIC
ontheannualreviewdate,whichistheanniversaryofthecompanys
registrationdate.

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Thisstatementmustbesignedbyadirectororthecompanysecretaryand
includedetailsofthecompanyssharecapital,listtheshareholders,
providethedirectorsandsecretarysparticulars,aswellasanyother
pertinentinformation.

Publiccompaniesandauditedprivatecompanieshavetofiletheir
financialstatementsannuallywithASIC.Thesemustbefiledwithin90
daysoftheendofthefinancialyear.
Disclosingentitiesareobligedtofileanadditionalhalfyearreport,which
mustbelodgedwithin75daysoftheendofthehalfyearperiod.

CompanieslistedontheAustralianStockExchangemustalsosubmittheir
financialstatementstotheASXwithin75daysoftheendoftheyearor
halfyearperiod.

AforeigncompanyoperatinginAustraliagenerallyhastofileitsfinancial
statementsannuallywithASIC.Thesestatementsarethoserequiredbythe
regulationsofthecountryinwhichthecompanywasincorporated.

AccountingProfession
Accountantsinpublicpracticeorsenioraccountantsinbusinesswill
generallybelongtoeithertheInstituteofCharteredAccountantsin
AustraliaorCPAAustralia.

MembershiptoeithertheInstituteorCPAAustraliaisobtainedifthe
applicantisovertheageof21,hascompletedthreeyearsfulltime
employmentwithamemberfirmandpassedwrittenexaminations.

AuditorsofcompanieshavetoberegisteredwithASIC.

Eachaccountingbodyhasdifferentrequirementsforqualifiedaccountants
fromothercountrieswishingtopracticeinAustralia.

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8.

Business and Executive Migration to

Australia

Australiahasastronglycontrolledmigrationregimewithmigration
mainlyregulatedbytheMigrationAct1958andtheMigrationRegulations
1994.

Atpresentapproximately150,000migrantsarepermittedintoAustralia
eachyear.Thistotalincludesskilledandbusinessmigrants,refugeesand
familyreunionsandeachcategoryofmigranthasarelevantvisa.

Visarequirements
Australiaactivelyencouragesskilledandbusinessmigrantswhomakeup
thelargestproportionofmigrants.Skilledmigrantvisasarenormally
basedonapointssystemwithmostpointsbeingawardedforoccupation,
education,ageandEnglishlanguageability.

Businessmigrantvisasaregrantedtoapplicantswithskillsgainedfrom
workingintheirownbusinessortothosewhohavebeenexecutivesof
largeandnongovernmentinstitutions.Inrecentyearsthetotalbusiness
migrantallocationhasnotbeenmet.

Thereareanumberofbusinessvisas,eachhavingparticularrequirements.
Apermanentresidencevisa,knownasaBusinessTalentVisa,canbe
grantedtomigrantswhomeetparticularbusinessskillsandqualifications.
Theseinclude:
Asetminimumlevelofownershipinabusinesspriortomigration
Managementataseniorlevelinthebusiness
Thebusinessmusthaveattainedaminimumlevelofassetsand
turnover
Themigrantmustbeunder55yearsandhavefunctionalEnglish
ThemigrantmustbeabletobringtoAustraliaatleastAUD$1.5
million.

Themajorityofbusinessvisas,however,areprovisional.Theyaregranted
toprospectivebusinessmigrantsnotabletomeettheBusinessTalentVisa
requirements.Insteadthemigrantisrequiredtomeetareducedsetof
criteriabothbeforearrivingandonceinAustralia.Thisusuallyincludes
bringingacertainamountofcapitalintoAustralia,andstartingor
purchasingabusiness.Oncethesecriteriahavebeenmet,themigrantcan
thenapplyforapermanentvisawithlowerrequirementthantheBusiness
TalentVisa.

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Businessvisarequirementsarecomplicatedandthechoiceofbusiness
structureandhowitisappliedmayhaveacriticalimpactonresidency,
taxationandcommercialissues.In2006/07,1,076businessvisaswere
cancelledbecausethemigrantsconcernedhadnotfulfilledtheirparticular
visarequirementscorrectly,unknowinglyinmanycases.

StateandTerritorysponsorship
ThevariousStatesandTerritoriesarealsoabletosponsorbusiness
migrantswhodonotmeetthenormalcapital,ageorbusinessvisacriteria.
Migrantswishingtotakeadvantageofthesereducedrequirementshaveto
submitabusinessproposaltotherelevantStateorTerritory.

Unfortunately,thecriteriaandrequirementsvaryfromstatetostatewith
somestatesrequirementsmoreonerousthanothers.

Theareasthatwillimpactmostonthebusinessmigrantarethebusiness
proposalrequirementsandmoreimportantly,employmentrequirements
ofthemigrantsnewAustralianbusiness.

Prospectivemigrantsshouldbeawareoftheemploymentrequirementsas
theymaywelldeterminethemigrantsabilitytoconductasuccessful
business.

UHYHainesNorton,beinganationalassociation,isabletodeterminethe
requirementsofeachstateinwhichitissituated.Prospectivebusiness
migrantsshouldinvestigatetherequirementsofthestatetheyintend
migratingto.

UHYHainesNorton
UHYHainesNortonisregardedastheleadingaccountancybodyassisting
businessmigrants.Therearepartnersandstaffineachofthesixoffices
whospecialiseinthisareaandwhounderstandtherequirementsapplying
toeachtypeofbusinessvisa.

UHYHainesNortonassistsbusinessmigrationclientsinfinding
businesses,conductingduediligences,aswellasarrangingintroductions
withbanks,solicitors,realestateagents,businessbrokers,andother
relevantinstitutions.

UKPensions
Fromthe6April2006theUKgovernmentintroducedfarreaching
legislativeandregulationchanges.

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Essentially,aminimum40%chargewillbedeductedfromaUKpension
unlessitistransferredintoaQROPS(QualifyingRecognisedOverseas
PensionScheme)approvedbytheUKInlandRevenue.

Inordertoencouragepeopletoinvestfortheirretirement,theAustralian
Governmentbasicallymadesuperannuationandpensionfundstaxfree
whenpeoplereachretirement.

Conversely,formerUKresidentswhodidnottransfertheirUKpensions
toAustraliamaybetaxedinAustraliaonlumpsumpaymentsandon
theirpension.

InmostcasesitisbeneficialforexUKmigrantstotransfertheirpension
fundstoAustralia.

UHYHainesNortoninPerth,arespecialistsintransferringpensionsto
Australia.Inthecaseofthosewithlargerpensions(generallyinexcessof
100,000),thesemaybetransferredintoselfmanagedsuperannuation
fundswithQROPSstatus.

BusinessProposals
UHYHainesNortonisalsoexperiencedincompilingbusinessproposals
forprospectivemigrantswishingtoapplyfortheStateandTerritory
sponsoredbusinessvisas.

Submittingtheapplication
Prospectivemigrantscanchoosetouseamigrationagentoropttosubmit
theirvisaapplicationsthemselves.However,becauseofthecomplexities
ofthedifferentvisas,itisrecommendedthatbusinessandskilledmigrant
applicantsgothroughareputableregisteredmigrationagentbasedeither
overseasorinAustralia.Visaapprovalsareoftendelayedorevenrefused
duetominorerrorsmadewhencompletingtheapplicationform.

Applicantsshouldensurethemigrationagentisregisteredwiththe
MigrationAgentsRegistrationAuthority(MARA).Thisbodywas
appointedtoregulatethemigrationadviceindustry.

UHYHainesNortonwouldbepleasedtorecommendreputableregistered
migrationagents.

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9.

UHY firms in Australia

UHYHainesNorton(Perth)
POBox1707
OsborneParkDCWA6916
Australia

Tel:
+61894443400
Website: www.uhyhainesnorton.com.au
Email:
rswarbreck@uhyhn.com.au

UHYHainesNortonisanationalassociationofindependentchartered
accountantfirmswithrootsdatingbackto1915.Thenationalassociation
wasformedin1984.

Itisinthetop25accountinggroupsinAustraliawithapproximately300
partnersandstaff.Wehaveofficesinthesixmajorcities.Weprovideafull
rangeofbusiness,taxandaccountingservicestocorporateandpersonal
clients.

Weofferthefollowingservices:

Assistancetobusinessmigrants

Businessdevelopmentandstrategicplanning

Corporatefinanceadvice

Accountingandaccountingsoftwareadvice

Auditandassurance

Taxplanningandcompliance

UKpensiontransfers

Retirementandestateplanning

Duediligences,investigationsandevaluations

Financialreporting

Liquidations.

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Perth

Busselton

Adelaide

Brisbane

Canberra

Melbourne

16LakesideCorporate,24ParklandRoad,OsbornePark,
WA,6017
Tel:61894443400
Fax:61894443430
Cont:RichardSwarbreckrswarbreck@uhyhn.com.au
Suite3,4648AlbertStreet,Busselton,WA,6280
Tel:61897523222
Fax:61897522374
Cont:JamesGasbarrijgasbarri@prtonline.com.au
25PeelStreet,Adelaide,SouthAustralia,SA5000
Tel:61881100999
Fax:61881100900
Cont:AllenBolaffiallen@uhyhn.com.au
1stFloor,99MaryStreet,Brisbane,Queensland,QLD4000
Tel:61732105500
Fax:61732296174
Cont:RowanWallacer.wallace@uhyhn.com.au
Level2,28UniversityAvenue,Canberra,ACT2601
Tel:61262305999
Fax:61262305355
Cont:MichaelSinclairm.sinclair@uhyhn.com.au
Level8,607BourkeStreet,Melbourne,Victoria,VIC3000
Tel:61396294700
Fax:61396294722
Cont:HaroldLouriehlourie@melb.uhyhn.com.au

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Sydney
Level11,1YorkStreet,Sydney,NSW2000

Tel:61292566600
Fax:61292566611

Cont:StephenGuthriesguthrie@uhyhn.com.au

FormoreinformationonUHYHainesNortonandourpeopleandservices
pleaseseeourWebsite:www.uhyhn.com.au

10. UHY offices worldwide

ForcontactdetailsofUHYofficesworldwide,orfordetailsonhowto
contacttheUHYexecutiveoffice,pleasevisitwww.uhy.com

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