What You Need to Know About Opening a Business in Australia
How to open a Business in Australia
Recently, we discussed the logistics of moving your company to Australia, from the legalities of registering your business to fitting into the right tax bracket. The actual process of getting approval to operate in the country is only the first part. Expats have an uphill climb as they acclimate to Australian work culture while trying to establish their companies.
As a new business owner in Australia, here’s what you need to know about finding a brick and mortar location, protecting yourself with insurance and finding the right talent to grow your company.
Buying and Renting Property
The first step toward putting down physical roots in Australia is buying or renting your brick-and-mortar location. For most small businesses, this is a relatively painless process, but challenges can arise for larger companies.
Oliver Jankowsky and Tony Macvean at Hall and Wilcox report that real estate acquisition by foreign companies may need the approval of the Foreign Investment Review Board (FIRB). If your property is worth less than 50 million AUD you should be OK, but anything close to that should be registered.
Along with understanding the legal ramifications of local real estate, some businesses might want to wait a few months to observe the market before buying — or even deciding what city to invest in.
“The easiest and often most informative method is to search online for other properties that are similar in size, location and/or purpose,” Emma Gilmour writes at Real Commercial. “You will very quickly get a sense of what is on the market and for how much. If you keep checking over time you will also be able to see which properties get rented and which ones don’t. And you will notice if rental prices are going up or down.”
This is particularly important if you’re opening your business in one of Australia's main hubs. According to Knight Frank’s Skyscrapers Index, Sydney is the seventh most expensive city in the world to rent office space, just behind notoriously expensive cities like Hong Kong, New York City, and Tokyo. Meanwhile, Melbourne was ranked 17th on the list, making it one of the more expensive cities in Australia, but comparatively cheaper than Sydney.
If renting an office or purchasing commercial space in Australia, save money when you convert Pounds to Australian Dollars.
Choosing the Right Insurance Policy
According to Understand Insurance, there are two kinds of business insurance policies that are required to legally operate an Australian business: worker’s compensation and compulsory third-party insurance. The first protects the company and employees when your workers are injured on the job. The second coverers any vehicles that your business operates.
These are the only two policies that are legally required, but many companies should also consider other forms of insurance that cover property, product liability and machinery.
When it comes to worker’s compensation, requirements vary by region and state. David Quezada at The Business Journals recommends hiring a lawyer or dedicated insurance agent to navigate the local laws, especially if you plan to open businesses in multiple parts of the country. Not only should this person help you find the best policies, but they should also help you implement strategies to make the environment safer for employees to lower your premiums.
Along with business insurance, you will also need to choose a corporate health insurance plan for your employees. According to HICA, there are 34 different health insurance companies competing to work with your company, and it can be hard to sort which ones are best for your business.
Their team recommends looking for plans that will cover your employees when they’re sick, but will also promote wellness through education and incentives. This is similar to the worker’s compensation plans. The preventative steps you can take today will save you and your company in the long run.
While insurance can be expensive, it’s better to err on the side of caution until you’re familiar with Australian laws and regulations. It can protect your assets in the off chance that you break a law that you were unaware existed.
Moving Employees to Australia
Australia is by far the most popular expat destination for UK citizens.
In an article for The Guardian, Liam Kelly writes that one in four Brits living abroad choose Australia as their home, totaling more than 1.2 million expats. Most people arrive with the help of a temporary skilled 457 Work visa which allows companies to sponsor employees for four years.
Beyond the UK, Australia is a popular expat destination. Ideally, this means your employees will be eager to relocate, even if it means traveling across the world.
While 457 work visas are the most common options for companies, you may encounter expats looking to get hired on the Working Holiday Visa. These visas appeal to young travelers who want to explore Australia for a year before settling into their careers back home. They’re also much easier to acquire.
Colin Heinrich at Go Overseas says these are actually digital visas (no actual passport sticker required) and can be acquired with either a bank statements proving access to at least 5,000 AUD, a credit card with the same limit, or a plane ticket leaving the country.
This is an ideal hiring option if you need more labor during the launch process and want to find temporary workers.
While sponsorship visas are convenient for companies looking to move employees or find low-cost labor, some politicians are trying to ensure Australian citizens are also benefiting from business growth.
Paul Karp at The Guardian reported in 2016 on a document from the Australian senate that proposed limitations on companies looking to hire foreign skilled workers. Among other provisions, the report suggested two major limitations:
Companies hiring workers on 457 visas should prove that 25 percent of their trades workers are apprentices.
Companies should be charged a 4,000 AUD levy for every 457 visa worker, which would go to government training programs for the Australian workforce.
This report from the senate is not law, but it does represent the views of multiple Australian politicians, and could set the tone for visa regulations in the coming years.
Understanding Australian Work Culture
Despite the similarities between Australia and the UK or Europe, there’s a unique office culture that could throw off some managers.
“Though Australians are relaxed in their manner and may be on a first name basis upon meeting you, it does not mean they take their business interactions lightly,” Lisa Cohen writes at The Eighth Village.
Punctuality is an important value in Australian culture. Meetings should be held on time, and everyone should still be treated with respect and professionalism, even if the general tone is more casual than other countries.
Gus Lubin at Business Insider has an interesting graphic that visualizes different leadership styles from around the world. Australia is drawn as a perfect circle, with the manager as “one of the mates” on equal footing. Essentially, managers are viewed as equals, and considered facilitators in the workplace instead of higher-ups.
“Once it is accepted that they will not pull rank, they actually exert much more influence ... as the semi-Americanized nature of Australian business requires quick thinking and rapid decision making.”
Furthermore, there’s a big difference between being laid back and lazy. Australians are incredibly dedicated to their work, almost to a fault. Matt Meakins joked that most Australians treat their employers like charities.
Australians give their employers more than $110 billion in free overtime hours each year.
40 percent of Australians say their work-life balance is worse off today than five years ago, and 50 percent feel pressured to work longer hours.
According to the OECD Better Life Index, Australia ranks 30 out of 36 countries for work-life balance, below the UK, Russia, and Norway.
If you can understand why your employees behave as they do, you can start to tailor your office and its culture accordingly.
Navigating Perks, Salary and Time Off
It’s standard for Australians to get 20 days of paid leave each year. Paid leave is one of the great differentiators around the world, so this number is likely to raise questions with any expat you hire.
“Americans are shocked at how many holidays we get, while the British are appalled,” Sarah Kimmorley writes at Business Insider. “The supposedly ‘more uptight Brits’ get 25 as standard- and up to 30 in many places.”
These vacation days and the work-life balance above will have a higher impact on your hiring and retention efforts than other perks. Out of 4,800 Australians that Seek interviewed, 33 percent of employees cited work-life balance as the most important factor when working for a company. Only two percent were attracted by perks, and 19 percent were attracted by salary. This suggests Australians value their time and family more than money.
Australians also value their time within the company. Amantha Imber, an innovation psychologist in Melbourne, found that the best employee perks weren’t massages or gym memberships, but freedom within the company.
“One of the powerful benefits for employees is time and being able to work on their own projects,” she said.
When a project reached completion, employees appreciated being rewarded with more time to pursue other projects or grow the one they just made.
This is something that other companies around the world have started to embrace, including Google. Their “20% time” gives employees parts of their day back to work on passion projects aside from their assignments.
Essentially, money and free meals can’t make work enjoyable, and an endless workday won’t make life enjoyable. Australians value their independence and time, and will respect employers who give it to them.
The Australian government is constantly trying to attract new companies, and the hard-working citizens do their best to keep them there. While your transition to this new country might be rocky at first, it should be smooth sailing once operations are up and running.
images by: ©peshkov/123RF Stock Photo, tpsdave, Unsplash, ©rawpixel/123RF Stock Photo
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