June 2004 - Association of Dutch Businessmen

BUSINESS
Brisbane
Australia
has a sophisticated
and stable banking
system. The
banking system
is regulated
by the Australian
Prudential
Regulation
Authority and has
capital adequacy
requirements
consistent with
other developed
countries.
the Federal and State Governments. Typically, an
accruals basis of taxation will apply to business
taxpayers, but in accordance with particular
taxation principles, rather than the financial
accounts of the enterprise.
Banking system
Australia has a sophisticated and stable banking
system. The banking system is regulated by the
Australian Prudential Regulation Authority and
has capital adequacy requirements consistent
with other developed countries. There are four
major banks (Australia and New Zealand Banking
Group, Commonwealth, National Australia Bank
and Westpac Banking Corporation), a number of
regional banks and a number of significant
European, American and Asian investment banks.
Non-bank financial institutions also operate within
the system (eg. credit unions, building societies,
friendly societies and finance companies).
Owning property
There is a relatively liberal approach to foreign
investment in real estate, except in the case of
developed residential real estate. All acquisitions
of Australian urban real estate by foreign interests
must be submitted to the FIRB in advance for
approval.
The regulations apply to options over urban
real estate, a lease of urban land or improvements
having a term of five years or more, the acquisition
of hobby farms and rural residential land and
financing or other arrangements providing for the
sharing of profits from investment in Australian
urban real estate. Interests in companies and
trusts that own or have interests in Australian
urban real estate where the value of that land
is more than 50% of the value of the total
assets of the company or trust must apply for
approval.
Normally acquisitions of urban real estate are
approved, providing they are not considered
contrary to the national interest. Acquisitions that
normally fall into this category include developed
non-residential commercial real estate, developed
residential real estate required by foreign-owned
companies operating a business in Australia to
accommodate senior executives, and vacant
residential land where continuous construction
is to commence within 12 months.
The purchase of residential apartments and
dwellings under construction or off-the-plan, in
addition to the purchase of non-residential
commercial real estate where the property is
valued at less than A$5 million are all considered
exempt. Exemptions also apply to purchases by
intending immigrants, Australian citizens who
are resident abroad and by foreign nationals
purchasing with their Australian citizen spouse.
Visas
As more Singaporeans, and other foreign nationals,
have started to do business in Australia, the
government has responded by developing a number
of reforms in legislation, immigration policy and
procedure to help companies conducting business
in Australia. Most helpful to companies, are changes
affecting business visitors and business-related
temporary residents, making it easier to apply
for the necessary visas. Temporary residence is
available for periods up to 4 years for those
whose employment is sponsored by an established
Australian business or an established overseas
business, those who are representatives of
an overseas supplier of services and those who
are establishing a business in Australia as an
independent executive.
Rewards and challenges
Doing business in Australia will have both its
rewards and challenges. It is a highly desirable
place to do business, substantiated by the many
international companies moving to Australia. In
setting up a business, it is important is to conduct
thorough research into doing business in Australia.
Bear in mind that Australia has three levels
of government (federal, State and local), and
therefore a plethora of laws and regulations. There
are a variety of resources available to businesses
and individuals. For those wanting further
information on doing business in Australia, they
can download a comprehensive booklet titled
“Doing Business in Australia” from the Clayton Utz
website, www.claytonutz.com. The law can be
complicated, so it is important to seek professional
advice.
This article has previously been published in the magazine of the British Chamber Singapore. With generous
consent of the author Michelle Owen
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Vol.14 • No. 6 • June 2004