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Must Know Rules to Buy a Business in Australia
Are you looking to buy a business? Australia is somewhat infamous for having a long list of rules and regulations regarding business investing. Although it can be frustrating—and sometimes difficult to keep pace—these laws are ultimately there to keep everyone safe and maintain a high standard of business practice. As an overseas investor, it’s important you verse yourself in them and comply accordingly when you buy an Australian business.
Some federal laws are a given for any business in Australia, whether it’s a restaurant, a pharmaceutical firm, or an e-commerce company. These include government taxation requirements, like paying GST, PAYG, and payroll tax. You need to meet these requirements, regardless of the industry or nature of your business.
Local rules for local companies
Next, you have specific laws in each industry. Take retail for example: to operate a lawful retail business, you need to comply with the Retail Tenancy Act, pay your employees award rates, administer responsible service of alcohol, and meet food health and safety regulations. And that’s just the beginning.
Remember, what may be okay in your country may not be okay here, so it’s up to you to make sure you properly understand all the Australian laws specific to your industry.
There are also layers of state legislation and local governance you need to meet, such as obtaining occupation certificates, DA approvals, and any other relevant approvals. For example, if you're roasting coffee or you've got a dog grooming business, you need approvals for what comes out of the business as waste, whether it's in the air or through the sewers—otherwise, the business may be trading without the right clearance in place.
Employment rules for overseas business owners
And there’s more: if you’re looking to invest in Australia, you may be coming on a business migration visa and there are laws that govern this. For example, the business must employ a minimum of two people in Australian residence full time, you need to invest a minimum of $250,000 into the business, and the business needs to yield a turnover of at least $250,000. Check these rules with a migration agent before you do anything.
Potential traps when you buy a business in Australia
Beware of immigration agents that claim to be a one-stop-shop, saying they can help you get a visa to stay in the country, and find an Australian business to invest in at the same time.
It might sound convenient, but look deeper. Often, these immigration agents aren’t properly licenced and don’t have the necessary knowledge. This means you could inadvertently wind up purchasing a business that isn’t a good investment—or worse, is in breach of the prevailing laws. Not only could you be setting yourself up for a business fail, you risk losing your visa and being kicked out of the country as well.
Get local advice for local businesses
I'm a true believer in going to an Australian accountant, whether they speak your language or not—although of course it’s ideal if you find one who can speak your native tongue as well.
Because they are governed by Australian laws themselves, they will communicate to you clearly which regulations are relevant to you, and will make sure they do the right thing by you and the law. From there on, you can buy a business in Australia confidently knowing you’ve ticked all the boxes, giving your investment business its best shot at success.
LINK NSW, Director
For further information about this article, contact your nearest LINK Business Broking Office.