Life and business in Australia.
Life and business in Australia.
Australia – one of the most highly developed countries, ranks third in the world in terms of living standards and its duration, ahead of Switzerland, the United States, Britain and Germany. According to the UN, the country is at one of the highest positions in terms of the level of comfort of residence, thanks to a stable economic and political situation, the world’s best system of free health care and a clean environment. The government does not spare money for the education system, built on the model of the UK & # 8212; diplomas of Australian universities are highly quoted in the world. There is no compulsory army service. Australians are good-natured and sociable, they live to enjoy life, and will do everything to make you feel as well. You can guarantee that you will not face prejudiced or hostile attitudes or facts of discrimination. A quarter of the Australian population was born outside of it; here emigrate from developed countries – Italians, Greeks and Germans make up a significant percentage of the population in some states. There are many Englishmen here traditionally. while the Russians settle in the UK, the British are moving to Australia, where climate is much better and more business opportunities. Russians in Australia are about two hundred thousand.
Business environment and tax system in Australia.
Inflation in Australia is minimal, racketeering is absent, the state at the state level actively supports business both by organizational measures and by direct financing (business grants are allocated on a competitive basis, usually on conditions of 50/50 with the applicant). The tax system is transparent and well-established, it does not contain punitive functions in relation to business. Legal forms of doing business include a private entrepreneur (Sole Trader), a closed company with limited liability (Proprietary Company – Pty Ltd), a public company, a trust, special forms for non-profit activities, housing maintenance, etc.
A limited liability company is the most common form for medium-sized businesses. A company may have one or two directors, but at least one director must be a permanent resident of Australia. The company does not have to have a secretary, but if it decides to have secretaries, then at least one secretary must be a resident of Australia. Mandatory: registration of the annual report, audit of the financial report, disclosure of revenues in the balance sheet and annual reports. Foreign exchange control is absent. Requirements to the authorized capital are absent.
A private entrepreneur, like all Australian residents, pays taxes from his annual income on a progressive scale: with income up to $ 18,000 there is no tax, with income up to $ 37,000, a tax of 19% for more than $ 18,000, with income up to $ 80,000 tax of $ 3,500 plus 32% for more than $ 37,000, with income up to $ 180,000 tax of $ 17,500 plus 37% for more than $ 80,000, with income over $ 180,000 tax of $ 54,500 plus 45% for more than $ 180,000. For all types of companies there is a single tax on profit of 30%. 10% VAT (GST) applies to almost all goods and services, it is mandatory for annual turnover of more than $ 50,000. The fiscal year ends on June 30, the tax return must be submitted to the Australian tax authority (ATO) no later than October 31. If the entrepreneur has overpaid taxes, the overpaid amount is automatically returned to him (tax return). Evasion from payment of taxes is considered as an administrative offense with imposing of penal sanctions.
Business immigration to Australia.
The system of attracting and incorporating foreign businessmen into the business is regulated in Australia for reasons not only of additional inflow of investments, but also of the economic effect generated by immigrants. This system, managed by the Australian Immigration Authority (DIAS), is regularly reviewed. The radical cancellation of existing business visas and the introduction of a new business immigration scheme occurred in 2012. The scheme is based on the expression of an entrepreneurial interest (EOI) sent to the authorities of the sponsoring state through the selection system of applicants (Skill Select). If the offer of the applicant is interesting, he receives an invitation to apply for a visa.
On a permanent visa 132 “Business Talent”, venture investors and entrepreneurs are invited with a successful business history. A prerequisite for the former is the financing of their project by the Australian Venture Capital Association (AVCAL) with an investment of at least $ 1 million (usually for a period of 4 to 6 years). AVCAL with a turnover of 29 billion dollars brings together 54 local and international financial sources and serves more than 500 companies. Here, bio and nano technologies, projects for ore dressing, water treatment, alternative energy, new building materials are in demand. Such projects, not in demand in Russia and Ukraine, have a great chance of success in Australia. The condition for obtaining AVCAL funding is the submission and protection of a standard business plan.
Conditions for entrepreneurs with a successful business history include the presence of net assets in the business of at least $ 1,500,000, including net business assets of $ 400,000 (not necessarily in one country). The total turnover in business is $ 3,000,000 in any two of four years before applying for a business visa. The assets must be ready for transfer to Australia within two years after obtaining a business visa 132. The applicant for a visa 132 requires knowledge of English at the functional level (IELTS certificate with an average score of 4.5). The age of the applicant must not exceed 55 years (the sponsoring staff can cancel this condition if it considers that the offer of the applicant will bring the state a significant economic effect).
Visa 188 “Business Innovation and Investment” (Business Innovation and Investment) is temporary and is intended for entrepreneurs who want to own and manage a new or existing business or make investments in the Australian economy. Its validity period is 4 years. Further, an entrepreneur can obtain a permanent visa 888, which gives him a full resident status.
Visa 188 has three streams:
“Business Innovation Stream” for applicants who have personal net assets, including net business assets of $ 800,000, and an annual business turnover of $ 500,000. The applicant’s age must not exceed 55 years (the sponsoring staff can cancel this condition) and He must score at least 65 points on a special assessment test (Points test). IELTS certificate with an average score of 5. Investor Stream for investors with three years of investment experience who are willing to invest in the state economy in the form of bonds at least $ 1,500,000 for a four-year period of time. Their personal net assets, including net business assets, should be $ 2 250 000. There are no requirements for annual turnover in business. The applicant’s age must not exceed 55 years (the sponsoring staff can cancel this condition). IELTS certificate with an average score of 5. “Significant Investor Stream” should be ready to invest in the state economy in the form of bonds at least $ 5,000,000. The applicant does not need knowledge of the English language, he does not pass the assessment test, his age irrelevant.
Business in Australia.
Almost all spheres of business in Australia are available for private capital (many activities require a license), but their profitability can be substantially less, and the competition is higher than in Russia and Ukraine. This applies to the restaurant business, densely occupied by Indians and Chinese, and the hotel. The average profitability of 15% -25% is considered acceptable. The profitability of a business for the delivery of real estate does not exceed 12%. Construction is more profitable.
Real estate in Australia is expensive, which is natural for countries with a high standard of living. According to this indicator, Global Property Guide analysts position the country somewhere between France and Germany. The profitability of construction reaches 40% when using local building materials (which are also relatively expensive). The organization of production (or supply) to Australia of building materials and products can have a profitability of about 80%. This business is good for entrepreneurs who intend to immigrate to Australia on the basis of the 188 visa of the most massive stream of “Business Innovations” from Russia and Ukraine, where the construction industry is in a stage of stagnation.
If you combine the supply of building materials to Australia and the actual construction in one company, then the profitability can reach 100% provided that low-rise buildings are assembled from high-availability parts and minimized use of heavy equipment. According to this scheme, tourist or entertainment complexes and mini-hotels can also be built. After sufficient capitalization for the Australian bank, the company can receive loan financing at 7-9% per annum with a loan calculation after the sale of the facilities. Australia is the only country that allows reinvesting in the construction of the next facility before the taxation of profits (negative leverage scheme), which allows to increase the capitalization of the company, and reduce the amount of tax. The construction business in Australia requires licensing.
The article is presented by ACD Inc (www.acd-inc.ru)
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