Australia Business Services Overview About Australia Setting up a Business in Australia
The Commonwealth of Australia is a federation of six States (New South Wales, Victoria, Queensland, South Australia, Western Australia and Tasmania), two internal Territories (Northern Territory and the Australian Capital Territory) and a number of minor external Territories).
A written Constitution divides power between the central Federation Parliament, located in Canberra in the Australian Capital Territory, and eight State and Territory Parliaments. The Constitution gives the Federal Parliament legislative power over various areas relevant to foreign investment including corporations, taxation, international and interstate trade and commerce, communications, banking, insurance, bankruptcy and insolvency, intellectual property, immigration and industrial disputes. Each State has legislative power to make any laws it desires, except in relation to a few matters reserved to the Federal Parliament. Federal law prevails over State or Territory law to the extent of any inconsistency.
There are two sources of law in Australia, statute law and common law. Statute law is the body of legislation enacted by the various levels of Government, and includes subordinate legislation such as regulations, rules and by-laws. Common law is the body of decisions of the various Federal and State and Territory courts.
Each state has its own court system, consisting of a Supreme Court and a number of minor courts. The Federal Government has its own court system consisting of the High Court, the Federal Court and the Family Court. The High Court hears appeals (if leave is granted) from the Federal Court and the State Supreme Courts. In addition, there are numerous panels and tribunals administering particular areas of law, such as industrial relations, equal opportunity and the Takeovers Panel.
The population of Australia is 21.5 million occupying a continent similar in size to that if the United States.
Australia is a prosperous, western style economy with a GDP per capita income similar to those of the UK, France and Germany. The Australian economy is dominated by its services sector which accounts for 70% of GDP. The agriculture and mining sectors, which account for 10% of the GDP, represent approximately 60% of the country's exports.
The legitimate goal of the Government is for Australia to become a competitive producer and exporter, and to this end the Government has implemented a program of economic reforms focusing particularly on the labour market, Union involvement, deregulation of industries and the privatisation of monopolies.
The influence of China and the Tiger economies has automatically helped export lead growth and the short to medium term outlook is for stable expansion, coupled with continuing economic reform.
Australia is an industrial nation with a mixed economy, growing broadly along the lines of other OECD countries.
Traditionally, the nation's wealth came from agriculture with wool, meat and sugar topping the list. While an increasingly diversified agricultural sector continues to be important, manufacturing, minerals and services have all grown in value.
In fact the services sector is the fastest growing in Australia's economy. Finance, property, tourism and business services are attracting large investment from both domestic and overseas sources.
Australia is rich in minerals and exports significant quantities of coal and aluminium, iron ore, copper, lead, zinc, gold, diamonds, nickel and minerals sands. Plentiful energy resources, coal, oil, natural gas and uranium- contribute to export earnings and allow low energy prices. In turn, this has encouraged the competitive development of energy-intensive industries, aluminium, iron and steel.
With the introduction of technology on a wide scale, Australia is now among the world leaders in areas of scientific application, such as fibre optics, micro-electronics, medical equipment and telecommunications.
Australia manufactures and exports a wide range of goods, including pharmaceuticals, information and communications technology, paper products, steel, chemical and plastics, machinery, motor vehicles, and processed food.
The robust construction industry is also a significant contributor to Australia's economic activity.
Australia is one of the largest economies in the Asia Pacific region after Japan, China and Korea. The European Union, as a single entity, is Australia's largest trading partner, followed by Japan and the USA.
Australia's time zones span the close of business in the USA and the opening of business in Europe.
Australia has an affluent domestic market. Home, vehicle and personal computer ownership is amongst the World's highest.
Prime office space in Australia is the lowest-priced in the developed region and amongst the most competitively priced in the World according to the Global Office Occupancy Costs Survey 2009. Australia's telecommunications costs are also amongst the lowest in the region.
Australia is a leading financial centre in the Asia Pacific region. Its stock exchange is the second largest in the region after Japan and its financial futures exchange is the regions largest. Its alliance with markets throughout the region is increasingly providing business people with a comprehensive range of financial services in the Asia Pacific region (cf. DFAT, Australia: The new centre of global finance and www.asx.com.au).
The official currency of Australia is the Australian dollar (AUD or AUST$). It is a relatively free-floating currency.
Australia has exchange control regulations although since financial deregulation in the 1980's the regulations have had a restricted application and now have little impact upon most transactions. There are generally no restrictions on the transfer of funds into Australia but reporting requirements may apply to certain transactions under the Financial Transactions Reports Act (Austrac) in relation to cash movements.
The Reserve Bank of Australia is Australia's central bank, responsible for monetary and banking policy. It also supervises the Australian banking system in accord with international guidelines.
The banking sector in Australia comprises major Australian and International banks. Australian banks are well capitalised.
In addition, there are well over 100 merchant banks operating in Australia, and a substantial number of other financial institutions, such as credit unions, finance companies and building societies, providing a wide range of financial services.
The Commonwealth Development Bank and Primary Industry Bank of Australia support small business and the rural sector with development finance, while the Australian Industry Development Corporation offers finance to industry and participates in major development projects.
Finance may be raised in Australian capital markets by a wide variety of means and a number of innovative financing techniques have been used in recent years. International capital raisings are also common.
As a protection to the investing public, there are restrictions on public capital raisings, other than by banks and other financial institutions which are subject to similar regulations (such as building societies and credit unions). One such restriction is that an approved prospectus may be required to be issued before funds can be raised.
The six principal stock exchanges in Australia are in Sydney, Melbourne, Brisbane, Perth, Adelaide and Hobart. These exchanges have amalgamated and now operate as a unified national stock exchange, known as the Australian Stock Exchange Limited ("ASX"). The ASX is an active stock exchange, on which a number of international companies have obtained listing in recent years. A spread of Australian shareholders is a precondition to the listing of an international company.
Listed companies are required to comply with applicable securities and takeover laws and with the ASX Listing Rules.
Takeovers are regulated under the Corporations Act, 2001. The Act applies to all companies and not only to listed companies, although there are a number of exemptions available.
The Companies Act is overseen and administered by the Australian Securities & Investments Commission ("ASIC").
The Australian Government welcomes and encourages foreign investment consistent with community interests. Australia's screening process for foreign investment is transparent and very liberal. The Australian Government has the power to block proposals that are required to be notified and which are determined to be contrary to the national interest.
The Foreign Investment Review Board (FIRB) is a non-statutory body that examines proposals by foreign interests to undertake direct investment in Australia and makes recommendations to the Australian Government on whether those proposals are suitable for approval under the Australian Government's policy and in compliance with the Foreign Acquisitions and Takeovers Act 2010 (FATA).
FIRB can also provide information on Australia's foreign investment policy guidelines and provide guidance, where necessary, to foreign investors so that their proposals may be in conformity with the Australian Government's policy.
Please refer to the government website (http://www.firb.gov.au) for details regarding the types of investment proposals which require FIRB approval.
Australia is a politically stable, prosperous and peaceful country. It has a federal system of government, under which the States retain considerable power and autonomy. There is a Federal Government and each of the six States and two Territories of Australia has a separate government. There is also an independent system of local government which operates at a municipal level.
Australia is a democracy and has a written constitution. Federal Parliament is comprised of two houses, the House of Representatives (the lower house) and the Senate (the upper house). The House of Representatives is responsible for introducing legislation, the Senate being more a house of review.
The parliamentary system is based on the British Westminster model. The Federal Parliament sits in the national capital, Canberra. Australia has full adult suffrage (18 years of age and over) and voting is compulsory for all three tiers of government.
The federal government is head by the Prime Minister, who must be a member of the lower house. Other ministers can be members of either house. The federal government looks after the national economy, foreign policy and defence, social services, immigration and the postal service. It also collects most of the taxation.
State and territory governments are run on similar lines to the federal one, but the leader of the government is known as the Premier. Queensland does not have an upper house. State governments are mainly responsible for education, health, transport and natural resources. Since they raise most of their revenue from the business community they compete strongly to attract new industry.
The third tier is local government. This controls such functions as urban and country roads, rubbish disposal and building codes.
Australia is a monarchy. The United Kingdom's king or queen is also Australia's, and is represented by a Governor General and state Governors. They are nominated by the respective governments and the nominations are ratified by the monarch. The power these governors exert is mainly ceremonial. There was a much spirited debate about the country becoming a republic, a referendum in late 1999 on this issue voted to keep the current system.
The Australian legal system is independent of politics. The traditional links with Britain have been shed, too. The Commonwealth and the states each have their own judiciaries and police forces.
Australia has a written Constitution. The legal system in Australia is a mixture of common law and statute similar to the legal systems in the United Kingdom, other Commonwealth countries and some European countries. The common law tradition, which applies in Australia, values and expects judicial independence. Decisions of the courts conform with due process and are made in the context of prevailing law. Contractual arrangements are therefore protected by the rule of law and the independence of the judiciary. Both domestic and foreign companies and persons have the same standing before the law.
The Australian government recognises the need for a regulatory framework to keep pace with financial market developments. The Government has just now completed a major reform of Australia's corporate law, aimed at streamlining regulation while maintaining market integrity and investor protection.
Australia's total population is just over 21 million with an average of 1.171% growth per annum. The majority of this population is situated in the eastern States of New South Wales, Victoria and Queensland.
Australia originally occupied by indigenous people for over 40,000 years, was later settled by the British in the 18th Century. Australia today is an increasingly diverse multicultural nation comprising people from more then 170 races, with one of the World's best lifestyles.
Australia's education system produces world-class graduates in all disciplines (Each year, three times more engineers, six times more scientists and nearly ten times more economics and business management students graduate from Australian universities than from Singapore's and Hong Kong's combined).
Around 42 per cent of Australia's working age population has a university degree, diploma or trade qualification.
Computer ownership is high and technology is embraced at levels amongst the highest in the World.
Australia is a harmonious community which has benefited from an active program of immigration over the last 50 years. One in every 20 inhabitants is Asian-born and Chinese is set to overtake Italian as the most commonly spoken language in Australia, other than English.
There is a strong and enduring tradition of democracy in Australia where rule of law and regulatory frameworks prevail.