One of the most significant benefits of overseas expansion is tapping into new talent pools. If you’re exploring your options for a new market, we’ll help and explain the basics of Australian employment (readers can find more details on our Australia International PEO page).
Life down under is diverse, full of adventure, and welcoming to foreign investors. In Australia, entrepreneurship initiatives, high incomes, and a thriving economy encourage new business development. Also, these make the country the perfect option for your business’ international growth.
Setting Up a Legal Entity in Australia
Businesses with large teams (100 or more) will fare better if they enter the Australian market through a permanent subsidiary. There are four types of business structures in Australia, but if you require complete control of compliance and hiring, you will most likely set up a company.
Setting up a company in Australia is expensive and time-consuming. It can take months and tens of thousands of dollars to get established before you can start the Australia employment process. If you’re fully committed and past the market testing phase, then this could be the best route for your overseas operations. Essential attributes for the Australian company structure are:
- It’s a separate, legal entity
- Benefits from limited liability
- Involves high start-up and maintenance costs
- Must understand and comply with requirements under the Corporations Act 2001
- Registered for goods and services tax (GST) if the annual GST turnover is $75,000 or more
- Requires an annual company tax return to be lodged with the ATO
If you’re not 100% sure about which direction you should take for international operations and Australia employment, you can always enter the market with a flexible hiring solution. Let’s explore these options below.
Flexible Options for Australian Employment
Your company doesn’t need to establish a full-fledged foreign subsidiary to begin hiring employees in Australia. Thanks to global expansion innovations, there are options for hiring overseas through outsourced employment models that are perfectly acceptable for many companies.
Many businesses use International PEO to hire employees, assist with work permits and draft contracts during the startup phase of global expansion. This is an employer of record approach and is a wonderful solution to stay flexible while remaining compliant during the beginning stages of market entry.
If your business strategy is successful after six to 12 months, you can transfer your Australia employment over to your established company structure.
Australian Employment: Be Careful with Independent Contractors
Despite the risks, some employers choose to work with independent contractors overseas to avoid establishing a legal presence in-country. In Australia, courts can ultimately determine the relationship between worker and company. Even if you’re in a non-employee agreement with a contractor, if the relationship is deemed otherwise, then you’re subject to fines, taxes, and penalties for not having a legal entity in-country.
Courts determine if a worker is an employee or an independent contractor by the following factors:
- Documentation & Agreement
- Payment Structure
- Tax Arrangements
- Degree of Autonomy
In addition, sham contracting laws make it unlawful to characterize employment relationships as independent contractor relationships. To avoid conflicts, you should consult with an international consultant before engaging with independent contractors overseas.
We can help your company with Australia employment. Velocity Global specializes in Employer of Record services and international expansion. Our goal is to help you get into your target country quickly and easily. We look forward to chatting with you!
Updated on 11/11/2019