When it comes to investing in international business expansion these days there is often hesitation – you tread lightly and scour Bloomberg Market Data Feed for any indication of positive trends.
As you search for the right overseas market to scale up your business or put down roots for your new start-up, Australia should be a serious contender.
Why Australia?
Political and Economic Climate
Australia is both a federation and a Commonwealth nation – some say a perfect blend of the American and Westminster systems of government. This blended system of government and the country’s strong democratic traditions mean that Australia is politically stable and effectively governed. The result is a resilient economy and a secure business environment.
Australia was one of the only OECD countries that did not experience a recession during the financial crisis of 2008-9, and while COVID-19 did hit its GDP growth rate quite hard in the first half of 2020, it bounced back in the second half, coinciding with stimulus packages and government initiatives across housing and business investments. Australia’s Reserve Bank says that GDP is expected to return to pre-pandemic levels by the middle of 2021.
Regulatory System
Australia has a centralised taxation system for most taxes that a business will incur, including income, capital gains, fringe benefit tax and so on. So, unless you are going to be dealing with levy taxes (like land taxes and the like) your only concern will be with one taxation authority: the Australian Tax Office.
Moreover, all corporations are governed by federal legislation which means that companies can operate all over Australia without the requirement of registering in various states.
Australia’s regulatory systems – including institutional frameworks, and regulations supporting finance and banking – are transparent and stable. This makes them relatively easy to navigate, even if you are entering the market from abroad.
Business Culture
Australia ranked 14th out of 190 economies for ease of doing business by the World Bank’s Doing Business survey. There are many reasons why Australia offers a business environment that is conducive for both the launch and growth stages of a company’s life cycle. Here are just a few of the most striking:- Open and transparent market – less systematic risk
- Ease of enforcing contracts through alternative dispute resolution – time and cost efficient
- Multicultural and multiracial nationhood identity which permeates through its business culture
- AAA credit rating – stable borrowing and lending environment
Where on the Island?
So the only question now is where in Australia should you go? That depends on the industry and market sectors which you plan on engaging with, for example:- Manufacturing – Sydney, New South Wales (NSW), Melbourne, Victoria (VIC).
- Technology – Sydney, New South Wales (NSW), Melbourne, Victoria (VIC).
- Food and Beverage – Sydney, New South Wales (NSW), Melbourne, Victoria (VIC).
- Professional Services, Finance and Banking – Sydney, New South Wales (NSW); Melbourne, Victoria (VIC) and Brisbane, QLD
- Mining and Steel – Western Australia (WA), Queensland (QLD);
- Agriculture – wheat and sheep (NSW, VIC, South Australia (SA), WA); sugar cane and vegetable (QLD); cotton (NSW, QLD); tropical fruits (NSW, QLD, WA, NT); beef (QLD, NSW); poultry (NSW)
Going forward
Australia is a home to many foreign businesses looking to make their mark – and is a serious candidate for any company looking to start off or expand across borders. This is just a snapshot of Australia’s business environment – if you would like to know more about how to choose the right market, checkout our blog series on Choosing the Right Market in 2021.
