This often tends to be a tax driven issue, but before going on to discuss the tax issues we must emphasise that in our view commercial issues should always be foremost in your mind - there is little point in planning to mitigate tax if your potential customers steer away from you because they are concerned about the nature of the business they are being asked to deal with.

So what are the choices? The most commonly encountered (in order of increasing complexity) are:

• Sole trader
• Partnership
• Independent limited company (whether private or public)
• Subsidiary of overseas limited company
• Branch of existing limited company
• Joint venture
• Trust-based structures
• Combinations of the above (eg partnership with a limited company as a partner)

Practically, the choices available will be reduced by the question of whether the Australian business is an extension of an already existing business (in which case the sole trader and partnership options are not relevant). Where a limited company already exists and will continue trading in its own jurisdiction our preference tends to be to carry out the initial stage of investigating the Australian market via an Australian branch structure. This usually allows the costs of travelling, researching the opportunities, exhibition costs, marketing, setting up an office, etc to be offset against profits of the overseas company, rather than being ring-fenced in an Australian entity and only capable of being relieved once profits are established in Australia. Once the Australian business starts to become profitable the entity can be separately established as a subsidiary or stand-alone company (the former is more usual).

By contrast, if you are starting a new business in Australia with no existing business activities outside Australia it is more likely that a sole trader or partnership will be appropriate.

However, the above does not hold true in all cases and professional advice should be taken - contact us to discuss your situation.

In spite of the above you should be aware that in all cases there will be a need to register your business with the authorities, and to have regard to the requirements for the registration of your business name.

Our sister company. Collett & Co Chartered Accountants can provide details on the tax and financial planning issues, with free factsheets available.

Alternatively please contact us to discuss your business plans.

Go Matilda - Your Gateway to Australia