Global Registration

How much does it cost to set up a company in Australia?

With the signing of Australia-India Comprehensive Economic Cooperation and Trade Agreement, the floodgates of opportunities have been opened for new businesses to set up their company in Australia and India. There are numerous questions and concerns about opening of a company in foreign jurisdictions. This article addresses one such concern which is about the cost to set up a company in Australia.  

Cost incurred in choosing a name for a company in Australia  

The first step in setting up a company in Australia begins with choosing a name for a company for the company. Following are the costs that a promoter may incur in choosing a name for the company in Australia:

1. Reservation of Company name: For the purpose of reservation of company’s name, the fee required to be paid is $52 AUD and the same needs to be filed under Form 410.
2. Extension of reservation of a company’s name:  If the promoters wish to extend the reservation of a company name the required fees to be paid amounts to $52 AUD which needs to be filed in Form 410.
3. Application to the minister for his/ her consent to use a company name: If the promoters make an application to the minister for his/her consent to use a company name, then the required fee to be paid is $1,274 AUD.    
4. Application to change a company’s name to omit the word ‘limited’: Where the promoters wish to makes an application for changing the name of the company to omit the word ‘limited’, the fee to be submitted is $422 AUD. 

Cost to set up a company in Australia    

Different costs have been prescribed for different kinds of businesses by the Australian government. The cost to set up a company in Australia is as follows:

1. Company with a share capital: If a promoter wants to establish an Australian company having a share capital, then the cost of registering the company is $512 AUD. The promoters need to use Form 201 for registering such company.  
2. Company not having a share capital: If a promoter wants to establish an Australian company not having a share capital, then the cost of registering the company is $422 AUD. The promoters need to use Form 201 for registering such company not having any share capital.
3. An Australian company under Pt 5B.1 by a body corporate that is already registered as a foreign company under Pt 5B.2 Div 2^[1]: For the purposes of registration of such a foreign company, an amount of $422 AUD is required. Such entities are registered under Form 202.
4. An Australian company under Pt 5B.1 by a body corporate that is not registered under the Corporations Act 2001: For the purposes of registration of such a foreign company, an amount of $512 AUD is required. Such entities are registered under Form 202.
5. A registered Australian body by a body incorporated or registered under a law dealing with the incorporation of associations: for the registration of such a Australian registered body, the registration fee required is $512 AUD. Such entities are registered under Form 401.
6. A registered Australian body by a body registered under another law of Australia: The promoters of such an entity need to pay registration fees of $512 AUD to the ASIC and the appropriate form under which such registration fees need to be paid is Form 401.
7. A managed investment scheme: The promoters of such schemes need to pay the highest fees among all the other entities which go up till $3,029 AUD and the appropriate Form is 5100.     

Other Costs incurred for setting up a company in Australia  

Apart from the statutory fees, a series of other costs are also incurred by the promoters for setting up a company in Australia. Following is a list of other miscellaneous expenditures and costs that the promoters of a new company may bear while setting up a company in Australia:

Wages for the staff: One of the most important costs in setting up a company is the salaries or wages to be paid by the company. The minimum wage rate in Australia is $20.33 AUD per hour and $772.60 per week. However, in order to attract the best of talent for your business, the promoters need to pay considerably more for such business.

Rent: Another significant cost in setting up a company in Australia is the cost of rent. The cost of rent depends on location to location in Australia. The rent costs are decided on per square meter per annum basis. So the commercial rentals can range as high as over a thousand AUD in Sydney and as low as less than $400 AUD in Gold Coast.

Professional Fees: During the initial time of setting up a company in Australia, a lot of compliances need to be done from both legal and accountancy sides. This leads to significant burden on the business during its nascent stages. No matter how significant the fees is, the promoters need to part with such amount of money in order to be on the right side of the compliances or else the company can land up in serious legal troubles which may hamper the its future growth prospects. Such services should not be seen as costs; rather they should be seen as catalysts for the growth of one’s business.

Insurance costs: No matter what the risk potential is of one’s business, the company needs to make insurance payments. Some of the most commonly availed insurances include: professional indemnity insurance, product liability insurance and public liability insurance. The insurance amount to be paid will depend upon a number of factors such as history of claims, type of business the company is engaged in and the insurance provider selected by the company.

Miscellaneous Costs: Apart from the above mentioned major costs, there are several miscellaneous costs which the company needs to bear while setting up a company in Australia such as vehicle rentals, office supplies, utilities, marketing fees etc.        

Conclusion 

From the above description, it has been made amply clear the costs a new business would incur in setting up a new business in Australia. These costs can vary from business to business. However, the statutory fees shall remain constant depending on the category of company incorporated in Australia. It is therefore advised to take assistance of professionals for a seamless process of setting up a company in Australia.          

Read our Article:Company Registration in Australia: A Procedure & Guidelines