Australia is a fertile ground for business. The country’s economic stability and excellent foreign relations have made it a safe business avenue for all.
The exciting part is that it’s not difficult to start a business in Australia. It may or may not be successful, depending on your business idea and execution. But it’s not much of a problem to get started.
All you need is a business registration document and an Australian bank account. In this post, we’ll share the details of how to set up a business bank account in Australia.
Registering your business in Australia
Generally, there are four types of business entities in Australia. These include:
- Sole trader
- Partnership
- Trust
- Company
If you’re a sole trader, you can use your personal bank account to manage funds. But it’s a good idea to open up a proper business bank account for better management and easier tax filing.
In any case, however, you’ll need to register your business with the authorities and acquire an ACN or ABN number. Note that each type of business entity has a different set of registration requirements and tax liabilities.
Types of business bank accounts in Australia
In Australia, there are three types of business bank accounts. These include:
- Business Transaction Account
- Business Term Deposit
- Business Savings Account
A business transaction account is for day-to-day transactions to and from clients. You can receive money for your business and send money from your business to anyone around the world.
Some banks may charge a monthly fee for these accounts (20 AUD or so), while others may not. It depends on the services accompanying your account type.
Business savings accounts and term deposit accounts are for saving large amounts of money and receiving a monthly profit from the bank based on a fixed or variable interest rate.
You usually have to refrain from withdrawing money from these accounts for a contracted duration. If you don’t, you’re either penalised or your profit is reduced.
How to set up a business bank account in Australia
Once you’ve registered your business and determined the type of bank account you require, it’s time to open a business bank account.
Unlike many other countries, Australia does not limit its banking facilities to residents and citizens only. Tourists, visitors, foreigners, and international students can also open a business bank account if they have a registered business in Australia. But, of course, they will have to pay taxes.
So here are the 3 major steps of opening up a business bank account in Australia.
1. Choose a bank
The process begins with choosing a banking service. Here are the top 10 banks in Australia to help you get started.
We recommend conducting thorough research, from visiting the bank yourself to browsing customer reviews. At times, there can be some hidden costs to a bank’s services that only former or current customers can disclose.
With that said, there are four popular banks in Australia that you can trust right away. These are:
- Westpac
- National Australian Bank (NAB)
- The Commonwealth Bank
- ANZ (Australia and New Zealand Banking Group)
2. Check eligibility
Although Australia’s banking services are open to all, there are a few documents that you’ll require to apply for a bank account. Each bank has a different set of requirements when it comes to documents. But some common documents that you should expect to provide include:
- Full company name
- Australian company number
- Australian business number
- Proof of ID (of each member with over 25% share in the company)
- Full names of all company directors
- Australian regulator and company licence
- Certificate of registration or incorporation
- ABN/ACN registered office address
- Foreign tax residency information (if applicable)
- Annual audit (public document)
Take your time to assemble and compile these documents yourself if possible. Why so? Well, that’s because this process can improve your knowledge of the banking and financial systems in Australia. And it’s one of the six most essential things every entrepreneur should invest time in.
What’s more, Australian banks are very flexible when it comes to monetary eligibility. Most popular banks do not ask for a minimum monthly balance or an opening amount, so this process won’t be too much of a hassle for you.
3. Deposit money and activate your account
Once you have selected the bank and gathered the required documents, sign up on your respective bank’s website. They’ll guide you about how to proceed further.
Usually, you’ll have to visit the nearest branch, submit the required documents, fill out a few forms, and go through a few formalities, such as providing fingerprints, etc. When you’re through with that, you can deposit an amount and begin using your new business bank account.
Since it’s a business account, you can give controls and access to your finance team as well. For safety purposes, you’ll have to let the bank know who will be accessing your account.