The pandemic plunged the world into economic crisis—yet more than two years later, Australia has regained its luster as one of the world’s top places to do business. The country’s resilient financial system, paired with sound policies, sensible regulations and a highly educated workforce, offer investors a promising environment in which to gain returns.
The 2022 edition of Piper Alderman’s Doing Business in Australia guide highlights the country’s boundless opportunities, which stem in part from its excellent legal framework and strategic location. Proximity to the Asia-Pacific region, and steady relations with China, Japan, the United States, Singapore and the United Kingdom, further boost Australia’s business bona fides as well.
The country is a major exporter of gold, iron ore, coal, natural gas and beef; its massive resources efficiently support the production and processing of basic commodities. Energy and petroleum development is a key government strategy as it aims to meet local energy needs yet also benefit from exports. (Major imports include cars, refined petroleum, telecom equipment, freight services and computers.) Mining regulations vary by territory; Australia is investing in renewable energy to hit its greenhouse-gas reduction targets.
Australia’s extensive road and rail network, air and maritime transport, are economically vital, supporting (among much else) tourism, a booming sector responsible for about 3% of GDP. After a pandemic-induced dip, international tourists are now returning to enjoy the country’s natural beauty, relaxed lifestyle and friendly atmosphere. Australia’s highly stable parliamentary democracy offers a political environment conducive to business; state and local governments are mostly left alone to manage their own affairs.
Importantly, the efficient, transparent financial sector is a business catalyst as well. Modern infrastructure and thoughtful regulations make Australia the center for capital markets activity in the Asia-Pacific region. To boost foreign investment, successive governments have replaced protectionist policies with free-trade agreements.
Fintech companies play an increasingly big role as well, their operations streamlined by government collaboration with investors, regulators and educational institutions. Pro-business incentives have revolutionized the financial sector, and authorities are working hard to address regulatory gaps.
Its massive resources efficiently support the production and processing of basic commodities."
Australian law provides for alternative approaches to resolving disagreements outside the courts, a comprehensive dispute-resolution system—seen in (among other legislation) the Cross-Border Insolvency Act (2008), which harmonized and eased the management of business insolvency and bankruptcy.
Regulation to promulgate competition and fair dealing is outlined clearly in the federal constitution. Contract regulation, supervision of financial-service institutions and tax compliance both support businesses and safeguard consumers—laws that align with global trends in business legislation.
A variety of commissions and boards regulate various aspects of commercial activity. The Australian Competition and Consumer Commission (ACCC), for example, supervises compliance with competition, fair-trading and consumer laws. The Foreign Investment Review Board (FIRB) approves and reviews certain classes of outside investments, while the Reserve Bank of Australia oversees/regulates companies offering digital/online payment system services.
As our Doing Business guide shows, Australia promotes foreign investment. An open economy makes accommodating foreign investors easy, generating wealth, and expanding growth opportunities across the economy. The Australian Trade Commission (ATC) helps international companies establish operations here, giving investors information about the business environment (including opportunities in different sectors) and helping them identify suitable locations and potential partners. It also offers guidance on industry-development programs and government approvals.
All this makes foreign investment easy and acquisitions seamless. The Australian government has built strong legislative instruments, foreign policies and national-security measures to safeguard the country from unscrupulous and outright illegal businesses; legal and policy frameworks clearly outline noncompliance penalties to guide outside investors.
The law permits a variety of corporate structures; selecting one depends on factors like the relationship between partners, the nature of the business and the significance and degree of risks and liabilities. When forming a company, investors must also consider the regulatory and tax requirements of business transactions. Common structures here include sole trader, proprietary company, public company, registered foreign company, joint venture, trust and partnership. All have diverse limitations and regulatory requirements on ownership, management and taxation, among other issues. Businesses that require land or property to operate can acquire it through leasehold or freehold transactions overseen by FIRB when a foreign entity is involved.
Employment law is of course a crucial factor. Investors must understand that Australian law protects workers, requiring (among other things) that employers must pay pension funds for workers. They should also obtain workers’-compensation insurance to provide benefits to injured employees.
Other key employment matters include providing working parents with up to 18 weeks of paid parental leave; they are also entitled to up to two years of unpaid parental leave. Workers have legal means to challenge what they regard as unfair termination as well.
Australian immigration laws promote diversity. Reforms have been introduced at the federal level to encourage business migration, making it easier for investors to enter the country. Incentives in this area include the Business Talent Visa and Investor Visa, both designed specifically for business immigrants.
As a hub of innovation, Australia leads the way on protecting intellectual property such as artistic works, software, trademarks and designs, particularly through the Copyright Act (1968) and Designs Act (2003). Innovative, creative people thrive in such conditions.
Incentives for the digital economy abound as well. E-commerce has grown in tandem with increased connectivity: With more than 22 million internet users in Australia (85% of the population), investing in the digital economy provides immense potential benefits. The government takes privacy and security in this realm extremely seriously as well, with laws to curb money laundering, online fraud and more.
The country’s Criminal Code Act (1995) deals with corruption and bribery, discouraging companies and investors from using underhanded methods in their everyday dealings. Corruption commissions are in place to investigate any potentially problematic behavior by organizations or officials.
Regarding another vitally important economic sector, the Therapeutic Goods Act (1989) regulates businesses dealing with medicines, medical equipment, vaccines, sunscreens and cosmetics. Local laws ensure that companies involved with these products maintain the strongest ethical standards—and enjoy substantial legal protection as a result.
In all, Australia has become a leading investment destination—a Pacific oasis of innovation and entrepreneurship governed by smart regulations that streamline and support business investments of all kinds. Commercial law experts like those at Piper Alderman can help individuals and corporations navigate these regulations and maximize the opportunities, so abundant in Australia, for successful investment.
Tony is Piper Alderman’s managing partner and co-head of the International Group. He specializes in commercial property and has particular expertise acting in relation to retail and office developments, residential and mixed-use projects, commercial tenancies, community and strata title matters. Tony was named Adelaide “Lawyer of the Year” in Leasing Law in the 2019 edition of The Best Lawyers in Australia™ and has been recognized every year by Best Lawyers for Real Property Law since 2012, including being named Adelaide “Lawyer of the Year” in the 2013 edition for Real Property Law.
Gordon Grieve is Chairman of Partners, former managing partner and former Head of Dispute Resolution & Litigation at Piper Alderman. He also heads up the firms Energy & Resources and International Groups. He has high level experience in both the private and public sectors across all facets of major corporate transactions and commercial litigation. Gordon is recognized for Energy Law in the 2023 edition of The Best Lawyers in Australia™.