How to Start a Business in Australia (Step-by-Step for Locals and Migrants)
To start a business in Australia, apply for a free Australian Business Number (ABN) through the Australian Business Register, choose your structure (sole trader or Pty Ltd company), register a business name with ASIC if you trade under anything other than your own name, and register for GST once your turnover hits or is expected to hit $75,000. Most local founders can be legally trading within a few days for well under $700. Migrants need to confirm their visa permits self-employment first.
That is the short version. The rest of this guide fills in the parts the templated "2026 edition" checklists skip: the real all-in cost, the state-by-state differences nobody warns you about, and exactly which visas let a foreigner own and run a business here.
The fast path: how to start a business in Australia in 6 steps
- Confirm you're allowed to. Citizens and permanent residents: skip to step 2. Temporary visa holders: check your visa conditions first (see the migrant section below). An ABN application asks for a Tax File Number, and your visa status affects both.
- Pick a structure. Sole trader (free, fast, simple) or Pty Ltd company ($636 from 1 July 2026, more protection). More on this below.
- Get your ABN. Free, online, often issued instantly at abr.gov.au. You legally need one before you invoice clients or register for GST.
- Register a business name with ASIC if you're trading under a name that isn't your own legal name. $47 for one year or $108 for three years (from 1 July 2026).
- Register for GST if your turnover is $75,000+ (or you expect it to be). Done through the ABR or your myGov/ATO portal.
- Sort the operational basics: a business bank account, insurance, and bookkeeping. These are the bits that quietly sink first-year founders.
You do not need an office, a lawyer, or an accountant to start. You may want an accountant before you choose your structure — that one decision affects your tax for years.
Sole trader vs Pty Ltd: the decision that actually matters
This is the choice that trips up most new founders, so let's be specific.
| Sole trader | Pty Ltd company | |
|---|---|---|
| Setup cost | $0 (just an ABN) | $636 ASIC fee (from 1 Jul 2026) + setup help |
| Ongoing cost | Minimal | ~$342/yr ASIC review + higher accounting fees |
| Tax rate | Your personal rate (up to 47% + 2% Medicare levy) | Flat 25% (base rate entity) or 30% |
| Personal liability | Unlimited — your house is exposed | Limited to the company (with caveats) |
| Best for | Freelancers, side hustles, low-risk services | Trades, anything with contracts, clients, or growth plans |
| Admin burden | Low | Higher (director duties, ASIC filings, separate tax return) |
The honest rule of thumb: start as a sole trader if you're testing an idea or freelancing, and switch to a Pty Ltd the moment real liability or real profit shows up. A graphic designer billing $40k a year is fine as a sole trader. A subbie who's one job-site accident or one client dispute away from being personally sued should be a company from day one.
On tax specifically: people hear "25% company rate vs 47% personal rate" and assume the company always wins. It doesn't. Company profit is taxed at 25%, but the moment you pay yourself a dividend you pay personal tax on it (offset by a franking credit, so no double taxation). The company structure mainly wins when you're reinvesting profit or earning well above the average wage. Below roughly $90k of business profit, a sole trader is often simpler and cheaper once you count accounting fees. Get this modeled for your numbers before you commit. The ATO's business structures guide is the neutral source.
What it really costs in year one
Free ABN and a $47 business name make the headlines, but here's a realistic all-in picture for three common business types. These are ballpark Australian dollars, not guarantees.
| Cost item | Online store | Trade business | Professional services |
|---|---|---|---|
| ABN | $0 | $0 | $0 |
| Business name (1 yr) | $47 | $47 | $47 |
| Pty Ltd registration (optional) | $636 | $636 | $636 |
| Accountant setup advice | $300–$800 | $300–$800 | $300–$800 |
| Public liability / professional indemnity insurance | $500–$1,200/yr | $800–$2,500/yr | $700–$2,000/yr |
| Accounting software (Xero/MYOB) | ~$360–$840/yr | ~$360–$840/yr | ~$360–$840/yr |
| Website / store platform | $400–$2,000 | $300–$1,500 | $300–$1,500 |
| Initial stock / tools / equipment | $2,000–$15,000+ | $3,000–$20,000+ | $0–$2,000 |
| Realistic first-year total | $4,000–$20,000 | $5,000–$25,000 | $2,000–$8,000 |
The number that sinks people isn't on this table: cash flow timing. New businesses routinely underestimate how long it takes money to actually arrive. GST refunds run on quarterly cycles, clients pay on 30-day (or 45-, or 60-day) terms, and your costs are weekly. Budget for 3–6 months of runway on top of your setup costs. Undercapitalisation, not bad products, is what closes most first-year businesses.
Do I need an ABN before I trade, and do I need GST straight away?
Two of the most-asked questions, answered plainly:
- ABN: Get it before you start invoicing. It's free and usually instant, so there's no reason to delay. Without an ABN, other businesses must withhold 47% of any payment to you. You can technically apply after a first informal sale, but get it sorted in week one.
- GST: You only must register once your annual turnover hits $75,000 (or you reasonably expect it to). Below that, registration is optional. Registering early lets you claim GST credits on your setup purchases, but it also means adding 10% to your prices and lodging Business Activity Statements (BAS) quarterly. For a low-revenue side business, staying under the threshold keeps life simpler. Taxi and rideshare drivers must register for GST regardless of turnover.
The state-by-state trap nobody mentions
Almost every guide treats "Australia" as one jurisdiction. It isn't. Federal things (ABN, GST, company registration, the Fair Work Act) are national, but a lot of what affects your wallet is set by your state or territory:
- Payroll tax kicks in only once your total wage bill crosses a state threshold — and the thresholds vary wildly. NSW is around $1.2M, Victoria around $900K, Queensland around $1.3M. Most new businesses are nowhere near these, but if you scale a team fast, where you're based matters.
- Licenses and permits are state- and industry-specific. A café, a beauty salon, an electrician, and a tutoring business each need different approvals — and they differ between, say, Queensland and WA. Use the free Australian Business Licence and Information Service (ABLIS) to generate a checklist for your exact industry and location. This is the single most useful tool most founders have never heard of.
- WorkCover / workers' compensation is run by each state's scheme. The moment you hire your first employee, you must take out cover through your state's insurer.
Skipping the licensing check is a classic, expensive mistake. Don't assume "online" means "no permits" — selling food, alcohol, supplements, or financial advice online triggers approvals regardless.
Can a foreigner or non-resident start a business in Australia?
Yes — but two separate questions get tangled together, so let's split them.
1. Can a foreigner own an Australian business? Yes. There's no citizenship requirement to own an ABN-registered business or be a shareholder of a Pty Ltd. However, every Australian company must have at least one director who ordinarily resides in Australia. If you're offshore, you'll need a resident director (a local partner, or a paid resident-director service).
2. Can a foreigner live in Australia and run it? That depends entirely on your visa. This is where the big 2024–25 changes matter, and where most older articles are now flat wrong:
- The Business Innovation and Investment visa (subclass 188) and its 188A/188B/888 streams are closed to new applications (since mid-2024). Don't waste time on them.
- The Global Talent visa is also closed. It was replaced on 7 December 2024 by the National Innovation visa (subclass 858) — a direct permanent residency visa for genuinely high-achieving founders, researchers, and entrepreneurs in priority sectors. It's invitation-only, has a very high evidence bar, and isn't a route for an average small-business starter.
- Many people instead build a business while on another visa that permits work — for example certain skilled, partner, or student visas. Conditions vary, and a student visa's work-hour limits can apply to your own business too.
The practical takeaway for migrants: confirm your specific visa's conditions before you spend a dollar. Check your grant letter and conditions on VEVO/Home Affairs and, for anything involving residency or a new visa, talk to a registered migration agent (MARA-registered) — not a forum. Our broader playbook on building a business as an immigrant, from visa to success walks through the mindset and sequencing that apply in any country.
If you're weighing Australia against other English-speaking markets, our companion guides on starting a business in Canada and starting a business in the UK use the same structure so you can compare costs and visa pathways side by side.
Your first-week checklist
Copy this and tick it off:
- [ ] Confirmed I'm legally permitted to run a business (visa conditions checked if applicable)
- [ ] Decided: sole trader or Pty Ltd (modeled the tax with an accountant if profit is meaningful)
- [ ] Registered for ABN (free, at abr.gov.au)
- [ ] Registered business name with ASIC (if needed)
- [ ] Checked ABLIS for the exact licenses/permits for my industry + state
- [ ] Registered for GST (if at/above $75k turnover or claiming setup credits)
- [ ] Opened a separate business bank account
- [ ] Got public liability and (if relevant) professional indemnity insurance quotes
- [ ] Set up accounting software and a system for setting aside tax + GST
- [ ] Read the basics of the Fair Work Act before hiring anyone
That last point earns its place: hire one person without understanding award rates, penalty rates, and leave entitlements, and you can rack up underpayment liabilities that dwarf your startup costs.
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Frequently Asked Questions
Do I need an ABN before I start trading?
Get it before you invoice. It's free and usually issued instantly through the Australian Business Register, and without one, other businesses are legally required to withhold 47% of any payment to you. There's no reason to trade without it.
Sole trader or Pty Ltd — which is better for tax?
Neither is universally better. A sole trader pays personal rates (up to 47% plus the 2% Medicare levy) but has near-zero admin. A Pty Ltd pays a flat 25% on retained profit but costs more to run and you still pay personal tax on money you draw out. Below roughly $90k profit a sole trader is often simpler and cheaper; above it, or where liability is real, a company usually wins. Model it with an accountant.
How much does it really cost to start in the first year?
The legal minimum is tiny — a free ABN and a $47 business name. Realistically, budget $2,000–$8,000 for a services business and $4,000–$25,000+ for a stock- or equipment-heavy one, once you add insurance, software, a website, and an accountant. Then add 3–6 months of cash runway for slow-paying clients and GST cycles.
Do I have to register for GST straight away?
No. GST registration is only mandatory once your turnover reaches $75,000, or you reasonably expect it to. Below that it's optional — register early only if you want to claim GST credits on setup costs and don't mind lodging quarterly BAS. Rideshare and taxi drivers must register regardless of turnover.
Can a non-resident own and run an Australian business without living here?
You can own the business and be a shareholder from overseas, but every Pty Ltd needs at least one director who ordinarily resides in Australia — so you'll need a resident director or a local partner. Living in Australia to run it day-to-day requires a visa that permits self-employment, which you must confirm before committing.