Opening a Business as an International Student in Australia
Have a business idea, and have identified a gap in the market?
If the answer to the above is yes, then you should consider the idea of opening a new business in Australia.
Opening a business as an international student may seem intimidating; however, the same can be said for anyone going through the entrepreneurial path. The good news is that many of the difficulties that arise during this process can be minimised with proper planning and support.
We have selected a few points that will guide you during the journey of opening a new business as an international student.
As an international student, you are allowed to open a business in Australia, however, you must still follow the rules stated on your visa.
This means you are restricted to working 20 hours per week, and you also must complete the approved number of hours in your study load.
As you set up your business, you will need to select the business structure you wish to use. The four most common are:
- Sole Trader
The business structure you decide to use may impact how your business operates. In addition, the structure you choose can change as your business grows. Thus, if you begin your business as a sole trader, you may switch to another business company structure which may also result in new legal requirements such as new ABN. Once again, it all depends on the new structure.
Additional legal responsibilities come with being an entrepreneur, which will vary depending on the business structure selected.
The most crucial task you will need to complete is obtaining an Australian Business Number (ABN). You will use your ABN to:
- Register a business name
- Identify your business
- Pay GST (If your annual GST turnover is above $75,000)
- Apply for an Australian domain
Applying for an ABN as a sole trader, for instance, is a straightforward process. It is free to apply, and approval is usually granted upon completion of the application. However, in some instances, delays of up to 20 days can occur if the Australian Taxation Office requires more information.
For partnerships and company structures, we highly recommend guidance from a registered accountant to assist you with the requirements. In some instances, an Australian Company Number (ACN) may be required. depending on the business structure.
In addition to an ABN, you will also need to obtain a Tax File Number (TFN) from the Australia Taxation Office.
The type of business structure you decide to use will determine how you pay tax. For example, as a sole trader, you may be able to use your TFN solely. In contrast, a company must use other tax reporting methods, such as submitting a Business Activity Statement (BAS).
Making a Business Plan
A business plan should be considered the foundation of your business. There are multiple types of business plans (start-ups, expansion, project). Nevertheless, a shared theme is they all act as a guide for a business.
At a minimum, your business plan should include:
- Business Idea – What is your business going to be?
- Unique Selling Point – How is your business going to be different from a business already operating in the same industry?
- Business Market – Who is your customers/clients?
- Goals – What do you want to achieve and when?
- Finance – What will it cost you to start your business?
Your business plan should be as specific as possible as it will work as a roadmap to support your business growth. Not sure how to start one? There are numerous guides and templates available online that will support your journey.
There will be tasks that require skills you may not possess. Asking for help is not a sign of failure. However, not asking for help can impact the growth of your business.
If you are unsure of how to complete a task, outsourcing to someone with those specific skills may reduce some of those issues from arising. For example, reporting income for your business can be laborious and complex. Asking an accountant may prevent unexpected tax bills in the future.
In some instances, you may only require help for short-term tasks such as logo design, or support on a short project. Platforms such as Freelancer and Expert360 allow you to bring people in on a short-term basis.
It is important to remember that you need to reassess how your business operates as it grows. You may be required to change your business structure, employ staff, or outsource tasks.
As you complete your studies, your visa status may change. If you decide to stay in Australia, you should discuss your situation with a migration lawyer regarding any visa decisions.
With the right planning and preparation, opening a business as an international student Is not only achievable but also rewarding.
Disclaimer: Before committing to any decisions, you must ensure your visa conditions allow you to start a business. It is recommended that you consult with a migration lawyer and a registered accountant to ensure all legal requirements are met.