A presentation from UK Trade & Investment Australia, giving an overview of doing business in Australia for British companies. Also including tax and legal implications as well as Unipart Rail shares their story of doing business down under.

1. Nick McInnes, Director General
UKTI Australia & New Zealand
A presentation on Australian Business Opportunities for the
World Trade Fair in the Black Country

2. Agenda
Nick McInnes, Overview of the Australian market
Taxation considerations, Joelle Tabone, Partner, HLB Mann Judd
Legal considerations, Stephen Dobbs, Partner, Herbert Smith Freehills
Unipart Rail experience, Steven Scriven, Sales Director, Unipart Rail

3. Why Australia?
• You’ll feel at home immediately
• Over 1,000 UK companies and more Brits than in any other country
outside the UK
• Very similar business, legal and regulatory culture
• Strong economy, with good growth prospects
• Exchange rates make UK goods and services attractive
• Good trading links with fast growing Asia-Pacific nations

4. A comparison with Australia
Australia UK
Population 23.3 million 64.1 million
Global GDP ranking 12th (IMF 2013) 6th
GDP growth est. 2014 2.6% 2.9%
GDP per capita ($US
US$61,137 $43,803
2014)
Ease of doing business
(World Bank 2013)
11th 10th
Unemployment (July
2014)
6.4% (ABS) 6.4%
Land mass – sq kms 7 692 000 242 000

5. Australia: it’s bigger than you think

6. UK Exports to Australia

7. _

9. Opportunities in the Australian Market
Significant opportunities for UK companies in the following industries;
• Automotive
• Defence
• Oil and gas
• Construction services
• Life sciences
• Transport infrastructure
• ICT
• Education
• Financial and business services

10. Australian Aerospace Industry
• A$4bn industry
• Boeing manufacturing 787
components
• BAE servicing RAAF
• Australian Aerospace Ltd
manufacturing helicopters

11. Australian Automotive Industry
•Large market A$170bn
•Local car manufacturing
ceasing in 2017
•Imports of new cars
rising
•UK exports £800m+
•Online automotive parts
sales A$380m and
growing 7.5%

12. Transport: Major Road Projects
Major Road Projects
West Connex, NSW
East West Link, Victoria
Bruce Highway, Queensland
Opportunities
Construction
Design,
Project Management
Engineering,
Project Finance & PPP
Drainage,
CCTV,
Road safety management and
providers of building equipment,
materials, and supplies.

13. Rail Projects
State Project Estimated value
Queensland Bus and Train (BAT) Tunnel AU$5 billion
Melbourne Melbourne Rail Link Up to AU$11 billion
Western Australia Perth Airport Rail Link AU$2.2 billion
New South Wales North West Rail Link
Sydney Light Rail
AU$7.5 billion
AU$2 billion
ACT Capital Metro Light Rail AU$2.1 billion

14. Rail Sector Opportunities
•Advisory Opportunities
•Technical Standard Harmonisation
•Telecommunications
•Signalling
•Financing and PPP’s
•Maintenance and upgrading of
existing track
•Electrification
•Digital Railway

15. How UKTI can help?
•Passport to Export
•Gateway to Global Growth
•Export Market Research Scheme
•Overseas Market Information Service
•Trade show Access Programme
•Trade Missions
For further information, please contact:
Nick.McInnes@fco.gov.uk

16. Doing business in Australia
- Taxation Requirements
Presented by
Joelle Tabone
Partner,
Business Services
jtabone@hlbvic.com.au

17. Disclaimer
The content of this presentation is of a general nature only and
should not be used or treated as professional advice. This
presentation does not take into account your particular objectives,
situation or needs. As a result, it may not be appropriate to your
particular circumstances, and should not be relied upon. You
should rely on your own enquiries, together with professional
advice that takes into account your particular circumstances, in
making any decisions concerning your own interests.

18. Overview of Taxation System
 Tax is imposed by both the Federal and State
governments
 Standard financial year end is 30 June
 Australian resident company or branch?
 Australian resident Public Officer/Director
 Lodgement of annual Income Tax Return and
Financial Statements (consider audit
exemptions)

19. Taxation Requirements
Corporate Entities
Company tax rate of 30%
Employer taxes: Payroll tax, Superannuation,
WorkCover, Fringe benefits tax
Withholding taxes on payments to overseas entities
Payment What rate (UK/Australia)
Interest 10% gross amount of interest paid
Non-franked dividends 15% gross dividend paid
Royalties 5% gross royalty

20. Taxation Requirements
Individuals
Australian tax residents assessed on
worldwide ordinary income
Non residents assessed on Australian
sourced income – 183 day rule
Resident individual tax rates

21. Taxation Requirements
Taxable Income Tax on this income
0 - $18,200 Nil
$18,201 - $37,000 19c for each $1 over $18,200
$37,001 - $80,000 $3,572 plus 32.5c for each $1 over $37,000
$80,001 - $180,000 $17,547 plus 37c for each $1 over $80,000
$180,001 and over $54,547 plus 45c for each $1 over $180,000
The above rates do include the Medicare levy of 2% and the Temporary
Budget Repair Levy of 2% for taxable incomes over $180,000.

22. Other Tax Considerations
 Goods and Services Tax rate of 10%
(rebatable)
 Thin capitalisation
 Transfer pricing

23. DOING BUSINESS IN AUSTRALIA
WEST MIDLANDS WEBINAR
30 SEPTEMBER 2014
Stephen Dobbs, Partner, +61 9225 5511, stephen.dobbs@hsf.com

24. INTRODUCTION
• Common law legal system – based on English law
• Multiple jurisdictions
– Federal (‘Commonwealth’)
– State / Territory – all have own statutes and courts
• Taxes are levied at the federal level (corporations tax, personal
income tax, capital gains tax)
• Stamp duty can be significant and is levied on a state by state basis –
generally imposed on a much broader range of transactions than in
the UK
• 10% GST (federal)
• Customs duty (federal) – depends on class of goods
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25. 25
BUSINESS STRUCTURES
• Essentially as per UK
– sole traders
– partnerships
– private companies
– public companies
– trusts
• Companies must have at least one director ordinarily resident in
Australia (three for public companies).

26. IS A LOCAL ENTITY REQUIRED?
• An overseas corporation is required to register in Australia if it ‘carries
on business in Australia’ - usually requires some form of regularity of
commercial transactions
• Key exceptions:
– maintaining a bank account
– effecting sales through an independent contractor (ie distributor)
– soliciting or procuring orders that become binding contracts only if
26
accepted outside Australia
• Registration requires appointment of a local agent, filing of financial
information etc
• Alternatively can establish Australian subsidiary

27. FOREIGN ACQUISITIONS OF AUSTRALIAN BUSINESSES
• Statutory foreign investment regime overlaid by published government
foreign investment policy
• Administered by Foreign Investment Review Board (FIRB)
• Generally foreign acquisitions of Australian businesses require
notification and approval if value above approx A$250 million
• Direct or indirect acquisitions of non-agricultural land generally require
approval regardless of value (some exceptions apply)
• ‘National interest’ test
• No exchange control restrictions
27

28. EMPLOYING STAFF IN AUSTRALIA
• Federal legislation – Fair Work Act
– minimum employee entitlements (re leave etc)
– industry /occupation based awards (collective bargaining)
– enterprise agreements between particular employer and its staff
• Statutory long service leave – state by state
• Mandatory superannuation contributions by employer – currently 9%
but scheduled to ultimately increase to 12%
• Wages generally high by international standards given high cost of
living
28

29. 29
TRADING
• Law of contract broadly as per English law. However considerable
statutory overlay
– Prohibition on ‘misleading or deceptive conduct in trade or
commerce’ – applies to all commercial dealings
– Additional consumer protection provisions – statutory guarantees of
fitness for purpose etc
– Protection for consumers against unfair trading terms and
unconscionable conduct
• Strict anti-trust laws and restrictions on third line forcing, boycotts,
price fixing etc (exclusive distribution arrangements generally fine)
• Privacy legislation protects personal information of customers

30. PRODUCT LIABILITY
• Strict liability for manufacturers of defective goods that cause injury,
loss or damage – regime based on 1985 EC product liability directive
• UN Convention on Contracts for the International Sale of Goods may
apply to certain international contracts for the sale of products (no
application to products for personal, family or household use)
30

31. The contents of this publication, current at the date of publication set out in this document, are for reference purposes only. They do not constitute legal advice and should not be
relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills, an Australian Partnership, are separate member firms of the
international legal practice known as Herbert Smith Freehills.
© Herbert Smith Freehills 2014
31
DISCLAIMER

33. Doing Business in
Australia

34. Unipart Rail Journey
• Invested time and effort in Specific desk
top research
• Number of key visits
• Opened Unipart Rail Office Nov 2007 –
AusRail trade show
• Sydney Location due to sister company
• Formed JV with UGL in 2011
• JV Successful with RailCorp Maintenance
Contract in 2011 worth $1.4B
• Unipart Rail growth into other states
• “Different” solutions
• Products
• Supply Chain Services
• Consultancy

35. Market Research & Intelligence
• Do as mush research as possible
• Best option “go and see”
• Understand your market
• Local competition
• Where you fit against local activity
• Understand “win” factors – Local content
• Location
• Tyranny of distance
• Communication
• Nationally / Internationally – Time zones
• Portability of the offering

36. Resourcing
Costs
•Local v Ex pat
Cost of living
Business costs – 457 Visa, travel, FBT
Do your research
Workforce Flexibility
•Distance from UK
•Visa process and rules
•Experience/Skill set
•Union strength
•Responsiveness
•Support for in-territory team

37. Rail Opportunities
•Major Infrastructure projects
 NWRL
 Melbourne Link
Train Build Projects
 QR NGR
 NSW Intercity
Light Rail
 State Capitals
•Innovation
•Partnerships

38. Next Steps
• Strategy agreed
• Understand opportunities and threats
• Understand “the onion”
• AusRail 2014 – meeting / Visit programme
• UKTI advice