The Australian Government welcomes foreign investment in
recognition of the substantial contribution that it makes to
Australia's economic growth. The Government's policy is
to encourage direct foreign investment which is consistent with
the needs of the Australian community including:
the expansion of private investment
the development of internationally competitive and
the creation of employment opportunities.
Advantages of investing in Australia include:
strong economic credentials
democratic and political stability
highly skilled and multilingual workforce
dynamic financial services
sophisticated telecommunications and information
innovative culture with excellent R&D
cost competitive location
open and efficient regulatory environment
strategic time zone
welcoming attitude and excellent quality of life.
Investors may encounter commercial and legal differences
when establishing a business in Australia. Legal advice should
be sought at an early stage to fully maximise business
opportunities and minimise the risk of misunderstanding.
Australia is a democracy with a federal system of
government, which means that government is divided between the
Commonwealth and the governments of the States and Territories
(comprising New South Wales, Queensland, Victoria, South
Australia, Western Australia, Tasmania, the Northern Territory
and the Australian Capital Territory).
The Federal Government legislates on specific areas listed
in the Constitution which are of relevance to the nation as a
whole, such as trade and commerce, defence, foreign affairs,
taxation, banking, communications and customs. The State and
Territory Governments retain the right to legislate in the
remaining areas, such as education, health, transport and
In addition to the Federal and State Governments, there is a
third level of government, being the Local Governments for
cities and municipalities, which make regulations applying to
their particular local area.
A business established in Australia will therefore be bound
by Federal laws, the laws of the particular States or
Territories in which it operates and the regulations of Local
Australia is a common law country. Where the common law or
equity has not been overruled by statute it runs beside much of
Legislation and authorities
Legislation and statutory authorities that foreign companies
may be required to comply with include:
Corporations Act 2001
This Act is administered by the Australian Securities and
Investments Commission (ASIC), which is responsible for
regulating companies, the securities industry and the financial
The Australian Taxation Office is the statutory body
responsible for administering the federal taxation system.
The Reserve Bank of Australia is the central bank, which is
responsible for monetary policy and financial stability
(including issuing of currency).
Australian Prudential Regulation Authority
The Australian Prudential Regulation Authority (APRA) is the
prudential regulator of the Australian financial services
industry. APRA supervises all bank and non-bank financial
institutions to ensure that prudential standards and practices
are met to maintain a stable and competitive financial
Trade Practices Act 1974
This Act is administered by the Australian Competition and
Consumer Commission (ACCC), which regulates competition,
acquisitions, pricing and misuse of market power.
Foreign Acquisitions and Takeovers Act 1975
This Act is administered by the Foreign Investment Review
Board (FIRB), which is responsible for assessing direct
investment proposals submitted by foreign interests. FIRB also
makes recommendations to the Federal Government on foreign
investment proposals, and advises foreign investors on
IP Australia is the statutory authority responsible for
administering intellectual property legislation, including the
Patents Act 1990, the Trade Marks Act 1995,
the Designs Act 2003 and the Plant Breeders'
Rights Act 1994.
By Zmarak Zhouand.
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
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