How to Do Business in Australia
January 10, 2018
Doing business internationally is always easier somewhere familiar. The US has trade agreements with many countries, but not many are quite as lucrative and expansive as with Australia.
The continental nation is one of the richest in the world. It has one of the world’s largest mixed economies, and is the 2nd wealthiest nation in terms of wealth per adult, behind only the Swiss. Trade with the US has contributed largely to its growth.
In 2005, the US and Australia signed the Australia-United States Free Trade Agreement (AUFTA). The relationship between the two countries has developed majorly from this, skyrocketing their economies.
The US is currently the largest investor in Australia, accounting for a quarter of the continent’s entire investment stock.
The US is currently the largest investor in Australia, accounting for a quarter of the continent’s entire investment stock. Likewise, the US is Australia’s largest destination for foreign investment abroad by far.
The US is Australia’s second-largest two-way trading partner. The trade agreement even offers preferential treatment for certain US goods, slashing all applicable duties. All tariffs have been eliminated for goods imported from the US into Australia, and the majority of Australian imports into the US are tariff-free.
Oh, and Former Prime Minister Bob Hawke once held the Guinness World Record for beer sculling. He downed 2.5 pints in 11 seconds. Need we go on?
The economic heart of the Asia-Pacific region just so happens to be one of the world’s most beautiful places. Combined with its great weather, Australia seems a paradise for US small businesses looking to go international.
Introduction to Australia
To the surprise of some, Canberra is Australia’s capital. Though Sydney and Melbourne are much larger cities, Canberra was chosen as the nation’s capital in 1908 for its relatively cool weather, and inland geography. Public administration and service are at the center of the city’s economy, with nearly all governmental headquarters being housed there.
What You Probably Thought Was the Capital
While Canberra is Australia’s symbolic capital, Sydney is its economic and trading center. Often called the nation’s “harbor city,” Sydney is home to Australia’s largest economy. In fact, Sydney accounts for half of Australia’s economic growth
While Canberra is Australia’s symbolic capital, Sydney is its economic and trading center. Often called the nation’s “harbor city,” Sydney is home to Australia’s largest economy. In fact, Sydney accounts for half of Australia’s economic growth. Its main industries span many sectors, with half of the city’s population employed in manufacturing. But, its coastal locale and beautiful Opera house make Sydney a magnet for international shipping trade.
Of the top three cities in Australia, Melbourne comes in second on almost all fronts. But, maybe not for long. Melbourne’s population is only 200,000 less than Sydney, and its economic output is gradually rising. Though it only covers a sliver of Australia’s landmass, Melbourne contributes to a quarter of Australia’s economic output. It’s also home to Australia’s largest container and automotive port, making it a prime export and import location to the fast-growing Asia-Pacific region.
The official currency of Australia is the Australian Dollar (AUD). Its most popular AUD exchange rate is USD to AUD, with $1AUD equaling out to about $0.76USD.
Until fairly recently, the AUD-USD exchange was close to even, which promoted bilateral trade. But, some economic issues have reduced the value of the AUD, making the sale of US goods to Australia less frequent.
However, this is a favorable exchange for US small businesses. Goods are cheaper for US importers, as they buy the goods in AUD with USD, taking advantage of the exchange rate. Australian suppliers also benefit from the US’ increased purchasing power, as the market for Australian goods in the US increases.
Australia has no official languages. English is spoken in parliament and is considered the national language by many, but is not officially recognized. This makes sense, considering only 70% of Australians are English speaking, and a quarter of the population were not born there.
Though no other language is as widely spoken as English, the Australian government’s stance on languages helps to promote diversity and acceptance of immigrants. The next most-used languages are Mandarin, Arabic, and Cantonese. When visiting, be sure that your business partner prefers to speak English. If not, a translator or interpreter may be necessary. All street signs will be in English, though.
Holidays and Traditions
The Australian holiday system is very confusing. Only a few holidays are recognized across the country, while most are specific to states and regions like Tasmania, Victoria, and others. Some holidays held in one month in a certain state, may be in a different month in another. In this guide, we’re going to list the holidays that are recognized across the country.
|New Year||January 1||Nationwide|
|Australia Day||January 26||Nationwide|
|Good Friday||Friday before Easter Sunday||Nationwide|
|Easter Monday||Monday after Easter Sunday||Nationwide|
|ANZAC Day||April 25||Nationwide|
|Christmas Day||December 25||Nationwide|
|Boxing/Proclamation Day||December 26||Nationwide|
Communication From the US
To contact your Australian business partners by phone, you’ll need to enter the phone code. To do so, simply add +61 to the beginning of the phone number before the area code.
Seeing as Australia is half a world away, it’s perfectly acceptable to arrange a meeting in advance over the phone or email. In fact, it’s Australian business custom to arrange a business meeting as far in advance as possible to ensure punctuality for everyone attending.
Finding a Supplier
Even in a country as familiar as Australia, finding a reliable supplier can still be challenging. To curb any anxieties, the Australian government has created a directory to help both international and domestic businesses.
The Australian Suppliers Directory lists thousands of Aussie companies and their goods and services. International businesses can search keywords, specific companies, regions, and even comb through a list of industries to narrow it down.
If searching isn’t working, the website even lists industry-specific directory resources to help businesses find exactly what they’re looking for. Is this place great or what? These resources are great for anyone in and outside of Australia looking for a supplier. But, what about importing your goods into the country, and becoming a supplier yourself? For more information on that, check out our guide on selling your goods in Australia.
Traveling to Australia
To travel to Australia, you need both a valid US passport and an official Australian visa. Which visa you’ll need will depend on your length of stay, but even if you’re staying for less than 90 days, you need at least one. Despite this, it’s reported that more than 62,000 people yearly overstay their visas. Nobody wants to leave.
More than likely, travelers will need a Visitor Visa. This visa allows you to enter Australia for tourism and business purposes, and lets you to stay for up to three months at a time. The application fee for this visa ranges from $140AUD ($105USD) to $1020AUD ($775USD), the more expensive one being for “frequent travelers.”
Australia does allow entrance with an eVisitor visa, which is free. You must apply for this visa from outside of Australia, and be a holder of a valid passport issued from that country. This visa will show up to Australian customs authorities when your passport is scanned, and allows you to stay for up to three-month intervals for twelve months total.
If you’re visiting for business purposes only, you’ll need to apply for an Electronic Travel Authority (ETA) visa. With this visa, you can visit Australia as many times as you want for up to a year, and can max out each visit at three months. The online application fee for this visa is $20AUD ($15USD).
Using a Cell Phone
Though some cell phone providers will work in Australia, it’s more likely that you’ll need to swap out your SIM card when you arrive on the continent. These can cost as little as $10AUD ($7.50USD).
If your phone supports a 4G connection, you’re likely to get a signal in any country, including Australia. As long as you buy a SIM at the airport or from one of the country’s three major service providers
If your phone supports a 4G connection, you’re likely to get a signal in any country, including Australia. As long as you buy a SIM at the airport or from one of the country’s three major service providers (Telstra, Optus, or Vodafone), you should be good.
Though it might work, don’t use your own SIM. You’ll likely be charged enormous roaming fees, and might not get great service.
If your cell phone is an older model, buying or renting a new one is another option. They’re called pre-paid phones, and come loaded with a specific plan that includes calling, texts, and data.
As central Australia is covered by desert, the major coastal cities are the areas where public wifi will be available.
When traveling into a major city like Sydney, Melbourne, Brisbane, or Perth, you should have no trouble finding a signal. Transit systems offer public wifi, as do coffee shops, airports, and other businesses that want to draw in customers.
You may be out of luck when traveling between cities, though. You shouldn’t go wandering into the outback if you’re looking for a signal.
|The Drinks Industry Show||Sydney||Winter||Wine, Beer, and Spirits|
|Reed Gift Fairs||Melbourne||Winter and Summer||Arts and Crafts|
|Fine Food Queensland||Brisbane||Spring Every Two Years||Food and Beverage|
|Australasian Oil and Gas Expo (AOAG)||Perth||Winter||Power and Energy|
|Agha Gift Fair||Sydney||Winter||Apparel and Clothing|
|Life Instyle Sydney||Sydney||Winter and Summer||Furnishings and Decor|
Though Australia offers great programs for small businesses to operate in the country, attending or participating in a trade show can be a great place to meet and engage with potential partners.
If you really want to make a good impression, these few tips will ensure success at an Australian trade show.
- Relax: Let your hair down. Don’t be too formal. Australians are known for their laid-back disposition, and this extends into business. If you come off as stressed out or aggressive, you’re sure to turn off potential partners.
- Get to the Point: Stay calm, but don’t mess around. Business is business for Australians, and they don’t like flashiness. Say what you need to, and don’t be too flashy. Australians are open to new ideas, but don’t want anything extra.
- Make Eye Contact: It might seem uncomfortable at first, but make strong eye contact with Australian business people. Whether you’re attending or participating in a trade show, keeping eye contact when speaking or listening is a sign of attentiveness. Don’t worry, you can still blink (we think).
Australian and US business culture is very similar. International small businesses should have an easy time transitioning, as Australians are known for their kind and welcoming nature.
But, if you want to make a lasting impression, following these specific cultural guidelines can help you along.
The number one rule, though: don’t use Australian slang. You’re not Crocodile Dundee, and you’re definitely not Steve Irwin. Australians complain all the time about tourists saying “g’day” and “crikey.” If it feels culturally insensitive, it probably is.
Kick Your Feet Up
Not literally. Australian business people are known for their laid-back and friendly style. Business is conducted on a first name basis, and Australians will crack jokes often, sometimes at your expense. Don’t take it too personally. Self-deprecating humor is used to lighten the mood and establish a surface relationship.
Business is conducted on a first name basis, and Australians will crack jokes often, sometimes at your expense. Don’t take it too personally. Self-deprecating humor is used to lighten the mood and establish a surface relationship.
Make sure that your Australian business partners feel as comfortable as possible. Everything needs to be (or at least seem) under control to keep the mood going. Don’t panic.
Depending on how relaxed the setting gets, Australian business people can even slip swear words into conversation, which some might see as an invitation. It isn’t. Though it seems relaxed, business is still business.
Relaxing doesn’t mean slacking off. Australian business people have strict agendas and don’t like to be toyed with or dazzled. Business is common-sense and fact-oriented. Appeal to those sensitivities. If a deal makes sense and you can show the work, you’re likely to make a good impression.
Be direct about your intentions as well. Don’t just say something to make your Australian business partner happy. If you can’t demonstrate it, don’t bring it up. Speak plainly and expect your partners to do the same.
Australians will openly disagree with you, and have no qualms about doing so. This shouldn’t be taken as offensive, but as a clear-cut way for negotiations to move along. Keep it professional, and reciprocate your partner’s’ behavior as much as you can without being rude.
Hierarchies won’t be obvious in an Australian business meeting. Everyone’s entitled to an opinion that will be taken into account. US SMBs may be confused by the marginal power differences in Australian business, but you shouldn’t take it for granted.
Hierarchies are still definitive in Australia, but you might find that nobody’s giving orders or seems to be the central decision-maker. This is because Australians don’t like to power-trip, or go over the heads of lower-level employees. Mutual respect is key, and collaboration is vital to business discussions.
Though direct in their intentions, this collaborative and inclusive environment extends into negotiations. Australians are generally more reserved when giving directions or asking for things. If your business partner says something like “Perhaps we could…” or “Could we try…”, you should try to do it.
Australian business communication is direct. Your partners will not be afraid to make their opinion known, or to openly disagree with you. Regardless of rank or seniority level, Australians value boldness and getting to the point, and communicating this way gets the job done.
Australians aren’t opposed to building long-term relationships with business partners. However, Australians don’t want personal issues or rapports to affect business operations. If someone likes or dislikes you, that should have nothing to do with whether a deal is a good one
There’s no personal or small talk before or during business meetings. This keeps meetings focused and targeted, and doesn’t allow for humor or deprecation to be taken to heart. Make sure you stick to the essentials. Your experience, credentials, and how long you’ve been at your company are crucial. It’s not entirely necessary, but business cards can help streamline this introduction process, and may be exchanged at the beginning of a meeting. Come prepared to do so.
Despite business not being too personal, Australians aren’t opposed to building long-term relationships with business partners. However, Australians don’t want personal issues or rapports to affect business operations. If someone likes or dislikes you, that should have nothing to do with whether a deal is a good one. Keep the pleasantries to yourself until after the meeting, and don’t use it as leverage.
But, other than that, Australian and US business people are very much alike in communication styles. English is widely used, and these few tips will make your meeting go even more smoothly.
Business Etiquette: Do’s and Don’ts
There are a few niche things about Australian business that are good to know for a meeting. We’ve made a quick do’s and don’ts list to help you navigate the specifics.
- Consider a Gift: Business gift-giving is rare in Australia, but the gesture will be appreciated. When your gift is accepted, it will be opened then and there, so avoid anything controversial. If receiving a gift, follow this lead.
- Move On, Don’t Dwell: Australians don’t get too hung up on the past. Errors and mistakes aren’t quickly forgotten, but lingering on an issue doesn’t help anyone. If you or your partner messes up, it’s best to forget about it.
- Follow the Agenda: Australians stick to the plan in business meetings. Agendas are set out beforehand, and it’s likely that the meeting or negotiation will hit all points. Small talk shouldn’t delay the plan, and everything should happen in its desired order.
- Be Modest: There’s no boasting about success in Australian business. Your partners may even downplay their triumphs and self-deprecate to level the playing field. Don’t agree with their self-criticisms, but don’t be afraid to look inwardly and do the same.
- Don’t be Late: To keep with the agenda and to show genuine interest, you have to be on time to meetings. It’s better to arrive a few minutes early, and your Australian business partners will probably do so as well.
Negotiating a business deal in Australia is fairly similar to US methods. But, some tactics that are useful in the US won’t work in Australia, and may even bring a promising deal to an unexpected end. We’ve got a few rules for success in Australian negotiations.
Fast and Smooth
Usually, the initial proposal made by Australian businesses is the best one they will offer. This speeds up the process.
Australians don’t mess around. Business is business, and it should move as smoothly as possible. To ensure this, Australian business people will often present an honest and firm position. The hope is that both parties are happy with the offer, and negotiations can continue from there or end altogether. Usually, the initial proposal made by Australian businesses is the best one they will offer. This speeds up the process.
This is connected to the first point. It’s crucial that you retain the relaxed atmosphere of Australian negotiations. Among other things, this means that prices and parameters are generally final. Haggling tactics will generally deter Australians from doing business with you. If the deal is close to what you were hoping for, avoid doing anything that could come off as confrontational or mal-intentioned. At the very least, negotiation tactics shouldn’t have the potential to offend.
Don’t Be Pushy
Sensing a pattern? Avoiding any pressure tactics or anything to push the negotiation along is recommended. Australian business processes are optimized for speed, as we said before, and they go to great lengths to give their partners the best possible deal. To push that even further is considered insulting, and disrupts the relaxed atmosphere that the smooth negotiating process tries to create. International businesses should go with the flow. Let the meeting take its course. You’ll be out of there sooner than in most other places, and probably with a great deal.
Though the meeting may be fast, the negotiation may take a while. Decisions aren’t generally made at the table, and Australian businesses prefer to take everyone’s opinion into account. From lower-level employees to middle management and executives, no idea is overlooked. International businesses need to respect the process, and allow the negotiation to take its course. Genuine empathy for Australian processes will make negotiations faster, and will help to establish a long-term relationship with your potential business partners.
Regulations and Permits
Australia’s trade requirements and processes are regulated and imposed by the federal government. The US-Australian Free Trade Agreement (AUFTA) has eased the flow of trade between the two countries since it was implemented in 2005.
All US imports into Australia are free of fees and duties, and Australian imports into the US are almost all free from charges. The agreement is constantly being reshaped, however, and the US government expects all Australian goods to be free of fees by 2022.
For now, though, the US government has made a “What’s My Tariff” tool to help US businesses navigate the fine print of the AUFTA. Also, there is a process that importers and exporters must go through to get preferential tariff treatment as per AUFTA regulations. The goods must have originated from either country, and must be proven as such. A Certificate of Origin is required for the process to go through.
Other than that, AUFTA has largely slashed any barriers or duties that would hinder bilateral trade between the US and Australia. Luckily for small businesses, this place just keeps getting better.
Even in a place as seemingly perfect as Australia, there are some challenges and issues with doing business there. If you’re okay with some of the world’s most venomous animals being around you at all times and don’t mind kangaroos, you should be fine when visiting. But, even if doing business remotely, the continent can be tricky.
Generally, the biggest challenge facing those looking to do business in Australia is its location. Especially relative to the US, the continent is fairly remote. This poses issues for US small businesses in terms of shipping goods to Australia. Prices for sending goods that far can get pretty steep.
More than that, Australia’s proximity to other big players in global trade can make it hard to find an in. Australia has easy access to low-cost markets in the Asia-Pacific region, so US businesses can have difficulty competing. International businesses need to be aware of long-time supplier relationships of their Australian counterparts, and look for ways to outdo the competition.
If you look up Australia’s economy, you’ll probably find people boasting of its prowess. For 25 years, Australia hasn’t experienced an economic recession.
International businesses need to keep in mind the potential dangers of a faltering Australian economy, and what investing in such an environment can do to their bottom line.
However, recent issues may challenge this, and some economists see a downturn on the horizon. What goes up must come down, and the fall of the AUD to $0.75USD may be the first sign of a brief fall of the Australian economy.
You’ll definitely find doomsday scenarios about Australia’s economy, which more than likely aren’t true. But, the extent of concern regarding the future of Australia is at least cause for attention. International businesses need to keep in mind the potential dangers of a faltering Australian economy, and what investing in such an environment can do to their bottom line.
The exchange rate between AUD and USD is favorable for US businesses on both sides (importing and exporting). Paying for goods and services should be a breeze, then. But, sending money to Australia can be a problem, which is why ecommerce dominates in the continent.
A recent report puts Australia in the top 10 ecommerce countries in the world. Most of the credit goes to the expansion of the Asia-Pacific region of the past few years, but Australia has taken online payments methods in stride. The country’s high internet usage and increase in online shoppers has truly spurred the ecommerce revolution.
However, paying suppliers and getting paid from Australia can be a challenge, as wire transfers can cost a ton of money, and can sometimes take days or even weeks to arrive. That’s where Veem comes in.
Veem is a global payments service that gives users access to a connected network of suppliers across the globe. Operating in 60 countries, Veem allows you to send payments overseas at a favorable rate of exchange, and for half of what your bank charges.
It’s easy too. After the initial sign up verification to keep you and your partners safe, payments are made just by sending an email. We verify your intended recipient for you, and allow you to track the payment through our dashboard. What’s not to love?
Begin the application process today, and start your international business ventures off right.