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Routes to Market Australia

So you've decided to expand your business in Australia and researched your market. Now it's time to decide how you will register and set up the business. What is the best, most viable option for your company, your products, and yourself? Which is the path of least resistance?

Here are your typical options when expanding a business into Australia:

Companies

It is the most common form of business in the country. If a foreign company wishes to start up business in Australia it must apply for an Australian Business Number and register as registered foreign company with the Australian Securities and Investment Commission. All the relevant information is available at www.asic.gov.uk. A registered foreign company must also appoint a local agent who is a resident of Australia and is authorised to accept, on behalf of the foreign company, service of notices.

Partnerships

Partnerships are defined as associations between two or more parties conducting business in common with the objective of sharing profits and losses. Although a written partnership agreement is common practice, it is not required.

Joint ventures

Joint ventures, either incorporated or unincorporated, are common business vehicles in mining exploration and extraction, and in property development. The joint venture agreement defines each participants proportionate share in venture assets, liabilities and results. There are no special regulations governing the establishment of joint ventures. However, specific guidelines exist for new mining projects and for the acquisition of developed non-residential commercial real estate. For more information check:

Trusts

Trusts may be public or private. In the first case they are usually set for a specific purpose or charity, in the second for benefit of private individuals. They may be formed as either non-fixed (where all or some interests in the trust are at the discretion of the trustee such as discretionary trusts or hybrid trusts) or fixed trusts (where the interests in the trust are fixed such as unit trusts). Unit trusts are often used for public investments in the form of property trusts or cash management trusts.

Licensing

Licensing is the permission for someone else to use your intellectual property rights: either a patent, trademark, trade secret, or copyright. Different types of license include:

• Non-Exclusive License - A non-exclusive license implies that your intellectual property rights can be awarded to more than one licensee.
• Exclusive License - A little more complex because, although the license may not be exclusive to one licensee, it may be exclusive to a geographic location, a certain product, or limited area of use. For instance, you may grant a licensee exclusive use of the rights in France, yet grant another licensee its use in Germany.
• Patent License - The allowance of another party to use your patented product, design or process.
• Trademark License - Trademark licensing means permission is awarded to a licensee to sell a product or service. However, the licensor retains more control in order to ensure that quality is maintained. Quality control is in place to uphold the image of the brand / product / service / licensor, and therefore sustain customer confidence and satisfaction.

Franchising In Australia

Franchising is the licensing out of a business name, product, technique, philosophy, trademark, etc, for a percentage of the income. Instead of setting up new outlets as part of your expansion, you license your existing business blueprint out to franchisees who then set up and manage it for you.

The benefits of franchising your business in Australia include: more freedom, as the franchisee takes on major responsibilities; minimal expense; lower cost and higher profits; potential for fast growth; brand building.

Disadvantages of franchising a business in Australia: although few, rely predominantly on your franchisees. They include: poor quality franchisees; franchisees not declaring all income; poor performance.

In Australia today there is a franchise operating in almost every type of business category, with varying levels of complexity and cost. The sector is estimated to worth $130 billion. The Franchise Council of Australia Limited (FCA) is the peak body for the representing franchisees, franchisors and service providers to the sector (www. franchise.org.au). Have a look at it before expanding a business in Australia.

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