Hi Guys,

           A family friend of ours has a manufacturing business based in Shanghai and would like to open a trading company here in Australia as they receive a large amount of orders from Sydney and Melbourne.


I would like to know what requirements are there for a non citizen to start a trading company vs a aus citizen ( me) who could possibly start the trading company.


Obviously the financial aspects of it would be that using a Australian citizen will have more tax advantages vs a non citizen.

Replying To  [jackstar]:

Why don't you go into partnerships with him, and you  become the Australian address and contact person for the Trading company?

Quoting from [grigo]:

Replying To [jackstar]:

Why don't you go into partnerships with him, and you become the Australian address and contact person for the Trading company?

Hi Grigo, actually had mentioned that idea to him last night so will wait and see how that pans out in the next coming weeks.

 

Ya, but keep in mind that under a partnership, any one partner is liable to 100% of partnership liability ... so if the biz goes up the spout you, as Oz partner, must personally pay all the debts that your Shanghai partner might incur here.

The tax position of the current Shanghai biz is worsened by incorporating in Australia. Presently, your mate is liable pay to only Chinese tax on profit, so why make those profits subjet to much higher Aus tax?

Forget invoicing the goods to the Aus entity at a high cost to ensure you don't make profit here. That's called "transfer pricing" where our ATO will adjust the import cost to the same cost as other importers pay (in the circumstance where there is a relationship between the Chinese exporter and the Aus import entity). 

Proceed with caution mate. 

Quoting from [jackstar]:


Hi Guys,


           A family friend of ours has a manufacturing business based in Shanghai and would like to open a trading company here in Australia as they receive a large amount of orders from Sydney and Melbourne.



I would like to know what requirements are there for a non citizen to start a trading company vs a aus citizen ( me) who could possibly start the trading company.



Obviously the financial aspects of it would be that using a Australian citizen will have more tax advantages vs a non citizen.

Why not cooperation with him,this is  a good chance.

Quoting from [jackstar]:


Hi Guys,


           A family friend of ours has a manufacturing business based in Shanghai and would like to open a trading company here in Australia as they receive a large amount of orders from Sydney and Melbourne.



I would like to know what requirements are there for a non citizen to start a trading company vs a aus citizen ( me) who could possibly start the trading company.



Obviously the financial aspects of it would be that using a Australian citizen will have more tax advantages vs a non citizen.

Mate,

The disadvantages outweights the benifit that can be gained from such a scenario. The taxes and paperworks alone will drive you insane. Comment made by Aussie are very valid and should be noted.

Having said that, if your friend is contemplating on applying for residency in OZ it would certainly make the process easier to have investment in OZ. Having an office in OZ would help boost the company's profile as well.

The system in which they are currently operating under seems to be effective enough if their business are growing at a rate where they need to consider setting up an office in OZ. As the saying goes "if it aint broken don't fix it".

If the reason for your friend wanting to setup a company in OZ is to better service the clients and for PR reasons, then perhaps it would make more sense to put you on as a contractor or consultant role to lias with the client.

I order to provide more informative feedback and suggestion you will need to be more specific on the reasons why your friend wishes to setup a company in OZ. Then weight out the pros and cons.

An account would be a good person to discuss such matter with. You should also contact Austrade to obtain more information.

Hope this helps.

Cheers,

Remus

Should be think over it . That's very interesting !

think of about it
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