Open a business account in Australia

Legally speaking, do I need a business account in Australia?

In the Australian business landscape, the need for a separate business account boils down to your business structure. If you're a sole trader or freelancer, having a separate business account is not a legal requirement. However, many find it beneficial in terms of financial organisation.

If you're setting up shop as a partnership, a company, or a trust, then you’re legally required to open a separate business account. That's because Australia's tax laws view your business and personal finances as two separate entities.

Keeping your business transactions separate is like handing yourself an organisational lifesaver. Plus, if you find the right banking partner, you might even be able to cut down on transaction costs. So, while navigating through banking options might feel daunting, the payoff when it comes to ease and potential savings makes it all worth it.

What details do I need to open a business account in Australia?

When opening a business account in Australia, you'll need to have all of the required documents on hand to streamline the process. Here's a general list of details to keep in mind:

• Proof of ID: You'll need a valid passport or driver's licence to verify your identity. You’ll also need to provide ID details for all owners and partners with a stake in your business.

• Proof of address: Both your personal and business address might be required. You can provide utility bills, bank statements, or official letters addressed to you or your business to prove Australian residency.

• Business name: The registered name of your business. Make sure that it matches the one on your paperwork.

• Australian business number (ABN): This 11-digit number identifies your business to the government and community.

• Industry type: The sector your company operates in, such as retail, manufacturing, or tech.

Depending on the bank and your business type, you might also need:

• Certificate of Incorporation/Business Registration: This official document proves your business is legally recognised.

• ABN/ACN Registered Office Address: The formal address registered with the Australian Business Register.

• Licensing Details: Additional licensing details may be necessary for companies operating in financial services.

It’s always good to remember that exact documents may differ slightly among various banks and financial institutions, so you should always check with them for their specific requirements first to avoid any unnecessary complications.

Do I need to be an Australian passport holder to open an account?

Australia’s banking system has made it straightforward for foreigners to establish business accounts, meaning you don’t need to be an Australian passport holder.

While traditional banks will ask for proof of identity as part of their account opening process, this doesn't need to be an Australian passport.

As long as you can provide the necessary documents, you'll be eligible to open a bank account, allowing you to manage your business finances, regardless of your passport.

Do I need to be a resident of Australia to open an account?

The good news is that you don’t have to be an Aussie resident to open an account. However, starting and running a business will require a specific work visa. Go to Australia’s official government website for more details.

Does my business need to be based in Australia to open an account?

If you're a non-resident who wants to open a business bank account, your company must have a registered office address in Australia and hold an ABN/ACN registration number unless you're a sole trader.

This registered address becomes the face of your business, serving as your established place for business and receiving all official communication from the ASIC. Your registered business address must be a physical location within Australia and cannot be a PO box.

What protections are available for business account deposits in Australia?

In Australia, the Financial Claims Scheme (FCS) is a guarantee that applies to all authorised deposit-taking institutions (ADIs), including banks of all sizes, credit unions, and building societies.

What does this mean for you? Simply put, if an ADI were to fail, the FCS ensures you have swift access to your funds. The Australian Government guarantees deposits up to $250,000 per account holder, per ADI.

One thing to note is that the FCS limit of $250,000 applies to the combined total of an account holder's deposits under a single banking licence. So, if you have multiple accounts with the same institution or even with different banking businesses operating under the same licence, these are all added together and count towards the $250,000 FCS limit.

When choosing your banking provider, it's worth confirming if they're an authorised ADI and are covered by the FCS or use other forms of keeping deposits safe, such as safeguarding.

Business accounts in Australia: 3 high-street picks

National Australia Bank 

As Australia's largest business bank, NAB provides business accounts with easy access to funds, smooth financial management via the NAB app, and integrated accounting software. Their main business account options include:

• NAB Business Everyday Account ($0-10 monthly fee)

Commonwealth Bank

Commonwealth Bank offers a versatile business transaction account with different options to cater to diverse business needs. With the option to open online, it provides unlimited electronic transactions and a business visa debit card.

• Business Transaction Account (Online)

• Business Transaction Account (In branch)

A $3.00 fee applies for cheque transactions for both accounts, and you can opt-in for customised alerts to help you manage your finances effectively. Both accounts also offer a business visa debit card that can be linked to Apple Pay.

ANZ Bank

ANZ Bank offers a variety of business accounts, including: ANZ Business Essentials, ANZ Business Advantage, and ANZ Business Extra.

• ANZ Business Essentials

• ANZ Business Advantage

• ANZ Business Extra

Digital alternatives: Wise and Airwallex 

So far, we’ve focused on opening a business account with traditional, established banks.

However, there are also digital alternatives like Wise and Airwallex to consider. They can often be faster to open than traditional banks and cater to international businesses with operations in Australia.

These digital accounts make cross-border transactions more accessible, efficient, and cost-effective, making them appealing options for companies with international operations.

Let's take a closer look at some of their features and benefits.

Wise Business Account

• Get AUD account details (account number and BSB) and transact in AUD. Send and receive funds just like a local Australian business.

• Add funds to your account in 20 different currencies, including AUD, GBP, EUR, USD, and more.

• Receive money from people across the globe in different currencies. Simply open a balance in your receiving currency and share your account details.

• Enjoy all the benefits of the mid-market exchange rate when sending money to different countries.

Airwallex AUD Global Account

• Receive AUD account details for easy transactions in AUD with Airwallex

• Provide your Australian customers with an account and BSB number, allowing them to pay directly into your AUD global account.

• Open foreign currency accounts in 11 currencies, including AUD, USD, EUR, and GBP.

• No sign-up or monthly account fees.

• Make the most of free international transfers and card transactions. Plus, enjoy free employee cards for your first five cardholders. A small fee applies for additional cardholders.

• Convert currencies at a small fee of 0.5% or 1% above the interbank rate

Conclusion: consider digital alternatives

The path to opening a business account in Australia ultimately depends on you and your business needs. While traditional high-street banks can provide reliable services, digital alternatives like Wise or Airwallex offer compelling options that might be easier to open an account with.

Each provider will have their own set of entrance requirements, so conducting thorough research and speaking to them directly is crucial. Don't hesitate to ask questions or seek clarity - after all, you're entrusting them with your business's financial health.