How to Set Up a Business Bank Account in Australia

Opening a business bank account in Australia is a crucial step for companies wishing to establish themselves in the country’s thriving market. Australian banks typically offer a range of account options tailored to the needs of businesses, including transactional accounts, savings accounts and specialized business banking services. When choosing a bank for your business account, consider factors such as bank fees, transaction limits, online banking capabilities and additional services offered, such as business loans, trade services and foreign exchange solutions. Researching in depth and comparing different banking options can help you find the one that best suits your business needs and goals.

Expanding your business from Latin America to Australia has become very attractive. Australia is one of the most prosperous nations on the planet. It has a GDP of US$1.3 trillion and a GDP per capita of around US$55,926.

Moreover, the country is one of the world’s most connected nations. It has free trade agreements with the Americas, Asia, the Gulf, and Europe. Trade between Australia and Latin America is on the rise thanks to a series of developing bilateral trade arrangements and negotiations. This offers entrepreneurs opportunities for sustained local and international success when engaging in business in Australia.

However, doing business in Australia requires setting up a business bank account through a specific procedure. This article explores the options for entities and all other information you need to set up your Australian corporate bank account.

4 Steps to Open a Business Bank Account in Australia

To start your business in Australia, you’ll need to open a business bank account there. To do that you must follow these 4 steps: 

• Step 1 – Prior to your Bank Account you need to Register Your Business in Australia.
• Step 2 – Decide What Type of Bank Account You Need.
• Step 3 – Decide What Bank Your Business Will Use.
• Step 4 – Set Up Your Business Bank Account

Step 1: Prior to your Bank Account you need to Register Your Business in Australia

To open a business bank account in Australia, you must first register your business with Australian authorities and hold an ABN/ACN registration number. Therefore, any business wanting to open a corporate bank account will have to form an Australian company. Australian law recognizes the following business entity structures:

•   Sole trader
•   Company
•   Partnership
•   Trust.

Each business type is different and offers different benefits and tax requirements. It’s not compulsory to have a specific business account if you operate as a sole trader. However, it’s good practice to do so. If you have a company, partnership or trust, you must have a business bank account in order to operate.

Step 2: Decide What Type of Bank Account You Need

There are different types of business bank accounts offered, so before opening an account, you need to have decided what option suits you best. 

• Business Transaction Account (Checking): an account used for day-to-day operations, such as withdrawing cash and depositing cash payments from suppliers and clients. This account would also receive bank transfers and electronic payments from clients. A monthly fee may be charged, up to AU$20 or transactions chared pay-as-you-go. Accounts with fewer functions may waive the monthly fee. Additional fees for international payments vary from AU$10 to $30.
• Business Savings Account: this type of account can be used to earn interest on saved profits. Banks usually required notice before withdrawing funds from these types of accounts, so make sure there is sufficient money in your transaction account before you transfer money into your savings.
• Business Term Deposit: similar to a savings account but term deposits have expiry dates and fixed interest rates, to guarantee you a set return. You can only withdraw money before the term expires by paying a penalty fee. This could be in dollars terms or taken as a percentage from your return (e.g. 2% penalty from the 3.5% interest rate. The notice period is usually 31 days.

Step 3: Decide What Bank Your Business Will Use

Australia’s four biggest banks have good branch and ATM coverage across the country. This makes them a convenient choice for your business account. Each offers slightly different accounts with periodic promotions (like free banking for new customers for a limited period). The ‘Big Four’ are listed here:

•     National Australian Bank
•     Commonwealth Bank
•     ANZ Bank
•     Westpac

National Australian Bank

National Australian Bank (NAB) offers a fee-free business account. NAB allows free cash withdrawals from networked ATMs in Australia, as well as a host of other perks. It also offers specialized business accounts if you want an interest-bearing product. As one of the largest banks in Australia, you’ll have access to over 1,500 branches and 3,400 ATMs.

Commonwealth Bank

The Commonwealth Bank’s regular business bank account costs $10 a month to run. Moreover, it applies some additional transaction charges depending on usage. The Commonwealth Bank operates across the region, and the UK, and has over 1,100 branches worldwide. There are also over 4,300 networked ATMs.

Westpac

Westpac has a range of different business bank accounts. These run from low fee basic accounts to those designed for larger and more active businesses. It holds various offers and promotions attached to the accounts, including free banking for new customers. There are 1,429 branches and 3,850 ATMs in the Westpac network.

This bank also operates in New Zealand, which is helpful for further expansion considerations, and when/if travel to New Zealand is required for your work.

ANZ

ANZ Bank is Australia’s fourth largest bank and has two ‘everyday’ business bank accounts on offer. This includes a ‘low fee’ option. It also offers several more specialized banking products depending on your personal needs. The bank’s website has a comparison table with all the important facts about the accounts, including fees and charges. Like Westpac, this bank also operates in New Zealand which makes travel (if necessary) easy and convenient.

Step 4: Set Up Your Business Bank Account

Each bank has its own specific requirements to open a business bank account. However, in general, most procedures work somewhat the same. You can start the initial sign up process online by entering your details and your ACN. You will then need to go to the bank branch to provide your identity documents and complete the account formation process.

What Documents are Needed to Open a Corporate Bank Account in Australia?

Due to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, all account holders and signatories must be identified. The documentation differs for different business structures, however for a domestic private company, the following information is required from the company:

• Full company name, as registered with Australian and Securities Investments Commission (ASIC)
• Australian Company Number
• Australian Business Number 
• Company’s registered office
• Company’s place of business
• Full names of ALL company directors
• Date and state of registration or incorporation
• Full business name/trading name
• Australia regulator and company license
• Foreign tax residency information (if applicable)

The ASIC certificate of registration and a public document issued by the company, such as an annual audit, is also required.

Each signatory and the beneficial owner will also need to provide their own personal identity documents:

• One primary photographic identification document: Passport or driver’s licence (either Australian or foreign)
• or, One primary non-photographic identification document: birth certificate or citizenship certificate (either Australian or foreign) and one secondary identification document (listed in each banks identity checklists).

Tip: We recommend that, whenever possible, clients open accounts in both Australian dollars (AUD) and their home currency or other commonly used currency for their business transactions. This can facilitate international transactions and minimize foreign exchange fees

Note for US citizens

If anyone involved in the creation of the business is a US citizen, they’ll be required to provide a tax identification number. If the business is involved in financial services, additional licensing details may be required. It may be possible for a company to nominate one person to certify signatories to the account. This means that only one person has to provide the full range of documents. Afterwards, this person can then authorize other colleagues to access the account.

Do I Need Australian Nationality?

It’s not necessary to be a resident of Australia to open an account there. However, to open a business bank account, the company must be registered in Australia. The banks allow to apply online for a business bank account and present the documentation needed in branch later. This makes it feasible to at least start the process of opening an account before you arrive in Australia.

You can open your business account online while still abroad. However, this is only if a business is already registered in Australia. The Commonwealth Bank of Australia, for example, offers online verification for new customers. ID and company registration details can be checked online in real-time to speed the process up. However, this service isn’t available on all products.

Specialized Needs Call For Specialized Assistance

Setting up a business bank account in Australia does not have to be a difficult process. The country has a range of different banks with different account benefits along with special services for foreigners. However, to be able to fully benefit from all the special services, knowledge of corporate requirements is needed.

In order to set up your desired entity in Australia, a local partner might be of help. Biz Latin Hub is an expert in connecting businesses and supporting startups in the region.

Our recently-received award for Business Excellence by the Australian-Latin America Business Council demonstrates the support we receive from Australian institutions. Find out more about how we can transform the fortunes of your business. Contact us today for assistance tailored to your needs.