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Australia
Why Australia?
Officially known as commonwealth of Australia, the country comprises of the mainland of Australian continent, island of Tasmania, and numerous smaller islands. The country is called as ‘the Oldest Continent’, ‘the Last of Lands’, and ‘the Last Frontier’. Australia is world’s sixth largest country. Its economy has experienced continuous growth and features low unemployment, controlled inflation, low public debt, and a strong and stable financial system. Moreover, the Australian service sectors are the most significant part of its economy, accounting for about 70% of GDP and 75% of jobs.
Advantages
For many years Australia has been on the top of the most popular living destinations list. There are 25.1 million people living in Australia today. The promising quality of life, astonishing wildlife and the scale of metropolitan areas are impressive. Living in Australia means integrating into a society that is growing quickly. It also means lower population density, low pollution levels, and up-to-date infrastructure.Australia is known for its wide open spaces, sun kissed beaches, and a higher than average standard of living. Following are the top seven perks that Australia offers to the businesses:
An affluent market
As per OECD Better Life Index, Australia ranked fifth for average disposable income per household. This means that, in comparison to many other parts of the world, the people of Australia spends more money and creates great conditions for businesses.
A well regulated corporate and financial market
Australian Government’s major reform of the Corporations Act, while maintaining market integrity and investor protections, attracts foreign investors, reduces instances of fraud and any kind of corruption, thus helping businesses operate relatively smooth.
Access to Asian markets and time zones
Australian companies’ another perk is their proximity to Asian markets. Location within this time zone has led Australian entities to operate across the Asian countries such as; Singapore, Hong Kong, China, Malaysia, Thailand, and the Philippines. They also benefit from accessing labor in these jurisdictions , which makes outsourcing very common.
A culturally diverse consumer market
Having an extremely diversified culture, Australia is a country of immigrants and a diverse consumer market, which provides huge opportunities for businesses.
Well educated workforce
Australia offers one of the best educational systems in the world. In fact, as per World Economic Forum’s competitiveness Index, they rank within the top 10 out of 126 countries for higher education and training.The Australian education system is considered one of the best education systems in the world, for both domestic and international students. It enjoys high standards, a comprehensive curriculum, and highly qualified teachers.
Simple Tax Regime
Corporate tax
Australian resident companies are liable to Australian income tax on their worldwide income, whereas, non resident companies are liable to income tax on Australian sourced income only. However, where a company is resident in a country with which Australia has concluded a double taxation agreement, Australia’s right to tax business profits is generally limited to profits attributable to a permanent establishment (PE) in Australia.
All companies are subject to a federal tax rate of 30% on their taxable income, except for ‘small or medium business’ companies, which are subject to a reduced tax rate of 25% for the 2021/22 income year.
However, reduced tax rate applies only on those companies which falls below the aggregated turnover threshold of AUD 50 million.
Local income taxes
There are no state or municipal taxes on income in Australia.
Individual taxes
In Australia, a resident individual is liable to personal income tax on a worldwide basis, whereas, a non resident individual is liable to income tax only on income other than interest, royalties, and dividends, which are generally liable to withholding tax, which are derived from sources in Australia, and certain statutory income that is taxable on a basis other than source.
Tax rates
The following tax rate applies in Australia to 2021/22 financial years:
- Income from AUD 0 to 18,200 is liable to tax at a rate of 0%;
- Income from AUD 18,200 to 45,000 is liable to tax at a rate of 19%;
- Income from AUD 45,000 to 120,000 is liable to tax at a rate of 32.5%;
- Income from AUD 120,000 to 180,000 is liable to tax at a rate of 37%; and
- Income over AUD 180,000 is liable to tax at a rate of 45%.
Australian Companies
In Australia, the most common type of company is a proprietary company, which is signified by ‘Pty’ at the end of the company name. Moreover, the companies are classified on the basis of liability, size and where they are listed.
Proprietary companies
- Proprietary companies limited by shares – In company limited by shares, the liability of its members is limited to the nominal amount of their shares. This type of company has ‘Pty Ltd’ at the end of its name.
- Unlimited proprietary companies with a share capital – In an unlimited proprietary company with a share capital, the liability of its members is not limited. This type of company just use ‘Pty’ at the end of their name.
Public companies
- Public companies limited by shares – In this type of company, the liability of its members is limited to the nominal amount of their shares.
- Public companies limited by guarantee – In this type of company, the members can guarantee a fixed amount to be undertaken for contributing to the company when it is wound up. However, the companies have no share capital.
- Unlimited public companies with a share capital – Like its private counterpart, an unlimited public company with a share capital is a company where its members’ liability is not limited.
- No liability companies (mining and resource companies) – In Australia, a no liability company has share capital, however, this type can only be used where the principal activity of the company is of mining or resource exploration.
Sole trader
These type of companies are quite simple business format that fits to individuals who wish to trade legally on their own. A businessman is fully liable for all of its business’ actions, employees, losses, and debts.
Partnership
This form of a business entity fits for businesses that unite a small group of people, not more than 20, who work together and distribute the common revenues between themselves. However, a partnership agreement must specify how exactly a revenue or a loss must be distributed.
Trust
A trust is a business formation whose profit is given to the beneficiaries. The trust implies a trustee (either an individual or a company) who manages the trust’s assets, does business and distributes profits in the favour of beneficiaries according to the written document called the trust deed.
Related blogs
Its economy has experienced continuous growth and features low unemployment, controlled inflation, low public debt, and a strong and stable financial system. Moreover, the Australian service sectors are the most significant part of its economy, accounting for about 70% of GDP and 75% of jobs.
Author: Chandrawat & Partners
Topic: Doing Business in Australia
Download our comprehensive guide on – Doing Business in Australia
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HONDURAS
We have a team of seasoned professionals dedicated to supporting all your business needs - ensuring seamless operations and full regulatory compliance. This foundation empowers you to confidently establish and expand your business in Honduras with efficiency and confidence.
WHY HONDURAS?
Located at the crossroads of Central America, Honduras is an increasingly attractive destination for international investors. Its strategic access to both Pacific and Caribbean coastlines, coupled with membership in CAFTA-DR, offers advantageous export potential to the U.S. and beyond. With a GDP of approximately $32.1 billion and 4.2% annual growth in 2025, Honduras is bolstered by strong manufacturing, agriculture, and a budding renewables sector. The government has introduced free trade zones and renewable energy incentives that reduce bureaucracy and attract foreign participation. However, investors need to navigate administrative delays, security challenges, and a judicial system that can take up to three years to resolve commercial disputes.
ADVANTAGES
Honduras offers compelling benefits as a cost-effective, strategically located investment hub:
- Strategic Location & Trade Access
Dual-coast geography and CAFTA-DR membership grant preferential access to large export markets.
- Manufacturing & Export Strength
A key exporter of textiles—especially socks and apparel—benefits from modernized ports like Puerto Cortés for fast shipping.
- Attractive Investment Zones
Zona Libre de Importación (ZOLI) and ZEDEs offer full foreign ownership and tax exemptions—though ZEDEs face constitutional and legal uncertainty.
- Renewable Energy Incentives
Tax holidays and streamlined approvals under recent reforms (e.g., 2025 Energy Sector Act) promote solar, wind, and hydropower projects.
- Low Operational Costs
Competitive workforce and utility prices make Honduras preferred for manufacturing and agribusiness.
SIMPLE TAX REGIME
- Corporate Income Tax
Standard rate is 25%, with a minimum tax of 1% for high earners, and a 5% solidarity surcharge on incomes over HNL 1 million.
- Individual Income Tax
Progressive brackets at 15%, 20%, and 25%, with annual income thresholds and exemptions.
- VAT & Exemptions
Standard VAT of 15%, with a reduced 8% for tourism and exemptions on medicines, staple foods, and agricultural machinery.
- Withholding Taxes & Transfer Pricing
Dividends are subject to 10% withholding, royalties at 25%, and interest at 10%. Transfer pricing rules conform with OECD BEPS, along with mandatory country-by-country reporting starting 2025.
- ZOLI & ZEDE Incentives
Full income tax and duty exemptions. Note that ZEDEs like Próspera are now legally uncertain but existing zones remain under grandfathered terms.
HONDURAS COMPANIES
Modern and versatile legal entities facilitate foreign investment and structured operations.
- Sociedad Anónima (S.A.)
A stock corporation needing 2–5 shareholders, minimum capital of US $1,250, board of directors, and statutory auditor. Suitable for larger enterprises.
- Sociedad de Responsabilidad Limitada (S.R.L.)
Ideal for SMEs—requires 2–25 partners, capital as low as US $250–200, with limited liability protection.
- Branch Office
A foreign entity can form a branch by appointing a local resident agent, with capital set at US $1,300, and must maintain separate local accounting.
- Representative Office
For demonstration, liaison, and market research—cannot carry out commercial activity. A resident representative is required.
HOW TO FORM YOUR COMPANY
- Reserve your company name via the Mercantile Registry.
- Draft and notarize Articles of Incorporation (apostille needed for foreign entities).
- Register with SAT for RUC/RMT tax identification.
- Secure municipal operating licenses.
- Register with the Honduran Social Security Institute (IHSS).
- Open a corporate bank account (approx. 4-week timeframe).
Digital filing options have streamlined timelines by 30%, reducing set-up time to about 4–7 weeks for SRL/S.A.
Honduras offers a solid foundation for investment with its strategic location, competitive tax regimes, and flexible company structures. Nonetheless, investors should remain alert to security, corruption, and legal risks—especially around ZEDEs—and pursue comprehensive due diligence, backed by local counsel.
Contact Us
Get in touch with the right people to get the right help in setting up your business in Honduras.
enquiries@chandrawatpartners.com.