G’day mate! If you’re an Aussie business owner looking to expand your operations to the USA, it’s important to understand the compliance, legal, and beneficial ownership reporting requirements that come with operating in a foreign country. From navigating different tax laws to ensuring your business is in line with local regulations, there’s a lot to consider when crossing international borders. In this blog, we’ll break down everything you need to know about staying compliant and reporting ownership details while running your business in the land of the free. So grab a cuppa and let’s dive in!

Registration Requirements

The United States consists of 50 states and 5 territories, each with its own set of business regulations. To operate legally, businesses must adhere to both state-specific rules and federal laws.

State-Level Registration:

When establishing a business presence in the United States, businesses from Australia must complete state-level registration in any state where significant business activities occur. This requirement typically applies if your company:

• Has a physical presence in the state
• Frequently meets with clients in the state
• Derives a significant portion of revenue from the state
• Has employees working in the state

Incorporating your Australian Company in the US

Even if none of the specific criteria apply, a Australian company must still choose a home state for registration when conducting business in the US. This involves forming a U.S. entity, such as a corporation, LLC, or other business structure, in that state. This registration ensures that the company is officially recognized and compliant with US regulations, regardless of its level of business activity in any individual state.

The newly formed U.S. entity will operate as a subsidiary of the foreign company. This means that while the U.S. entity is legally independent, it remains under the ownership and control of the parent company based in Australia. This structure allows the company to conduct business in the US while maintaining its international headquarters.

We recommend using Northwest Registered Agent if your foreign company needs to incorporate. They offer expert guidance and can serve as a reliable registered agent for your business, ensuring compliance and smooth operations.

Federal Requirements

In addition to state requirements, Australian companies must also comply with federal regulations:

• Federal Tax ID: Obtain an Employer Identification Number (EIN) from the IRS. This number is essential for tax reporting and opening U.S. bank accounts.
• Industry Regulations: Companies may need to follow specific federal regulations depending on the industry. For example:
• Import/Export Laws: If the company is involved in importing or exporting goods, it must meet U.S. customs regulations. This includes adhering to rules for tariffs, duties, and necessary documentation.

Beneficial Ownership Information Reporting Requirements

For Australian businesses conducting operations in the U.S., adhering to Beneficial Ownership Information Reporting (BOIR) requirements is crucial. The Corporate Transparency Act mandates that companies disclose the individuals who own or control them. This applies to most entities, including those that are incorporated or registered in any U.S. state. The goal is to enhance transparency and combat illicit activities such as money laundering and terrorism financing.

A beneficial owner is an individual who controls the company or owns 25% or more of its shares, either directly or indirectly. For compliance with BOIR requirements, businesses must report information about these individuals, including their names, addresses, and identification details. Failure to file this report can result in significant penalties and legal consequences. Therefore, companies from Australia need to ensure they meet these reporting obligations promptly and accurately.

For your convenience, you can file your Beneficial Ownership Information Report directly on our website. Click here to complete the process in just a few minutes and ensure your business complies with U.S. regulations.

Additional Considerations for Australian Businesses:

Tax Treaties

As an Australian business operating in the USA, you can benefit significantly from the tax treaty between the two countries. This agreement helps prevent double taxation and provides clarity on tax obligations for cross-border business activities. The treaty offers reduced withholding tax rates on certain types of income, such as dividends, interest, and royalties, potentially lowering your overall tax burden. For more detailed information about the specific provisions and how they may apply to your business, click here to access the official IRS documents related to the Australia-USA tax treaty.

Trade Considerations

When conducting business with the USA, Australian companies should be aware of the Australia-United States Free Trade Agreement (AUSFTA). This comprehensive agreement eliminates most tariffs on goods traded between the two countries and provides preferential access to various sectors. However, it’s crucial to understand that certain industries may still have specific regulations or restrictions. Businesses should thoroughly research their particular sector to ensure compliance with both Australian and US regulations. This may include obtaining necessary licenses, certifications, or permits, adhering to labeling requirements, and meeting product safety standards. Additionally, companies should stay informed about any changes in trade policies or agreements that may affect their operations. Consulting with trade experts or legal professionals specializing in international business can help navigate the complexities of cross-border trade and ensure smooth transactions between Australia and the USA.

Your Path to Compliance: Key Takeaways for Australian Businesses in the U.S.

Operating a Australian business within the USA requires careful attention to legal obligations, from establishing your home state to incorporating and filing a beneficial ownership report. Meeting these requirements is essential for ensuring compliance and securing your business’s success in the American market. By understanding and adhering to these steps, you can confidently navigate the complexities of doing business in the U.S. and focus on growing your enterprise.

Ready to get started? Click here to file your BOIR in just a few short minutes. We make the process easy, fast, and secure so you can focus on what matters—your business.