Starting a consulting business and getting paid from outside Austrlia

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Starting a consulting business and getting paid from outside Austrlia

Post by Oz_Sal on Thu Jul 04, 2013 4:25 pm

Hi Friends,

I have just landed a consulting gig with a company in Malaysia, where I produce some deliverables for them (location independent, but since I am in Sydney, I would be doing that from Australia)

Now, I need help in knowing what is the best way of setting this up so that my money can land with me in Aussie without too much hassle and manual interventions. This is a very large corporation with team of procurement policies, legal team and all that, so it has to be a solution which is workable for my client,
so I am not sure if they can pay me through paypal.

I am in Malaysia till next friday. Looking forward to all the great suggestions!

Sal

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Re: Starting a consulting business and getting paid from outside Austrlia

Post by Ericwt on Thu Jul 04, 2013 5:07 pm

A good paypal alternative for Australia and New Zealand....

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There may be other options, I will have to check.

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Re: Starting a consulting business and getting paid from outside Austrlia

Post by Oz_Sal on Thu Jul 04, 2013 5:12 pm

But is it something big corporations are ok paying through? Two questions here.

I mean, I have no problem accepting through Paypal either, but they mostly pay to bank accounts?
Also i like to know the structure/tax consequences I need to prepare in OZ..

Ericwt wrote:A good paypal alternative for Australia and New Zealand....

[You must be registered and logged in to see this link.]

There may be other options, I will have to check.

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Re: Starting a consulting business and getting paid from outside Austrlia

Post by Ericwt on Thu Jul 04, 2013 5:32 pm

Both companies I listed are Australian companies.

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Looks like it might be better suited.

As far as what the tax requirements are, I am not sure.

You can always ask your customer what services they use.

There is no shortage of payment services.



Oz_Sal wrote:But is it something big corporations are ok paying through? Two questions here.

I mean, I have no problem accepting through Paypal either, but they mostly pay to bank accounts?
Also i like to know the structure/tax consequences I need to prepare in OZ..

Ericwt wrote:A good paypal alternative for Australia and New Zealand....

[You must be registered and logged in to see this link.]

There may be other options, I will have to check.

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Re: Starting a consulting business and getting paid from outside Austrlia

Post by Rock Private Office on Thu Jul 04, 2013 7:53 pm

Hi Sal,
If you think this is more than a one-off, as in you plan to develop the business. You could consider an offshore IBC (in the Seychelles for example).

The company can open a bank account and receive payment by wire from your client. No tax due for payment by the company. You could draw the cash directly from your company account using a Visa debit card at cash machines in Oz. Alternatively wire money from your company account to a local Oz bank.

You would need to look at the tax implications in Oz to keep it above board.


Last edited by Rock Private Office on Fri Jul 05, 2013 5:09 am; edited 1 time in total
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Re: Starting a consulting business and getting paid from outside Austrlia

Post by Ericwt on Fri Jul 05, 2013 5:01 am

I am not sure what Australia's view is on offshore income.

I know if you work in Australia you pay taxes on wages.

But if the money is coming from outside Australia I am not sure if it is taxed or not.




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Re: Starting a consulting business and getting paid from outside Austrlia

Post by Rock Private Office on Fri Jul 05, 2013 5:13 am

Yeah fairly easy to find out. The money drawn could be treated as personal salary, expenses, loan repayment or dividends etc. A decent Oz accountant should be able to help.
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Re: Starting a consulting business and getting paid from outside Austrlia

Post by Oz_Sal on Fri Jul 05, 2013 5:36 am

Please recommend, if you know any OZ accountant..Thanks!

Rock Private Office wrote:Yeah fairly easy to find out. The money drawn could be treated as personal salary, expenses, loan repayment or dividends etc. A decent Oz accountant should be able to help.

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Re: Starting a consulting business and getting paid from outside Austrlia

Post by Rock Private Office on Fri Jul 05, 2013 6:48 am

Hi Sal,

I don't know any accountants there but I have a very close friend who is Chartered in the UK and worked in Australia for over 10 years, he should know. Failing that I know two financial planners there that can probably introduce someone. Bear with me while I ask around.

What is your status in Australia? Are you a citizen of another country also? PM me if you prefer. Can't really provide the answers without some detail.

Cheers,
Pete
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Re: Starting a consulting business and getting paid from outside Austrlia

Post by Rock Private Office on Fri Jul 05, 2013 8:51 am

Sal,

Your individual situation needs to be looked at carefully before you start to implement a solution. It will be money well spent at this stage.

This information about Australian residents with foreign company's was quickly trawled off the internet:



(Personal tax)
When you become a resident of Australia, unless you are a temporary resident, income earned overseas such as rental income from foreign properties and dividends paid by foreign companies will be taxable in Australia...


(Company tax)
The Australian tax implications will depend upon whether the offshore company is held by an Australian company, trust or directly by the individual owners.  Some concessions only apply where an Australian company owns more than 10% of the offshore company

An offshore company can be deemed to be an Australian resident if it carries on any business in Australia and has its effective control in Australia or is owned by Australian shareholders.  This should be monitored regularly.

Australia does not generally tax the trading profits of an overseas company.  However, there are the Controlled Foreign Company rules which can tax in Australia certain passive or related party income of a foreign company

Interest, royalties, management fees received from foreign company are taxable in Australia but with a tax credit for any foreign withholding taxes paid on that income

Dividends received by an Australian company from a foreign company will not generally be taxable in Australia

Gains on the sale of foreign companies by an Australian company may not be taxable in Australia.

Foreign taxes paid the foreign company or withholding taxes paid by the Australian parent company do not generate Australian franking credits

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