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If you’re a Japanese business hoping to expand to Australia, or you’re wanting to work with an Australian company from overseas, it’s important that you get some background information about Australia’s current commercial environment in 2025. Understanding the legal, tax and regulatory framework can help you hit the ground running.
Many foreign businesses choose to expand in Australia as it continues to offer a resilient and promising business climate. Overall, Japan and Australia enjoy a positive relationship bolstered by strong trade ties and ongoing economic cooperation. So, your business can perform well in Australia as long as you follow the key steps and maintain your compliance with local laws.
The following are some key considerations you should make before you start a Japanese business in Australia:
- Registering a foreign business in Australia
- Understanding which laws govern Australian businesses
- Visa requirements (for example, for foreign workers and business owners)
- How employment laws and remote work regulations function
- Tax obligations and registration for GST, PAYG and other duties
- Dispute resolution in an international business context
- Drafting internationally enforceable contracts and arbitration clauses
In this article, we’ll cover the general commercial environment in Australia as it stands in 2025, and what Japanese businesses need to consider before expanding into this dynamic market. For further insights, you might also want to read our guide on registering your business name and how to structure your operation by exploring our Sole Trader vs Company comparison.
Why Foreign Businesses Expand To Australia
Australia’s stable economy, skilled workforce and rules-based society make it an attractive destination for foreign businesses looking to expand their operations overseas. As of 2025, Australia continues to be ranked among the top 20 economies worldwide for ease of doing business, according to insights from the Australian Trade and Investment Commission. This strong performance is supported by sound infrastructure and effective regulatory reforms implemented over recent years.
As a result, Japanese businesses and investors frequently turn to Australia when planning their global expansion strategies. Additionally, initiatives such as the updated Free and Open Indo-Pacific (FOIP) continue to reinforce and support bilateral engagements between Japan and Australia.
What Does Australia’s Business Environment Look Like?
Australia and Japan enjoy a thriving diplomatic and commercial relationship, which further incentivises Japanese businesses to tap into Australian opportunities. According to the latest data from Austrade, Australia has maintained its solid international reputation by streamlining business processes and ensuring transparency. For instance, Australia now ranks among the top economies for facilitating international trade, making it a favoured destination for business expansion.
Commercially, strong ties have been cemented through free trade agreements such as the Japan-Australia Economic Partnership Agreement (JAEPA), which has been continuously updated to reflect current market needs. These agreements, along with other bilateral initiatives, make the economic environment even more attractive. For additional context on trade relationships, check out our piece on what regulations affect your corporation.
Moreover, Australia’s involvement in the ‘Quad’ partnership with Japan, India and the United States further strengthens the region’s economic integration, providing additional impetus for cross-border business ventures.
Where Did It All Start?
The relationship between Australia and Japan dates back to the post-World War II era. In the 1950s, a formal trade agreement was established, laying the foundation for the robust commercial ties that persist today. Over the decades, Japanese companies have steadily built a dominating presence in the Australian market.
Today, well-known names such as Fujitsu, Honda, Canon, Toshiba, Panasonic and Yamaha remain household names across Australia. This legacy of trust and success encourages new Japanese businesses to take the plunge, albeit with the right legal precautions in place.
If you’re considering bringing your Japanese business to Australia in 2025, expect pleasing results – provided you take the right legal steps and consult expert advice.
How To Set Up A Japanese Business
Setting up a foreign business in Australia means familiarising yourself with local business laws, regulations and processes. This ensures your operations remain compliant, and you avoid any disputes or unwanted fees. Our comprehensive resources, including our Business Registration Guide, are designed to help you navigate these complexities with ease.
So, what’s first?
Register Your Business In Australia
For starters, you will need to register a business name in Australia. To do this, find an available name by searching the online name registry.
Next, acquire an Australian Business Number (ABN), as this is essential for carrying on business in Australia. Recent updates in the online registration process have made securing an ABN quicker and more streamlined than ever.
Since you will also be receiving income in Australia, you’ll need to apply for a Tax File Number (TFN), which serves as a unique identifier for tax purposes. Note that if your employees are working in Australia, they must obtain their own TFNs as well.
It’s worth noting that the application for an ABN can still be completed without a TFN by providing additional documentation if required.
ABN Or ARBN?
A foreign company can have both an ABN and an ARBN. Traditionally, an Australian company registers with the Australian Securities and Investments Commission (ASIC) and obtains an Australian Company Number (ACN). However, the rules differ for foreign companies operating in Australia.
Foreign companies registering with ASIC are eligible to obtain an Australian Registered Business Number (ARBN) instead of an ACN. For full details on the ARBN process, visit the information available online.
The process requires lodging a Form 401 and providing additional documentation – if you’re unsure about the process, have a quick chat with our lawyers for expert guidance.
ASIC
ASIC remains one of the main regulatory bodies for businesses in Australia. Securing your business numbers represents the beginning of your ongoing relationship with this agency. Much of your annual reporting, processing of fees and submission of company updates will be managed through ASIC.
It’s particularly important to stay on top of ASIC obligations, as non-compliance can result in significant fines. For a refresher on director and shareholder responsibilities under the Corporations Act 2001, be sure to review our related content.
Setting Up A Local Subsidiary
Some Japanese businesses opt to partner with local Australian companies while maintaining their headquarters in Japan. However, if you want to run your business directly in Australia, you can set up a local subsidiary.
A subsidiary is a separate legal entity from the parent company, which can be fully owned by the Japanese business. After registering your business name and securing the relevant business numbers, you need to complete these additional steps:
- Registering for all the relevant taxes
- Opening a local bank account
- Obtaining an Australian address
- Appointing at least one director who normally resides in Australia
If your business does not already have a physical presence in Australia, you can satisfy the local presence requirement by engaging a resident director service provider. This arrangement allows you to appoint an Australian resident as a director—ensuring you meet regulatory requirements without relocating your headquarters.
Since directors have strict statutory duties under the Corporations Act 2001, it’s crucial to establish clear expectations through a Director’s Service Agreement. This not only outlines responsibilities but also helps monitor conduct and enforce compliance. For further details, check our discussion on breaches of director duties.
Japanese-Australian Partnership
The Japan-Australia Economic Partnership Agreement (JAEPA) came into force on 15 January 2015 and has been updated to reflect current trade practices. The agreement facilitates preferential trade treatment and supports mutual commercial interests. Hence, if your business activities involve regular engagement with Australian companies, JAEPA can significantly ease your market entry and operational costs.
If you’re a Japanese business eyeing expansion or collaboration with an Australian partner, our lawyers can provide tailored advice specific to your circumstances—chat with us today!
Getting An Office Space
Establishing a physical presence in Australia can enhance your business credibility and operational efficiency. Whether it’s an official business address, office or retail store, securing a local space is an important step, especially if you’re setting up a subsidiary.
This involves negotiating a Commercial Lease. Alternatively, many businesses now opt for flexible co-working spaces, which not only reduce overheads but also provide access to modern amenities. For more information, explore our guide on choosing the right workspace.
Do I Need A Visa?
In most cases, you will require a special visa to carry out business in Australia. For Japanese citizens, an Electronic Travel Authority (ETA) allows a stay of up to 90 days for business and tourism purposes. This visa is a great option for short visits to inspect the business environment, meet potential partners or explore office locations.
If you plan to stay longer than 90 days, consider applying for a Business Owner Visa (subclass 890) or other suitable long-stay visa options. It’s advisable to consult a legal professional specialising in business visas to guide you through the best option for your circumstances.
Foreign Investment Review Board
The Foreign Investment Review Board (FIRB) oversees proposals from foreign investors. In 2025, FIRB’s thresholds have been updated, making Japan one of the preferred sources of foreign direct investment in Australia. The strong trade relationship continues to open gateways to significant economic opportunities.
Understanding Business Laws In Australia
Australian business laws are principally governed by the Corporations Act 2001. This Act outlines the mandatory regulations for company operations, including meeting procedures, voting rights, and the drafting of essential documents like your Company Constitution and Shareholders Agreement. For a deeper dive, see our article on what the Corporations Act involves.
Additionally, Australia has stringent consumer protection laws enforced by the Australian Competition and Consumer Commission (ACCC) under the Competition and Consumer Act 2010. Adhering to these laws will keep your marketing transparent and your product or service claims truthful. Learn more about how to avoid misleading conduct.
Employment Laws
Hiring employees in Australia means you must comply with local employment laws, entitlements and work standards. This also includes adapting to modern workplace trends such as remote work—a consideration that has evolved significantly by 2025. For example, it is crucial to understand your obligations under updated Work Health and Safety regulations and ensure your policies also accommodate flexible working arrangements.
You also must adhere to the stipulations of the Fair Work Act 2009, including ensuring fair pay and favourable working conditions under the National Employment Standards. Industries may have specific awards determining leave and pay entitlements; if in doubt, our Award Compliance Package can help verify your obligations.
If you are retaining employees in Japan while employing contractors overseas, ensure you have robust overseas employment agreements in place. You can refer to our guide on engaging overseas contractors for tips on drafting these contracts.
| Example Work hours in Australia may be structured differently from those in Japan due to local business hours for banks, grocery stores and other essential services, ensuring employees have time for personal commitments. |
Taxes
In Australia, taxes such as the Goods and Services Tax (GST) and Pay As You Go (PAYG) withholding tax are critical components of your business obligations. GST is a national tax of 10% applied to most goods and services, and you are required to register for GST if your turnover exceeds $75,000. During the business registration process, you will be guided on which taxes to apply for.
PAYG requires employers to withhold income tax for their employees and remit these amounts directly to the ATO, so it’s crucial to implement robust payroll systems. We always recommend speaking with a financial professional to confirm your specific tax obligations, including any changes that may affect Fringe Benefits Tax or Payroll Tax in 2025.
Additionally, re-assessing your tax registration periodically helps ensure you remain compliant with any updates in tax legislation.
As we move further into 2025, digital transformation remains a driving force in Australia’s business landscape. Many companies are adopting advanced technologies to streamline compliance, enhance remote workforce management, and ensure robust cybersecurity. By leveraging these digital solutions, your Japanese business can stay ahead of regulatory changes and foster an agile, forward-thinking corporate culture. For more guidance on digital contractual agreements and cyber security policies, explore our resources on the legal side of ChatGPT and our Privacy Policy guidelines.
If A Dispute Arises, Which Country’s Laws Apply?
When disputes cross international boundaries, it is crucial to secure your agreements with internationally enforceable contracts. This ensures that both parties have clearly defined rights and obligations under an agreed governing law and jurisdiction.
If a dispute cannot be resolved through mediation or negotiation, legal action may be required. In such cases, having international arbitration clauses in your contracts provides a cost-effective and certain route for dispute resolution. Should you need help drafting an international arbitration clause, our legal experts are here to help.
Without an international arbitration clause, it’s critical to negotiate two key points early on with your contracting partner:
- Governing law
- Jurisdiction
This is something that you and the other party need to agree on from the start. It always helps to have an expert lawyer guide you through each stage of the negotiation—our team is ready to help.
Key Takeaways
Expanding your Japanese business into Australia in 2025 comes with a range of legal considerations, from registration to compliance and dispute resolution. However, the enduring strong relationship between Japan and Australia provides an excellent incentive to proceed.
To summarise what we’ve discussed in this article:
- The robust Australian market and enduring Japan-Australia relations present positive prospects for Japanese business expansion.
- Registering your business and understanding the relevant regulations, taxes, and legal forms is essential.
- You can start with a 90-day ETA visa and later apply for a longer stay visa if needed.
- Consider securing your operations with contracts, such as Employment Contracts, Commercial Lease Agreements and internationally enforceable agreements.
- Engage with an Australian lawyer to ensure you’re up to date with 2025 business and consumer laws.
If you would like a consultation on expanding your Japanese business to Australia, or if you want to know more about Japanese-Australian relationships, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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