Background

Australia has an enviable Western-style capitalist economy with a per capita GDP on par with the four dominant West European economies. Robust business and consumer confidence and high export prices for raw materials and agricultural products are fueling the economy. Australia's emphasis on reforms, low Inflation, and growing ties with China are other key factors behind the economy's strength. Drought and strong import demand pushed the trade deficit up in recent years, although the trade balance improved in 2006. Housing prices probably peaked in 2005, diminishing the prospect that interest rates would be raised to prevent a speculative bubble. Conservative Fiscal policies have kept Australia's budget in surplus since 2002.


Foreign Investment Assessment

The government of Australia officially welcomes foreign direct investment through sustainable industry growth as well as development.  It has actively sought to promote the competitive advatanges of Australia as an investment destination. While there are no direct federal tax incentives offered to foreign investors, state governments do offer incentive programs for multinationals to set up shop in their respective parts of the country. Australia offers an economic environment extremely hospitable to the foreign investor -- an English-speaking country  which is safe, politically stable and home to a skilled labor force. This arena is governed by the Federal Department of Treasury as well as the Foreign Investment Review Board.


Stock Market

The Australian Stock Exchange (ASX) was formed in 1987 from several smaller exchanges, each of which had a trading history of more than 100 years. Foreign investors are generally unrestricted, except in the case of Qantas Airways and a few others. With the exception of small companies (under A$5 million), acquisition of more than 15 percent of outstanding shares of a single company must be reported to and approved by the
Commonwealth Treasurer. Approval is also needed when the total foreign holding of a company exceeds 40 percent. The withholding tax on Dividends is either 15 percent or 30 percent depending on the tax treaty between the investor's country and Australia.

For more information on the Australian Stock Exchange, see the Australian Stock Exchange website at URL: http://www.asx.com.au/


Taxation

Corporate tax
The standard corporate tax rate is 30 percent.
Individual tax
Individual tax rates are progressive rates and are as high as  47 percent. 

Capital gains
Capital gains are generally typically  as income.
Indirect tax
A goods and services tax (GST) of 10 percent is  applied to most goods and services.


Industries

Mining, industrial and transportation equipment, food processing, chemicals, steel


Import Commodities

Machinery and transport equipment, computers and office machines, telecommunication equipment and parts; crude oil and petroleum products


Import Partners

US 16%, Japan 12.5%, China 11%, Germany 6.1%, UK 4.2%


Export Commodities

Coal, gold, meat, wool, alumina, iron ore, wheat, machinery and transport equipment
 

Export Partners

 Japan 18.1%, US 8.7%, China 8.4%, South Korea 7.4%, New Zealand 7.4%, UK 6.7%


Ports and Harbors 

Adelaide, Brisbane, Cairns, Darwin, Devonport (Tasmania), Fremantle, Geelong, Hobart (Tasmania), Launceston (Tasmania), Mackay, Melbourne, Sydney, Townsville


Telephone System 

General Assessment: excellent domestic and international service; Country Code: 61


Internet Users

 9.472 million


Labor Force

10.19 million; agriculture 5%, industry 22%, services 73%


Judicial System

Australia’s legal system is based on English common law. Property and contractual rights are enforced through the Australian court system. There have not been any investment disputes involving foreign companies in recent years.


Corruption Perception Ranking

As reported by Transparency International, from least to most corrupt (scale of 1 to 163) -- 9
 

Cultural Considerations

Generally conforms to North American and Western European standards of etiquette.
 

Country Website (s)

 www.gov.au