If you run a small to medium-sized business in Australia you’ll know that being your own boss can be an incredibly rewarding albeit challenging experience at...
If you’re considering setting up a business in Australia, you’re not alone. The number of Australian businesses has been rising slowly but steadily for the past few years, to the point that there were more than 2.5 million active in June 2022.
And if you’re not a native to Australia, you’ll be pleased to learn that you’ll have plenty of opportunities all the same. A remarkable one-third of small businesses in Australia are run by migrants, according to a report by the insurance company CGU.
Those small businesses, of course, take all shapes and forms – but one point is common to the lot of them. If you’re setting up a business, you’ll need a business bank account. It’s obligatory for most types of business, and strongly recommended in any case. This article will give you some tips on how to choose the right one.
|💸 Looking for a stress-free international business account to pay abroad like a local? With multiple cards, AUD and foreign currency account details?
As in most countries, businesses in Australia can take various different forms. Here are the most common structures:¹
A sole trader is an individual, responsible for the whole thing. It’s most common to think of sole traders as individual freelancers, although sole traders can also employ people.
This is somewhere between a sole trader and a company: various people (or entities) can associate together in a partnership without forming a company.
A company is a standalone legal entity with a more complex business structure. Companies have limited liability: your personal assets aren’t considered part of the company unless you invest them in it.
Trusts are not commercial operations, but rather operate for the benefit of others. Charities often fall into this category.
The type of business you operate will affect the process of opening an account.
|Read more: Best Business Bank Accounts in Australia
Not really, no: your business will need to have a presence in Australia with all the appropriate registration. Of course, the company could be a subsidiary of a foreign company.
Also of course, your Australian company can do business with foreign entities. Which may mean a lot of international money flowing into and out of your corporate bank account.
That’s a good thing in essence, because it opens up many exciting opportunities. But one potential downside is losing money via poor deals on international transfers. Especially if you make a transfer using your bank, you can end up paying substantial fees as well as losing out thanks to bad exchange rates. The same process in reverse might mean you receive less money from international clients, too.
And that’s why Wise can help. In addition to your business bank account, Wise for Business can give you an international Multi-currency account, for no monthly fee, that allows you to receive money directly in Australian, New Zealand and US dollars, euros and British pounds: for the business paying you, it’ll be just like a domestic payment. You can also hold money in 40+ currencies, and send money out widely as well. All conversions are done at the mid-market rate, and fees are low and shown upfront.
Take a look now – it could save you and your business a lot.
The opening process varies from bank to bank, and you’ll need different details depending on what sort of business you’ve set up. But these two stages should be common in all cases.
- Before you set up the account, register your business and make sure you have all the appropriate numbers, such as an ABN or ACN.
- Select your bank and account type – a few of your options are listed below – and fill in all the necessary forms.
It’ll depend on the bank in question: they all have their own systems. Bear in mind that they may need to check your details, review your application and so on – it’s not as simple as opening a personal bank account. So you’d be wise to allow plenty of time. For most Australian banks, a specialist will accompany/guide you through this process and keep you updated.
Again, it’s the bank that determines exactly what documents you have to show, but there are a few requirements that are legally necessary.
Expect the following:² ³
- You’ll have to be the owner or one of the directors
- You’ll need to provide your ABN or ACN (sole traders may not need this)
- You’ll need to provide contact details for all directors – typically address and/or email and mobile number
- You may need to provide personal ID documents too. If you’re already a customer of the bank in a personal capacity, you might be able to skip this step.
In some cases, absolutely. Bear in mind that it’s a somewhat complex process, though: the bank will likely need to check your details and contact a few people, so it probably won’t be the instantaneous online experience we’ve come to expect.
Also, banks do have varying rules about this. In some cases you might need to take documents into a branch in person. Another reason to leave yourself plenty of time to get it all sorted.
Again, it depends: if you meet all the criteria, there’s no reason you can’t begin the process online – or maybe even via phone – while you’re abroad. But the business itself will need to be active in Australia, even if you yourself currently aren’t.
For some banks, you may be able to get a business bank account even if you’re not an Australian resident. But it will make the process more complex, and – as explained above – your business will need to be registered properly in Australia. You can’t just randomly choose to have a business bank account in Australia if you’re living and working in, say, France.
NAB, for instance, won’t let people who aren’t permanent Australian residents open a business bank account online.² There’s still the option of going into a branch, though.
Australia has plenty of choice when it comes to banks: the traditional “Big 4” are all options, and there are plenty more besides. Here is a look at some of the business bank accounts offered by the biggest 4 banks in Australia. Take a look and see if any of them look right for you and your business.
Commbank, or Commonwealth Bank to give it its full name, has one of the largest networks of bank branches in Australia, with more than 1,000 across the country. No surprise, then, that it has a solid offering when it comes to business accounts.
The Business Transaction Account comes with no monthly fee version if you mostly transact online. Each bank assisted transaction will cost you A$3 but you do get free electronic transactions, free cash withdrawals from Commbank ATMs in Australia, and the ability to use all the latest features like Google Pay, Apple Pay and Samsung Pay.⁴
If you need bank assisted transactions, cheques and quick deposits, you could open the same account with a A$10 monthly fee and get 20 such transactions included in the price.⁴ More info in the article linked below.
|Read more: Opening a CommBank business account. All you need to know.
The Australia and New Zealand banking group is also one of the country’s largest banks. It has 3 transaction accounts for businesses⁵:
- Business essentials account
- Business Advantage and
- Business Extra accounts.
The Business Essentials account is a no monthly fee pay per transaction type of account. An ANZ Business Advantage account will cost A$10 monthly while the Business Extra account costs $22 per month. You can see our full review in the article linked below.
|Read more: ANZ Business bank account. The Lowdown
NAB, which is another huge Australian bank and they also offer business everyday transaction account versions with A$0 fees and A$10 per month fees. bank account with no monthly fee.⁶ Depending on your transaction types, you might find it works out cheaper to take the alternative option and pay the A$10 monthly fee.
The account is called the NAB Business Everyday Account. The free version is for you if you mostly do online transactions. If you need to visit a bank branch and have cash or cheques to deposit regularly, you can opt for the paid account version and get 30 such transactions included in the A$10 monthly fee.
The final member of the “Big 4” is Westpac. Westpac offers these options for businesses:
- Business One – Flexi
- Business One – Low Plan
The Flexi option is a bit like NAB’s option with no monthly fee: Westpac describes it as “pay as you go”, meaning that instead of a monthly service fee you just pay for the staff-assisted transactions you make. Most electronic transactions are free.
Business One Low is 10, you get unlimited online transactions plus 25 other staff-assisted transactions on the house before you start having to pay.⁷
|Read more: Business banking with Westpac: The lowdown
Don’t imagine that the Big 4 is the complete list of possibilities. Other banks you might want to consider are Bankwest, BOQ, GreaterBank, Heritage Bank, St. George, and BankSA.
As you can see from all the options above, there’s no getting around most fees when it comes to business banking. Some of the accounts waive the standard monthly fee in some cases, but generally speaking that means paying on a per-transaction basis. If you run a shop or any other business which involves a lot of cash, that might not be an ideal solution, although for online-based operations it could work pretty well.
As you’d also expect, it’s possible to pay more for more premium services. The more expensive business accounts are generally targeted at larger operations, and give those companies the flexibility they require.
Whatever the monthly fees you end up paying for your business bank account, there’s another potential fee that you’d do well to read up on. International money transfers are a regular occurrence for many businesses, small or large, yet they can end up costing the earth.
That’s not just because of the fixed fees that banks often charge for them: it’s also because of exchange rate markup. Don’t forget to check what exchange rate the bank offers you: if it’s not the mid-market rate, you’re losing out, and less of your money will make it through the transfer.
The Wise Business account offers a hassle-free way to conduct local and international business transactions and more. You can also spend and hold over 40 local currencies with this account. It comes with the perks of a regular business account — mass payments, invoicing software integration, multiple debit cards for you and your team — to mention a few.
You’ll also be able to conduct business with no hidden charges, always get access to the mid-market rate — just like the ones you see on on Google — and be able to manage all aspects of your business completely online from one account and app.
To learn more about how much Wise could save your business, check out the Wise Business account. You can sign up online with a few clicks — in minutes.
- Australian Gov Australian business structures
- NAB business account requirements & Commbank requirements
- Commbank sole trader checklist
- Commbank business transaction account
- ANZ transaction business accounts
- NAB everyday transaction business accounts
- Westpac business accounts
Sources accurate as of 10 November 2022
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
Managing bookkeeping and juggling business banking is undoubtedly one of the primary challenges many small business owners face. Keeping on top of invoicing,...
Bank of Sydney, also known as BOS, is a local Australian retail bank with several branches around Sydney. BOS offers both personal and business financial...
Here’s what you need to know about foreign currency accounts with BOQ. The fees requirements and foreign exchange rates.
Looking to open a business bank account with Bank of Melbourne? We’ve got you covered. Here’s all you need to know.
ING Australia is a specialist in business deposits and commercial lending. That means you’ll be able to find business savings accounts. We will cover that here.