Setting up a Bank Account to do Business in Australia

Setting up a bank account in Australia

If you are doing business, you will be setting up a bank account. Fortunately, setting up an Australian bank account is relatively simple for both Australian residents and foreign investors.

Setting up an Australian bank account does require you to provide some identity information. Like most countries, Australia has relatively strict requirements that individuals seeking to open bank accounts must comply with. In order to meet Anti-Money Laundering and Counter-Terrorism Financing Act requirements, banks are obligated to capture identity information from applicants that want to open new accounts.

Aside from ID requirements, however, the process of opening a bank account in Australia isn’t complicated. Australian citizens and residents are subject to the same application requirements as tourists, international students, and foreign investors. Australian business bank accounts require more paperwork, but can still be created simply and easily.

We’ll proceed to break down the basic steps required to set up an Australian bank account for businesses and individuals.

Setting up a Bank Account as an Individual

Setting up a bank account as an individual in Australia can be done online, or in person at a bank branch location. Major Australian banks typically don’t charge a fee for opening an account, but those that do often waive account opening fees if applicants make a relatively small initial deposit.

In order to open an Australian bank account, applicants must provide a number of identity documents. Australian banks weight identity documents on a point basis — opening an account requires 100 points of identification.

    The identity documents that can be used to open an Australian bank account include:

  • Birth certificate, passport or citizenship certificate: 70 points
  • Documents with address information such as utility bills or bank statements: 25 points
  • Drivers’ licence, shooters’ licence, public service employee ID card or a Commonwealth or State Government financial entitlement card: 40 points
  • Cards issued with the bearer’s name — these can include credit cards or library cards

Major banks in Australia allow applicants to open accounts online. Bank accounts made online must be identity verified in branch locations, in person, before they can be used.

Setting up a Business Bank Account

In order to set up an Australian business bank account, applicants must operate a registered business in Australia and provide a number of additional details.

1. Register Your Business

Before opening a business bank account in Australia it’s necessary to first register an Australian business and secure an Australian Business Number (ABN). Any business entity seeking to open a corporate bank account must incorporate an Australian company.

For more information on how to register an Australian business, see the Fullstack guide on how to apply for an ABN in Australia.

2. Determine What Kind of Account You Need

    Major Australian banks offer a variety of bank account types to businesses. These account types include:

  • Business Transaction Accounts: These accounts are designed to be used for day-to-day transactions, and are ideal for businesses that intend to take electronic payments from clients or other businesses
  • Business Savings Accounts: Savings accounts allow businesses to generate interest on saved profits. These accounts typically require notice be given to the bank before withdrawals can be made
  • Business Term Deposits: Business term deposit accounts are functionally similar to savings accounts, but have set expiry dates and fixed interest rates. Capital cannot be withdrawn from business term deposit accounts without incurring penalty fees

3. Choose a Bank

    The Australian banking ecosystem is dominated by four major banks, commonly referred to as the “Big Four”. These banks are:

  • National Australia Bank
  • Commonwealth Bank
  • ANZ Bank
  • Westpac

4. Set Up Your Business Bank Account

Each bank places different requirements on applicants seeking to open a business bank account. The basic identity documents required by banks to open business accounts are identical to those required for individual accounts, but also include business registration details such as ABN and ACN.

    The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 dictates that all account holders and signatories to a business banking account must be fully identified. Companies applying for a bank account must provide:

  • Full company name, as registered with Australian and Securities Investments Commission (ASIC)
  • Australian Business Number and Australian Company Number
  • Company’s registered office and place of business addresses
  • Full names of all company directors
  • Date and state of registration or incorporation
  • Full business name/trading name
  • Regulatory and licensing details
  • Foreign tax residency information if applicable

Do I Need to be an Australian Citizen to Set up an Australian Bank Account?

Non-residents are able to open bank accounts in Australia however visiting an Australian bank branch with ID is often part of the process with the major banks. Business accounts applicants must be made for businesses registered in Australia, however US citizens applying for bank accounts in Australia must provide tax identification details as part of the application process.

Key Takeaways

Establishing a business bank account in Australia can be straightforward, but there are a number of factors to consider — different banks provide different benefits to businesses, and have varying requirements for foreign account holders. If you’re able to provide a bank with the necessary ID and business registration documentation, the application process is fast and simple.

If you’re considering opening an Australian business bank account and you’re not sure which bank is suitable for your business, reach out to Fullstack for detailed guidance today.

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Stuart Reynolds is the founder of Fullstack Advisory, an award-winning accounting firm for businesses leading the future. He is a 3rd generation accountant who specialises in tech & online companies.

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