How to open a business account in Australia: A complete guide

Key Takeaways

• Australia is a business-friendly destination with government support, R&D incentives, and funding opportunities for startups.
• Understanding business structures is crucial—sole traders, partnerships, companies, and trusts each have different banking requirements.
• A business bank account is required for most structures, except sole traders, who may use a personal account but are often advised to open a dedicated business account.
• Banks follow a 100-point identification system for verification, requiring a mix of primary (e.g., passport, driver’s license) and secondary (e.g., bank statement, utility bill) documents.
• Different business structures require specific registration documents, such as an Australian Business Number (ABN), Australian Company Number (ACN), partnership agreements or trust deeds.
• Foreign-owned businesses may have additional requirements, including notarised documents and a registered Australian business address.
• Choosing the right bank matters—factors to consider include transaction fees, online banking features, multi-currency support and customer service.

When we think of global business hubs, we often think of Singapore, New York and Dubai. Rarely do we think of Australia. Yet, the country offers plenty of perks, including foreign investment opportunities, R&D tax incentives, ease of doing business and free trade agreements.

What’s more, Australia actively invests in startups and growing businesses. They have accelerator programmes, government grants and venture capital funding, creating a ready-made pipeline of vetted, promising startups for investors to consider.

So, if you’re planning to operate in Australia, you should learn how to open a business bank account. This will help you manage business transactions, streamline tax compliance and establish credibility with clients & suppliers.

In this guide, we’ll cover everything you need to know about setting up a business account in Australia, from the requirements to choosing the right bank for your needs.

Understanding Business Structures in Australia

Before opening a business account in Australia, you must understand the different business structures and how they may affect your banking needs. Take a closer look at them below:

Sole Trader

Considered the simplest business structure, a sole trader is where an individual operates the business under their own name or a registered business name.

Sole trader setups are known for their simplicity, requiring minimal paperwork and startup costs. You’ll handle business taxes as part of your personal income tax. According to the Australian Tax Office (ATO), you can also benefit from a 50% capital gains tax discount on assets held for over a year.

The main downside is personal liability—you’re responsible for all business debts. If your business struggles, creditors can claim your personal assets, like your home or car.

For banking, a sole trader can use a personal bank account but is often required to open a dedicated business account for tax and compliance purposes.

Partnership

A partnership is a business structure where two or more individuals share ownership.

It allows partners to combine their resources and expertise, improving their chances of success. Additionally, a partnership can hire employees to support business operations.

A business account is typically required for partnerships. All partners must provide identification and agree to the account terms.

Company

A company is a separate legal entity from its owners. They have to register with the Australian Securities and Investments Commission (ASIC), which is responsible for regulating businesses and ensuring they follow the rules.

Meaning, a company can enter contracts, own assets and face legal action independently of its owners.

Companies must open a business account in the company’s name, separate from personal finances. Directors and authorised signatories must provide business registration details and identification.

Trust

A trust is a business structure where a trustee (an individual or company) holds assets for the benefit of others (beneficiaries).

Trusts are often used to safeguard, manage and transfer family assets—such as shares, personal property and family businesses—from one generation to the next.

For trusts, you will be obliged to open a business account under the trust’s name, with the trustee managing the account. Additional documentation, such as the trust deed, is typically required.

Documents Needed to Open a Business Bank Account in Australia

While the exact requirements may vary slightly between banks, most financial institutions in Australia require a combination of personal identification, business registration documents and tax-related information. Below is a detailed guide on the key documents you will need.

Personal Identification Documents

Australian banks use the 100-point identification system to verify the identity of individuals opening business accounts. To meet the 100-point requirement, you must provide a combination of documents, with different values assigned to each. Here are some of them:

Source: Australian Federal Police

To complete the verification process, you need to accumulate over 100 points and may be required to provide both primary and secondary documents. The name on these documents must match the one you want on your bank account, or you’ll need supporting documents for any name changes.

In most cases, you’ll need to present the original documents or upload scanned copies online.

Different organisations may assign varying point values to the same document. For example, the Queensland government only assigns 50 points to a passport.

Business Registration Documents

The type of business structure you operate will determine the specific documents you need to provide.

Sole Trader

If you are operating as a sole trader, you will typically need:

• Australian Business Number (ABN) – issued by the Australian Business Register (ABR)
• Business name registration certificate (if trading under a name different from your own)
• Industry type or code
• Personal identification documents (as mentioned above)

Partnership

For a partnership, banks will require:

• ABN or Australian Company Number (ACN) (if registered)
• Partnership Agreement – outlining the roles, responsibilities and ownership structure of partners
• Personal identification of all partners
• Business name registration certificate (if applicable)

Company

If your business is registered as a private company (Pty Ltd), you will need:

• Australian Company Number (ACN) – issued by the Australian Securities and Investments Commission (ASIC)
• Certificate of Incorporation – issued by ASIC upon company registration
• Company Constitution – outlining company rules and governance (if applicable)
• Directors’ and shareholders’ details – personal identification of all company directors and major shareholders (typically holding more than 25% of the company)

Trust

For businesses operating under a trust structure, you will need:

• Trust Deed – outlining the terms and beneficiaries of the trust
• ABN of the trust
• Personal identification of trustees and beneficiaries

Additional Requirements for Foreign-Owned Businesses

If you are a foreign business entity or a non-resident setting up a business in Australia, banks may have additional requirements:

• You must provide the following company registration documents: evidence of legal incorporation or registration in your business’s home country, including certificates of incorporation, articles of association and business licenses. For e-commerce businesses, an Australian virtual office address may be a required part of the registration paperwork.
• For foreign documents to be legally valid in Australia, they must be legalised or notarised. This process, which involves either an apostille or consular legalisation, ensures compliance with Australian legal requirements.

While the list above covers the general requirements, banks may have their own policies and may request additional documents. It’s always best to check with your chosen bank to ensure you have everything needed.

Steps to Open a Business Bank Account in Australia

To open a business account in Australia, here are the key steps you need to follow:

Step 1: Register for an Australian Business Number (ABN) and Australian Company Number (ACN)

To open a business bank account, you typically need an ABN (for all businesses) or an ACN (for companies).

How To Apply for an ABN

An Australian Business Number (ABN) is a unique 11-digit number required for businesses to operate legally in Australia. It is used for tax purposes, invoicing and dealing with government agencies.

To apply for an ABN:

1. Visit the Australian Business Register (ABR) website.
2. Click on ‘Apply for an ABN.’
3. Provide details such as:
   1. Business structure (sole trader, partnership, company, trust).
   2. Business name and address.
   3. Tax file number (TFN) for sole traders or relevant details for companies.
4. Submit the application. If approved, you will receive your ABN immediately or within a few days.
5. If you receive a reference number, it may indicate that we need to verify certain details in your application or require additional information.

If your application is denied, you’ll receive a refusal number and a letter within 14 days. This letter will explain why your application was refused and outline your available options, including your right to request a review.

How to Apply for an ACN (For Companies Only)

A Company (Pty Ltd) must register with ASIC and obtain an Australian Company Number (ACN) before applying for a business bank account.

To register a company and get an ACN:

1. Visit the ASIC website.
2. Choose a company name and ensure it is available. You must choose a name that is not identical to an existing company or business name. Use the name availability search to check if your desired name is available.
3. Decide on company details such as directors, shareholders, and share structure.
4. Complete the company registration form via ASIC or through a registered business service provider.
5. Pay the registration fee.
6. Once registered, ASIC will issue your ACN, which is needed for tax and legal purposes.

Step 2: Choose a Business Bank Account

Once you have an ABN (and an ACN if applicable), you can select a business bank account that suits your needs. Consider the following factors:

Transaction Fees

To avoid excessive costs, businesses should carefully compare bank fee structures, which, while universally present, are often difficult to understand. Typical fees include service, ATM, account, management, transaction, inactivity, overdraft and credit card processing.

Make sure you get precise fee amounts from multiple banks to compare rates. For instance, if your business relies heavily on ATMs or credit card transactions, prioritise banks with lower fees in those areas.

Account Features and Benefits​

Check for mobile apps, ease of use and payment processing options such as bulk payments, payroll and automatic transfers.

Some banks also allow direct integration with software like Xero, MYOB and QuickBooks. This integration can automate data entry, reconcile transactions and provide a real-time view of your financial health.

Customer Support

Reliable customer support can make a big difference in resolving banking issues quickly. If you prefer in-person banking, choose a bank with a strong branch network and accessible ATMs.

For businesses that operate outside regular hours, 24/7 customer support can be valuable. Some banks provide dedicated business banking advisors who offer personalised financial guidance.

Multi-Currency and International Banking

For businesses involved in international trade, you need multi-currency capabilities. An international business account allows you to hold and transact in multiple currencies without constant conversion, reducing exchange rate losses.

Additionally, check the international transfer fees as these can vary significantly between banks. If you frequently convert currencies, comparing foreign exchange rates can help save money over time. Some banks also offer business-friendly solutions like forward contracts to lock in exchange rates and mitigate currency risks.

Step 3: Apply for a Business Bank Account

Most banks allow you to apply online, but some may require an in-person visit to verify documents.

How to apply:

1. Visit the bank’s website and choose a business account.
2. Complete the application form with your business details, ABN/ACN and contact information.
3. Upload or provide required documents for identity and business verification.
4. Attend a verification meeting if required (some banks require business owners to visit a branch). This is especially important for businesses with complex structures where several partners or directors are involved.
5. Activate your account once approved, and link it to your accounting software if needed.

Step 4: Set Up Online Banking and Payment Methods

After your account is activated:

• Enable online banking for easy management.
• Set up payment processing (e.g., PayPal, Stripe, EFTPOS).
• Integrate with accounting software (e.g., Xero, QuickBooks).

The Four Biggest Banks In Australia: Which Bank Should I Choose?

When setting up a business bank account in Australia, selecting the right bank is important. The ‘Big Four’ banks—Commonwealth Bank, Westpac, ANZ and NAB—offer a range of business banking services. Below is a comparison of their key features, fees and benefits to help you make an informed decision.

Keep in mind that there is no one-size-fits-all solution. The best option is the one that fits your specific needs, including transaction volume, banking tools, global business account needs and more.

Final Thoughts

Opening a business account in Australia helps you manage finances, meet tax requirements and build trust with your clients. While the process varies depending on your business structure, having the right documents ready can make things smoother and more efficient.

You can take full advantage of the opportunities Australia has to offer: a strong economy, government support for startups, a business-friendly environment and so much more.

While you settle on the right bank and gather the necessary documents, you can open an international business account with Instarem to start sending and receiving payments globally. This gives you a head start in Australia by ensuring seamless transactions from day one.

• Fast and Easy Setup: Ditch the paperwork and lengthy application processes. Instarem lets you open an account online within minutes.
• International Money Transfer: Send and receive money internationally with competitive rates and transparent fees.
• Mobile-First Convenience: Manage your account on the go with our user-friendly app, eliminating the need for frequent physical branch visits.
• InstaPoints: Earn with each transfer and use them to save up on future payments.
• Fast Transactions: Up to 12X faster than banks. Most business transactions are completed within the same day.
• International Business Payments: Send and receive payments to your overseas partners and employees in over 160 countries, all at competitive exchange rates and low fees. You can also transfer funds securely and efficiently between your different business locations.
• No Hidden Fees: There are no setup or subscription fees, nor are there any hidden charges to surprise you.

With business money transfer services offering competitive exchange rates and low fees, Instarem helps you manage money transfer for business wherever you are. Sign up now.

FAQs

Can a foreigner start a business in Australia?

Yes, foreigners can start a business in Australia. You’ll need to register for an Australian Business Number (ABN) and, in some cases, an Australian Company Number (ACN). Depending on your visa status, additional requirements may apply.

Which bank is best for a business account in Australia?

The best bank depends on your business needs. Major banks like Commonwealth Bank, ANZ, NAB and Westpac offer business accounts with various features, including low fees, multi-currency options and digital banking tools. Comparing fees, transaction limits and online banking features can help you choose the right one.

Can I start a business in Australia without PR?

Yes, you don’t need Permanent Residency (PR) to start a business in Australia. However, visa restrictions may affect your ability to operate the business or stay long-term.

Is it better to have a business bank account or a personal account?

A business bank account is generally better, as it keeps personal and business finances separate. This makes accounting, tax reporting and cash flow management easier. Many business accounts also offer features like invoicing, payroll and multi-user access, which personal accounts don’t provide.

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