Australia's cheapest route to a fully legitimate business costs nothing at all: a sole trader trading under their own name needs an ABN and that's it, no fee attached. A Pty Ltd company is a different story, and the price of setting one up is going up again this year. Here's how the process breaks down for 2026.
1. Sole trader or Pty Ltd
Two structures cover the vast majority of new Australian businesses.
- Sole Trader. The cheapest, least complicated option. You operate as an individual, carry personal liability for whatever the business owes, and it suits freelancers and small service operators well, especially anyone testing an idea before committing further.
- Pty Ltd (Proprietary Limited Company). A distinct legal entity that caps personal liability, and generally the structure of choice once you're bringing in co-owners, chasing capital, or planning real growth. At least one director has to be an Australian resident.
Founders based overseas have two options: incorporate a Pty Ltd (the resident-director requirement still applies) or register a branch of their existing foreign company instead, though a branch tends to work out more expensive overall once a local agent and ongoing compliance costs are added in.
2. Registering the business
Getting an ABN (Australian Business Number) is free and, whichever structure you pick, usually the first thing you'll do. Trading under a name other than your own legal name means registering a business name, which runs AUD $44 to 47 for a single year or roughly $102 to 108 for three years at 2026 rates. Registering a Pty Ltd with ASIC costs $611 up to 30 June 2026 and $636 from 1 July 2026, usually clearing in 1 to 3 business days; you'll also need a registered office address and either a company constitution or reliance on the Replaceable Rules set out in the Corporations Act 2001. Registering a foreign company branch instead carries the same $636 ASIC fee, plus professional service fees that typically run $3,500 to 5,000, on top of ongoing costs for a local agent (from $1,900 a year) and a registered office (from $500 a year).
3. Licenses and permits
There's no single national business license covering all of Australia. What applies depends on your industry and your state, so beyond the standard ABN/ASIC registration, check with your state's small business office and your local council for anything specific to your trade.
4. Corporate tax, income tax, and GST
Pty Ltd companies pay 25% corporate tax as base rate entities if turnover is under $50 million, and 30% once it exceeds that. Sole traders instead pay individual income tax on business profit at their own marginal rate. GST registration becomes compulsory once annual turnover hits or passes $75,000, and registering itself costs nothing, though from that point you'll be lodging a Business Activity Statement (BAS) either monthly or quarterly. Taking on staff brings PAYG Withholding into the picture, and possibly state-based Payroll Tax once wages cross certain thresholds, along with Fringe Benefits Tax on non-cash perks you provide.
5. Staying compliant
Pty Ltd companies owe ASIC an annual review fee, $342 from 1 July 2026 (up from $310), in addition to the usual accounting work and BAS lodgements. Sole traders skip that ASIC fee entirely and deal only with regular income tax and GST filings. It's a real ongoing cost gap between the two structures, worth weighing alongside the upfront registration fee rather than looking at that fee in isolation.
Australia business costs at a glance
| Item | Cost |
|---|---|
| ABN registration | Free |
| Business name (if not trading under own name) | $44 to 47/year |
| Pty Ltd registration (ASIC, from 1 July 2026) | $636 |
| ASIC annual review fee (from 1 July 2026) | $342/year |
| Corporate tax (base rate entities, under $50M turnover) | 25% |
| Corporate tax, standard | 30% |
| GST, standard rate | 10% |
| GST registration threshold | $75,000 turnover |
Frequently asked questions
How much does it cost to register as a sole trader in Australia?
Free, an ABN alone is genuinely all you need if trading under your own name.
Does Australia require a resident director for a Pty Ltd?
Yes, at least one director must be an Australian resident, a real point of friction for foreign founders compared to some other countries.
What's the corporate tax rate in Australia?
25% for base rate entities with turnover under $50 million, 30% for larger companies.
When do I need to register for GST in Australia?
Once annual turnover reaches or exceeds $75,000. Registration itself is free.
How much does it cost to register a Pty Ltd in Australia?
$636 from 1 July 2026, up from $611, plus an annual ASIC review fee of $342.
Fees and rates above come from ASIC and the Australian Taxation Office (ATO) as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to an Australia-qualified accountant or lawyer about your specific situation.