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Business Structure Abroad

Compare sole trader, AU Pty Ltd, foreign entity, and partnership structures for Australians running a business from overseas — tax, liability, and compliance.

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👤 Sole Trader / Individual

Simplest structure. Income taxed at your personal rate. ABN required for AU business activity. PSI rules may apply.

🏢 AU Pty Ltd Company

AU company taxed at 25% (small business) or 30%. Dividends to non-resident owner face 30% WHT (or DTA rate). Creates PE risk in host country.

🌍 Foreign Company / Entity

Incorporate in host country. AU may treat as AU-sourced if management/control in AU. CFC rules may apply if AU residents hold 50%+.

⚖️ Discretionary Trust

Trustee in AU required for residency. Non-resident beneficiaries face 47% WHT on distributions. Complex but flexible for family income splitting.

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Structure Comparison

FactorSole TraderAU Pty LtdForeign EntityDiscretionary Trust
Setup CostLow$500–$1,500Varies by country$2,000–$5,000
Ongoing ComplianceLowMedium (ASIC, ATO)Host country rulesHigh (annual trust returns)
Tax Rate on ProfitPersonal rate25% or 30%Host country rateBeneficiary's rate
Franking Credits✗ N/A✓ Available✗ Not available✓ Via company
Personal LiabilityUnlimitedLimitedDepends on structureLimited (trustee)
PE Risk in Host CountryMediumHighLow (if structured well)Medium
PSI Rules RiskHighMediumLowHigh
Best forLow revenue, simpleAU clients, AU assetsForeign clientsAU family, income split