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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| Factor | Sole Trader | AU Pty Ltd | Foreign Entity | Discretionary Trust |
|---|---|---|---|---|
| Setup Cost | Low | $500–$1,500 | Varies by country | $2,000–$5,000 |
| Ongoing Compliance | Low | Medium (ASIC, ATO) | Host country rules | High (annual trust returns) |
| Tax Rate on Profit | Personal rate | 25% or 30% | Host country rate | Beneficiary's rate |
| Franking Credits | ✗ N/A | ✓ Available | ✗ Not available | ✓ Via company |
| Personal Liability | Unlimited | Limited | Depends on structure | Limited (trustee) |
| PE Risk in Host Country | Medium | High | Low (if structured well) | Medium |
| PSI Rules Risk | High | Medium | Low | High |
| Best for | Low revenue, simple | AU clients, AU assets | Foreign clients | AU family, income split |