The recent threat of 25% tariffs on Canadian exports by the United States has created uncertainty for Canadian businesses. To remain competitive, Canadian companies are looking beyond the United States, and we have published a series of articles explaining why Australia offers many opportunities to Canadian businesses.
Canadian businesses already export electrical and mechanical equipment used in the agricultural, industrial and construction equipment; aluminium products for the construction industry; medical devices; pharmaceuticals and chemicals used for prescription drugs and manufacturing; raw pulp, finished paper and wood products; agricultural products and seafood. When looking at services, Australia is a quick adaptor to technology and many Canadian businesses have expanded their services to Australia due to Australia being a good test market for artificial intelligence, cyber security and innovative technology.
R&D Tax Incentives
Canadian products may not be suitable for the Australian environment, as Canadian products have been tested and manufactured for cold environments, whereas Australia has a hotter, dryer and possibly wetter environment. It is the Australian government’s research and development tax incentives that provide Canadian businesses with a great environment to undertake R&D to adapt their products for the Australian climate.
The R&D tax incentive provides businesses with a 43.5% refundable tax offset for businesses with under $20 million in revenue. This incentive is similar to the Scientific Research and Experimental Development (SR&ED) program offered by the Canadian government. The main catch is that your Australian subsidiary entity will be required to own your newly developed modification, improvement or enhancement to your Canadian product to be eligible for the R&D tax incentive, but unlike Canada, the R&D tax incentive is guaranteed funding to all eligible companies, and there are no competitive grant processes. Further, the R&D tax incentive does not have an “Australian-controlled” ownership rule, unlike the SR&ED which require Canadian companies to be controlled by Canadians to obtain the SR&ED.
Company Incorporation
To incorporate a subsidiary in Australia, you require an Australian resident director. Sometimes, this may be difficult for a Canadian business, and this is why MurdockCheng Legal Practice (MCLP) offers local director services; virtual office services; bank account facilitation; and other corporate compliance services. If we are unable to assist, then we have third-party suppliers who we have worked with over many years to assist you in your requirements, including tax advisors and accountants.
About MCLP
Damin Murdock is from the Ottawa Valley; a graduate from the University of Western Ontario (Finance); holds a Juris Doctor from Australia (International Trade Law); a Masters of Laws from Erasmus University Rotterdam (International Business Transactions); President of the Canadian Australian Club (Sydney); and Treasurer of the North American Australian Lawyers Alliance.
MCLP has been operating in Sydney and Melbourne for more than a decade, and most of our lawyers hold business administration degrees ensuring you are receiving both practical and legal solutions for your expansion to Australia.
For more information, call our office on +61 2 9262 5495 or email Mr Murdock directly at dmurdock@mclp.com.au for a free consultation, or subscribe to our newsletter by visiting https://mclp.com.au/publications/
For additional information and support:
- Canadian Consulate-General in Sydney
📍 Level 6, Quay West, 111 Harrington Street, Sydney NSW 2000
📞 +61 2 9364 3000 | ✉ sydny@international.gc.ca - Canadian High Commission in Canberra
📍 Commonwealth Avenue, Canberra ACT 2600
📞 +61 2 6270 4000