Business licensing
In addition to registration with the Australian Taxation Office, a business license may be required by another government agency that allows the business to conduct business within that particular sector.
Different types of licenses you need for your business
The necessity for a business license depends largely on the type of business model, the industry it operates within, and the specific regulations of the local, state, or federal jurisdiction.
Remittance providers (AML/CTF)
Remittance service providers facilitate the transfer of funds, usually internationally, on behalf of customers. Given the potential risks associated with money transfers, such as money laundering and terrorist financing, many jurisdictions have put in place specific registration and regulatory requirements for remittance service providers.
AUSTRAC (the Australian Transaction Reports and Analysis Centre) is Australia’s financial intelligence agency and anti-money laundering (AML) and counter-terrorism financing (CTF) regulator. Businesses that provide remittance service are required to enrol and register with AUSTRAC.
Businesses must implement an AML/CTF program designed to identify, mitigate, and manage the risk of their products or services being misused for money laundering or terrorism financing. The program typically consists of two parts:
- Part A focuses on the risk assessment and includes employee due diligence procedures.
- Part B focuses on customer due diligence, including the identification and verification of customer identities.
Transactions that involve physical currency of A$10,000 or more.
Businesses are required to keep records of transactions and customer identifications for seven years.
Registered entities are generally required to submit an annual compliance report to AUSTRAC about their compliance with the AML/CTF Act and Rules.
Continuously monitor customer transactions and conduct due diligence, especially for high-risk customers or transactions.
Any changes to the registered details, such as a change in business structure, management, or operations, must be notified to AUSTRAC within 14 days.
Non-compliance with AUSTRAC’s requirements can lead to significant penalties, so it’s crucial to be thorough and consult with experts when navigating the process. Always refer to AUSTRAC’s official guidelines and resources for the most accurate and updated information.
Before starting operations, remittance service providers should thoroughly research the specific requirements of the jurisdiction in which they plan to operate. Engaging with legal experts or consultants familiar with the financial services industry can be beneficial in ensuring compliance and successful registration.
Registered Training Organisation license
A Registered Training Organisation (RTO) is a term specific to Australia and represents an institution or training provider that is recognized by the Australian government to deliver vocational education and training (VET) services. RTOs can be private institutions or public TAFEs (Technical and Further Education institutions).
RTOs are registered by the Australian Skills Quality Authority (ASQA) or, in some cases, state-specific registering bodies. The registration ensures that the training provider meets specific standards and requirements in terms of curriculum, quality, and administrative processes.
RTOs are authorized to deliver nationally recognized courses and issue nationally recognized qualifications, such as:
- Certificates I to IV
- Diplomas
- Advanced Diplomas
- Vocational Graduate Certificates
- Vocational Graduate Diplomas
Training delivered by RTOs is usually based on nationally endorsed industry training packages. These packages specify the skills and knowledge required for specific jobs or industries.
RTOs are required to adhere to the Standards for Registered Training Organisations (RTOs) 2015. These standards ensure consistent, high-quality training and assessment services across Australia.
RTOs undergo regular audits by the ASQA or relevant state bodies. These audits assess compliance with the national standards and ensure that quality education is being provided.
RTOs require students to have a Unique Student Identifier (USI), a reference number that allows students to access their training records and results.
For RTOs that want to provide courses to international students, they must also register on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS).
Australian Financial Services (AFS) license
The Australian Financial Services Licence (AFSL) is a mandatory license for any business or individual who wishes to provide financial services in Australia. The AFSL system is regulated and overseen by the Australian Securities and Investments Commission (ASIC), Australia’s corporate, markets, and financial services regulator.
Entities or individuals that provide financial product advice to clients, deal in financial products, make a market for financial products, operate registered schemes, provide custodial or depository services, or engage in other specified activities related to financial products generally need to hold an AFSL.
Holders of an AFSL have continuous responsibilities, including:
- Meeting the “fit and proper person” requirements.
- Maintaining competence to provide financial services.
- Ensuring representatives are adequately trained.
- Complying with financial requirements, such as solvency.
- Having internal and external dispute resolution mechanisms.
In summary, the AFSL framework in Australia is designed to uphold the integrity and professionalism of the financial sector. Those looking to provide financial services in Australia should thoroughly understand the requirements and obligations associated with holding an AFSL and may benefit from seeking professional advice during the application process.
Why it is important to get the correct license for your business?
The registration for Remittance Service Providers (RSP), Registered Training Organisations (RTO), and holding an Australian Financial Services Licence (AFSL) serve distinct purposes within their respective sectors.
Money remittance can be used for money laundering, terrorism financing, and other illegal activities. Registering RSPs helps to monitor and curb these activities. In Australian jurisdictions, operating as an RSP without proper registration can lead to penalties or legal actions.
RTOs must meet nationally recognized standards of quality and compliance. This assures students and employers that the training provided meets certain criteria. It’s illegal to operate as an RTO or claim to provide VET services without the proper registration.
It’s a legal requirement for businesses or individuals wanting to provide financial services in Australia. Operating without an AFSL when required can result in severe penalties.
In essence, these registrations and licenses uphold industry standards, protect consumers, and ensure that service providers operate legally, ethically, and efficiently within their respective sectors.
How we can help you?
MNY Licensing team has hands-on experience in helping our clients to apply for the relevant registration/license with the Regulatory Bodies.
Engaging our consultants with the licensing process can significantly simplify the complex process, mitigate risks of non-compliance, and ensure that your business is set up correctly from the outset.
Here is a general guide on how we assist you:
Initial consultation to discuss the business model, objectives and scope of the service within the license
Documentation Assistance to draft, review and update necessary documents
Application submission on your behalf and liaise with the Regulatory Bodies to address any queries or concerns that they might have about your application
Ongoing training & compliance support to your team to meet the requirements under the license
