Advice

Export financial services to Australia

Free Trade Agreement export guide

Overview

The UK-Australia Free Trade Agreement (FTA) supports UK companies’ ability to deliver high-value financial services to clients in Australia and will help to cement the UK’s status as the second biggest provider of financial services in Australia (source: ONS UK trade in services by industry, country and service type, exports: April 2022) - with exports worth £824 million in 2021 (source: DIT UK-Australia FTA Impact Assessment). Australia is an important market for the UK and has one of the largest pools of contestable funds under management globally, valued at around $1.3 trillion Australian Dollars (AUD) (source: Austrade: Australian Industry Capabilities, Financial and Professional Services).

Highly developed financial markets make Australia one of the major centres of capital markets activity in Asia and an attractive market for the UK financial services sector. The retail banking sector is buoyant and relatively open, with a wide range of participants. The Australian funds management sector is one of the largest and fastest growing in the world and has already attracted many non-domestic asset managers. The insurance sector is sophisticated, well established and boasts a significant range of brokers and re-insurers.

The FTA, through increased market access and cementing our similar regulatory and legal frameworks, provides the basis for UK financial services sectors to capitalise on these opportunities.

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The UK is the second biggest provider of financial services in Australia

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UK financial services exports to Australia were worth £824 million in 2021

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Australia's pool of contestable funds under management is valued at around $1.3 trillion AUD


The FTA:

  • provides increased access to the insurance market
  • establishes a dialogue on financial services regulatory cooperation and innovation
  • protects the free movement of data flows between the two countries
  • provides guaranteed access to bid on covered large government contracts
  • gives greater certainty on short-term business travel
  • more than quadruples the investment threshold of deals needing to be reviewed by the Australian Foreign Investment Review Board
  • builds on the UK-Australia Fintech Bridge

What opportunities are there in Australia?

Are you a fintech company looking to establish or expand operations in Australia? Australia is ranked in the top 10 nations for fintechs according to Global Fintech Index Rankings 2021, with strong fintech adoption (source: Findexable, Global Fintech Index, 2021). The UK is recognised as a world-leading fintech hub and a source of expertise in Australia. A number of UK companies have already achieved success in Australia, including Revolut, Wise, Bud, Currencycloud and Recordsure.

Are you an insurance provider with an appetite to provide insurance for large risks? The FTA opens up the Australian market to you, allowing you to provide a much wider range of categories of insurance cover.

Are you a global investment company, based in the UK, who wants to increase their presence in Australia? Investment thresholds have increased more than fourfold to $1.2 billion Australian dollars before being reviewed by the Australian Foreign Investment Board. Increased certainty around short-term business travel will allow you to better plan resourcing.

How can the FTA help you seize these opportunities?

Recognition of professional qualifications

Professional services are a major UK export and play an essential role in facilitating broader trade and investment. To support this important sector, the FTA commits the UK and Australia to encourage their regulators to agree mutual recognition arrangements in order to streamline and remove costly and burdensome requalification requirements. The Professional Services Working Group will help to monitor and drive results on the recognition of professional qualifications by facilitating engagement between UK and Australian governments and relevant regulatory bodies.

Insurance

The FTA ensures that UK financial services companies are treated fairly and can compete on an equal footing with Australian companies. For the first time, the UK and Australia have committed to allow both parties’ firms to provide insurance of additional categories of large risks (such as fire and natural forces, property) and insurance of large risks relating to multinational corporations in each others’ country.

Fintech

The UK is a key player in fintech, employing over 75,000 people (source: HMT and DIT: UK fintech: state of the nation: 2019) and making up around 10% of a global market which is forecast to grow to £380 billion by 2030 (source: HMT, 'The Kalifa Review of UK Fintech’, 26th February 2021).

The FTA builds on the UK-Australia Fintech Bridge, launched in 2018, which commits the UK and Australia to strengthen engagement on fintech policy and regulation, facilitates trade flows, increases access to capital opportunities and addresses barriers to international growth. Australia is on the doorstep to Asia, which is increasingly home to the world’s economic centre of gravity. This makes Australia a great location for fintech companies wanting to establish their Asian regional headquarters.

Greater regulatory cooperation

Our consultation with stakeholders in the financial services sector demonstrated that regulatory cooperation was an industry priority. The FTA establishes a bespoke dialogue between the UK and Australian Treasuries and their financial service regulators with the aim of increasing collaboration around shared objectives and principles.

Free flow of data

Data flows are essential to a thriving digital economy and are especially relevant in a data-rich sector like financial services to reduce payment fraud, improve the sector’s security and resilience, and underpin innovation. This deal ensures data can flow freely between the two countries whilst retaining the UK’s high standards on data protection. This means businesses will not face unjustified barriers to data flows, such as the requirement to store their data in costly servers in Australia.

Procurement

The FTA ensures that covered government procurement opportunities in the UK and Australia are non-discriminatory and transparent. UK businesses can bid for government procurement opportunities on equal grounds with Australian businesses. For example, UK businesses will now have a right to bid for financial and business service contracts procured by the Australian Financial Security Authority and other federal and state-level finance departments. This will help UK businesses compete on an equal footing with Australian companies.

Electronic verification

Financial services companies will benefit from the guaranteed legal validity of a wide range of electronic trust services. This will ensure consumers and businesses can use electronic signatures, electronic contracts, electronic seals, and electronic timestamps which are more efficient and secure. Businesses will not have to ship physical contracts around the world, and financial services companies will have greater security on the validity of electronic contracts in the event of any dispute.

Investment

For those looking to expand their business and invest in Australia, the deal means fewer UK investments will need to go through Australia’s Foreign Investment Review Board. Now, only investments over $1.2 billion Australian dollars, other than those in certain sensitive sectors, will be subject to review, more than quadrupling the UK’s previous threshold. UK enterprises will also gain guarantees that limit nationality and residency requirements for their senior managers and boards of directors. This will provide greater control over business operations and recruitment.

Specific performance requirements – such as export restrictions, local content requirements, headquarter localisation requirements, and mandatory levels of research & development – will be prohibited. This will limit barriers to investment and minimise market distortions.

UK investors will be covered by a range of investment protections. This includes 'Expropriation' and 'Minimum Standard of Treatment' provisions which guarantee UK investors protection from the unlawful expropriation of assets and discriminatory, unfair, or arbitrary treatment by Australia.

These new opportunities could further boost the UK’s £13 billion of direct investment stock in the Australian financial services sector in 2021 (source: ONS ‘Foreign direct investment involving UK companies (directional): Outward, 2021').

Easier business travel

The UK has the highest concentration of global financial institutions in the world, producing a steady stream of the finest financial talent. The FTA provides greater certainty and access for British professionals looking to deliver services in person in Australia. The FTA applies to business professionals under the following categories:

  • business visitors
  • installers and servicers
  • intra-corporate transferees
  • independent executives
  • contractual service suppliers

Australian firms will also no longer have to prove that they can’t find an Australian worker before they sponsor a UK professional.

Intra-Corporate Transferees and Independent Executives will now be able to work in Australia for up to four years, double what was previously allowed. For Intra-Corporate Transferees, Independent Executives and Contractual Service Suppliers staying for 12 months or longer, Australia will allow their accompanying spouse or dependent the ability to enter and work in Australia during the same period as their stay, subject to meeting the relevant immigration requirements.

Go here for additional guidance.

Prospective visa applicants should check with the Australian Department of Home Affairs for full visa details and eligibility criteria. Please note that final visa names are set by the destination country and may vary from the FTA business travel category titles.

Additional information for selling services in Australia

Providing services in Australia will have other consequences including for tax, intellectual property and local labour regulations. Please refer to the following for more advice:

Doing business in Australia

Australia shares a common language and culture with the UK, as well as business and legal practices such as intellectual property protection and the rule of law. This makes it easier for UK companies to do business there. With a population of over 25 million, including more than 1 million Britons, Australia is an ideal place to test and develop new products and services. Around three-fifths of the total population live in Australia’s 4 largest cities, making it easy to prioritise where to launch your product or service.

Legal disclaimer

The information provided on this webpage is for guidance only and should not be relied on as a substitute for your own research or independent advice. No investment and/or business decision should be made solely on the basis of information presented in this document. It is recommended that an independent due diligence investigation is conducted before entering into engagement with any individual, firm, company or other organisation mentioned. DBT accepts no responsibility for any loss or damage caused to any person as result of any error, omission, inaccurate or misleading statement in this document. The accuracy, completeness or up-to-dateness of the content of any website mentioned in this document is not guaranteed in any way, implied or explicit.

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