What Is the Definition of an Australian Business?

In March 2025, the Australian Government introduced an official definition of an "Australian business" within the context of Commonwealth procurement. This initiative aims to enhance transparency and support local enterprises in securing government contracts.​

Understanding the Definition

According to the Department of Finance, a business qualifies as an Australian business for Commonwealth procurement purposes if it meets all the following criteria:

The business, including any parent entity, must have at least 50% Australian ownership or be principally traded on an Australian equities market.​

The business must be an Australian resident for tax purposes.​

The central location from which the business operates must be in Australia.​

This definition applies to various business structures, including companies, partnerships, and trusts. For instance, at least 50% of each class of partnership interest must be Australian-owned. In trusts, at least 50% of the owners of securities or assets must be Australian. An "Australian" refers to an Australian citizen, a permanent visa holder, or a special category visa (subclass 444) holder.

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Purpose and Implementation

The primary goal of establishing this definition is to collect data on the participation of Australian businesses in Commonwealth procurement. This information will provide a clearer picture of the engagement levels of local businesses with government contracts and help inform strategies to enhance their competitiveness.​

The implementation of this definition will be phased:

• Initial Phase
  Applies to select Whole of Australian Government Panels, including the Management Advisory Services and People Panel.​

• Subsequent Phases
  Will extend to suppliers on all panels and eventually to all suppliers on AusTender, allowing them to identify themselves as Australian businesses within the system.

Implications for Businesses

Businesses that meet the criteria can self-declare their status as Australian businesses for procurement purposes. This declaration must be made by an authorised individual, such as a director or partner, who comprehensively understands the business's structure and operations.​

It's important to note that while this definition aids in data collection and engagement strategies, it does not confer preferential treatment in procurement processes. Australia's international procurement commitments mandate non-discrimination, ensuring all suppliers are evaluated based on commercial, legal, technical, and financial merits. ​

Next Steps

If you believe your business meets the Commonwealth definition of an Australian business, here's how you can proceed:

Establishing a clear definition for Australian businesses marks a significant step towards enhancing the transparency and inclusivity of Commonwealth procurement. By understanding and aligning with this definition, companies can better position themselves to engage with government contracts and contribute to Australia's economic landscape.​

For more detailed information and guidance, visit the Department of Finance's official page on the Definition of an Australian Business.