Doing business in the United States
Before entering the US business market, there are a number of factors to take into account including culture, politics and business etiquette.
Austrade can help Australian companies familiarise themselves with local market conditions, as well as assist in developing export opportunities through a range of in-market and Australian-based services.
There is extensive information about doing business in the United States on this website. Please check the USA profile under 'Country Profiles'.
For further information go to the following:
- Full text of the Agreement:
Full text of the Australia-United States Free Trade Agreement (AUSFTA)
Backgrounder to the Agreement: Fact sheets on key chapters and outcomes
Australia and the US already have generous entry arrangements for business people although the Australia-United States Free Trade Agreement does not include a chapter on temporary entry.
For Australian business people visiting the US, the United States has three main temporary visa classes for business temporary residence - the L-1, the H-1B, and (since 2 September 2005) the E3.
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New US visa for Australian business travellers
Following cooperative efforts between Australia and the United States, the new E-3 visa is now available exclusively for 10,500 Australian professionals and business people (and their families) wanting to live and work in the United States.
E-3 Treaty Professional Visa
The E-3 visa applies to Australians with a university degree or its equivalent in their ‘specialty occupation’ seeking temporary residence in the United States to work, sponsored by a business in the United States that is prepared to employ them.
- This visa is subject to an annual quota of 10 500 Australian applicants, not including accompanying spouses and children.
- Spouses of E-3 visa holders are able to work.
- E-3 holders are permitted an initial stay of two years, and indefinite extensions of two years.
Australians who are interested in applying for an E-3 visa should contact their nearest US consulate (Sydney, Melbourne, and Perth). Alternatively, consult the US State Department or Department of Homeland Security (Citizenship and Immigration Services) websites.
Australian citizens who are currently living abroad will be able to apply for an E-3 visa by visiting the nearest US Embassy or Consulate in the country in which they are currently residing.
For further details visit E-3 Visa Fact Sheet.
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The L-1 visa
The L-1 visa applies to personnel on intra-company transfers:
- Spouses of L-1 visa holders are able to work
- If entering as an executive or senior manager, visa holders are limited to a maximum period of stay of 7 years.
- If entering as a specialist, visa holders receive a maximum stay of 5 years.
The H-1B visa
The H-1B visa applies to all other specialists seeking temporary residence in the US, sponsored by a US employer:
- This visa is subject to an annual quota of visa grants
- Spouses of H-1B visa holders are not automatically permitted to work; also, spouses and dependents have to file separate application forms and pay separate processing fees for their applications
- H-1B holders are permitted an initial stay of three years, and one extension of three years
- After the six-year period visa holders are required to leave the country.
Key contacts
Australian Department of Immigration and Citizenship – www.immigration.gov.au
US Citizenship and Immigration Services (USCIS) – www.uscis.gov
Trade in goods
Under AUSFTA, Australia and the United States have agreed to eliminate customs duties on goods originating from the other country. While many agriculture, non-agriculture and manufacturing tariffs were eliminated from 1 January 2005, the elimination of other tariffs will occur in accordance with each country’s schedules under the Agreement.
Trade in services
AUSFTA ensures that Australian businesses can compete in the US market on equal terms with their US competitors in most service sectors, including professional, education, business, environmental and transport services. Both countries are prohibited from placing certain types of limitations on services suppliers of the other country.
AUSFTA has enabled Australian businesses to access the US Federal Government procurement market, which is valued at over $200 billion annually.
By virtue of non-discrimination provisions in the conduct of government procurement, Australia has become a designated country under the US Trade Agreements Act. This means that US Government entities can now consider bids from Australian suppliers. The non-discrimination provisions also require the United States to provide Australia with a waiver from the Buy American Act for contracts to which the Chapter applies.
The Buy American Act (1933, 41 USC 10) imposes a 6% penalty on foreign goods (not services). The waiver enables Australian suppliers to compete in the US procurement market on equal terms with suppliers from the United States and from over 60 other designated countries.
For further information on selling to the US Government, go to the Selling to the US Government Guide on this website.
Easier access to US Surety Bonds
The Australian Export Finance and Insurance Corporation (EFIC) has established a US$50 million bonding line to assist Australian SME exporters in taking advantage of opportunities afforded by the AUSFTA.
This facility helps reduce the complexity of US bonding rules and regulations and can provide exporters with easier access to US surety bonds. EFIC also provides finance, finance guarantees, insurance and bonding facilities.
For further information go to the Export Finance & Insurance Corporation website: www.efic.gov.au.
The Australia-United States Free Trade Agreement creates a liberal, transparent and predictable environment for Australian businesses in the largest economy in the world. It provides greater legal certainty and protection for investors and their investments in both countries, including the obligation of Australia and the United States to protect each others' investors and investments from discrimination compared to local investors and investments.
Changes under AUSFTA to investment have enhanced Australia’s attractiveness as a destination for US investment and provided a strong framework for continuing to promote high levels of two-way investment between Australia and the United States.
For US Investors
The Agreement preserves the ability to examine significant foreign investment proposals in all sectors to ensure they do not raise issues contrary to the national interest. The following changes to Australia's foreign investment policy were agreed under AUSFTA for US investors:
- US acquisitions in non-sensitive sectors are screened where they are over $871 million (this threshold is indexed on 1 January each year to the GDP implicit price deflator).
- US acquisitions in sensitive sectors* will still be screened where they are over $100 million (also indexed).
- The approval process for US acquisitions in Australian financial sector companies has been streamlined.
- US 'greenfield' investments (new businesses) are exempted from notification.
- US acquisitions of developed commercial real estate are also subject to the $800 million indexed threshold.
- All US investment in urban land (except for developed commercial real estate) continues to be examined against existing policy guidelines.
- Existing foreign investment restrictions relating to the media, Telstra, CSL, Qantas and other Australian international airlines, federal leased airports and shipping have all been preserved under the Agreement.
Reflecting the fact that both countries have robust, developed legal systems for resolving disputes with foreign investors, the Agreement does not include provisions for investor-state dispute settlement.
*Sensitive sectors are: media; telecommunications; transport; goods, equipment or technology for defence forces or to be used for a military purpose; encryption and security technologies and communications systems; uranium or plutonium extraction and nuclear facilities.
By 2015 all trade between Australia and the United States in non-agricultural goods will be free of duty, ensuring Australia’s competitiveness against suppliers from other countries that enjoy preferential access to the US market.
Harmonised Commodity Classification Codes
For exporting to the United States, or any other country, it is necessary to identify the Australian Harmonised Export Commodity Classification (AHECC) code for a product in order to meet Australian Bureau of Statistics requirements.
For further information go to the Australian Customs website: www.customs.gov.au.
The preferential tariff rates negotiated under AUSFTA apply only to goods which qualify as ‘originating’ in either country (and are then exported to the other). To qualify as ‘originating’, products must be:
- wholly obtained or produced in Australia or the United States (for example, minerals extracted, vegetables grown, and live animals born in the country)
- produced in Australia or the United States wholly from originating materials; or
- produced in Australia or the United States partly from non-originating materials. In this case, the non-originating materials must meet the requirements of the origin rules in the Annex 4-A (Textiles) and Annex 5-A (Goods other than Textiles). The goods must also satisfy other requirements where applicable.
What are originating materials?
Originating materials are:
- goods that are used in the production of other goods and that are US originating goods, or
- goods that are used in the production of other goods and that are Australian originating goods, or
- indirect materials.
What are non-orginating materials?
The non-originating materials used to produce a good are those materials or components that would not qualify as originating under the AUSFTA rules of origin. Non-originating materials are:
- materials or components imported from a country that is not a member of the AUSFTA (ie. not from Australia or the United States); or
- materials produced in an FTA region but, because of the high level of offshore input used to produce them, do not meet the Rule of Origin.
Claiming Preferential Treatment / Exporting to the United States
Under the Australia–United States Free Trade Agreement, the onus for making a claim for a preferential tariff rate for a product rests with the importer.
The Agreement does not require a Certificate of Origin in support of a claim for preference. However, importers claiming preference for a good must be prepared to submit, upon request by Customs authorities, a statement setting out the reasons why that particular Rule of Origin applies. The Agreement does not specify a particular format for such a statement.
Customs officials can require importers to maintain documents relating to purchases and costs for up to five years after importation should investigation and verification of preference claims be required. Customs officials can also seek information from exporters in verifying claims.
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Tip: While the US importer is responsible for proving to US Customs that a good qualifies as ‘originating’, it is important that the Australian exporter provides sufficient documentation to the US importer to support the origin of the goods and to enable US Customs to prepare a binding origin ruling, should the US importer wish to obtain such a ruling. It is also recommended that an Australian exporter keep records of the origin(s) of its components and detailed costing information (where the goods must satisfy a Regional Value Content (RVC)). For example, most seafood must be both caught in Australian waters and processed in Australia to qualify as originating. |
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Tip: The Agreement allows several methods for calculating Regional Value Content (RVC) which may produce differing results. In some cases specific exceptions also allow for a greater quantity of non-originating materials. It is recommended that companies consider the different ways of calculating the RVC, and examine possible exceptions, in determining whether the goods qualify for preference. |
For further information
The Australia-United States Free Trade Agreement recognises that both Australia and the United States are major agricultural producers and exporters but with different environmental conditions and pest and disease status. Nothing in the Agreement undermines the right of either country to determine the level of protection it considers appropriate.
While AUSFTA does not create any new Sanitary & Phytosanitary (SPS) rights or obligations, in Chapter 7 of the Agreement of the Agreement, Australia and the United States set out a joint approach to SPS and food safety issues.
The main points of this approach are:
- Both countries have reaffirmed that decisions on matters affecting quarantine and food safety will be based on science.
- The Agreement preserves the rights of both countries to protect animal, plant and human health and life in their respective territories.
- Both the Australian and United States regulatory systems, risk assessment and policy development processes are unaffected by the Agreement which does not compromise the quarantine regime of either country.
- The primacy of existing rights and obligations under the WTO Agreement on Sanitary and Phytosanitary Measures (SPS Agreement) are reaffirmed.
Through AUSFTA, Australia and the United States have also agreed to work together to improve understanding of each other's SPS measures and associated regulatory processes.
Two bodies have been established for this purpose:
- The Committee on Sanitary and Phytosanitary Matters meets to discuss general SPS matters and works to enhance the understanding of each Party's SPS measures and associated regulatory processes; and
- The Standing Technical Working Group on Animal and Plant Health Measures
focuses on technical matters relating to market access requests for specific animal and plant products.
Exporting to the United States - The Export Facilitation Program (AQIS)
The Australian Quarantine and Inspection Service (AQIS) Export Facilitation Program provides information and advice for exporters of agricultural and fisheries produce.
This program provides information free of charge on:
- import conditions of destination countries for all agricultural, fisheries and forestry products;
- Australian Export Legislation requirements;
- export documentation, including export permits, health and phytosanitary certificates;
- AQIS quality assurance arrangements;
- premises registration requirements;
- inspection procedures; and
- AQIS fees and charges.
For further information
In Australia:
- The Australian Quarantine and Inspection Service – www.aqis.gov.au
- Biosecurity Australia – the agency of the Federal Government responsible for technical market access issues relating to animal and plant health; part of the Australian Government Department of Agriculture, Fisheries and Forestry – www.daff.gov.au/ba
- Department of Foreign Affairs & Trade / United States Trade Section –www.dfat.gov.au
In the United States:
- US Animal and Plant Health Inspection Service (APHIS) – responsible for technical market access issues relating to animal and plant health – www.aphis.usda.gov
- US Department of Agriculture Food Safety and Inspection Service - administers the US Federal meat and poultry inspection system – www.fsis.usda.gov
The Australia-United States Free Trade Agreement builds on existing rights and obligations under the World Trade Organization Agreement on Technical Barriers to Trade and establishes a framework for exporters to work with government in tackling technical barriers to trade.
Gains for Australia
In Australia, technical regulations for food and manufactured goods are co-ordinated between the Commonwealth and State and Territory Governments. In the United States, standard setting bodies are far more numerous than in Australia and operate in both governmental and private spheres, and at federal and sub-federal levels. As a result, exporters can find it difficult and costly to meet these different standards and technical regulations. Both Australia and the United States have therefore agreed to use, to the maximum extent possible, international standards.
Both countries agreed to give positive consideration to accepting, as equivalent, each other’s technical regulations that adequately fulfil the objectives of their own regulations, and to facilitate the acceptance of each other’s conformity assessment procedures.
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