Chinese Looking To Buy Local Businesses


Chinese Looking To Buy Local Businesses

You’ve probably heard about the Chinese Australia Free Trade Agreement. It’s been on the go for a while now and was finalized and announced a couple of months ago. In a nutshell, it means that Aussie businesses owners can export tariff-free products to the Chinese market and China-based investors have easier access to invest in Australian businesses. You’ve probably also heard about new migrants buying a business as a way towards getting Australian residency or citizenship.

So what does this mean for local small business owners? According to the CEO of Australia’s largest business broker network, Steve Finn, it could be a chance to cash-in and sell your business. Because of the agreement, the Chinese are looking to buy local businesses more than ever. Finn Business Sales operates a national group of specialist advisors in buying and selling businesses. With more than 1,500 businesses listed for sale, Mr. Finn says Australia is in the early stages of a population boom. “We are seeing a continual rise in overseas investors contacting us looking to buy a business in Australia. There is no flavor of the month – they are looking across all businesses, mainstream enterprises in hospitality and retail, manufacturing and wholesale, and agriculture related businesses have been noticeable too.”

The Australian Department of Immigration and State Governments have an extensive investment in bringing overseas funds and expertise down under, offering visas such as the $5m Significant Investor Visa, and also the Business Innovation & Investment Visa. Mr. Finn says that quite often the overseas investors say they are happy to buy the business, and then employ a local management team. “As business brokers, we seem to be their first port of call. They search on the internet looking for businesses. They prefer to deal with a middle-man like ourselves to help them navigate the Australian laws and the negotiation process. Then they are asking for advice on how best to manage the business. In most cases they already have experience in that industry in their home country. For example they might own a few restaurants in Beijing, and want to buy restaurants in Australia.”

Money doesn’t seem to be a barrier either. Mr. Finn says that banks normally don’t get a look in. “These guys have the cash. Culturally they often don’t borrow money for these sort of investments, they accumulate it themselves. We have to remember, we are a small population of only 23 million people. In China alone, they have 1.4 billion and there are said to be more than 4 million millionaires, and it’s now growing by about 1 million a year. In Australia we might know the odd person that’s a millionaire, if we brought those Chinese millionaires to Australia, it would be every 5th person you walk past on the street. They have a phenomenal amount of money.”

Could this be a unique time in history for small business owners? We are the lucky country. A first world country with a stable democratic system, healthcare, education, and world class infrastructure. There’s a lot of people globally who want to live here, and if you are overseas and you have money, there can be a way in if they are prepared to invest their money into the Australian economy, and small business can be the perfect vehicle.