Mr Ramos Horta's visit comes at a tense time in bilateral ties The President of East Timor, Jose Ramos Horta, is due to open a new embassy for his young country in Canberra - a gift from the people of Australia.
The embassy has been financed through charitable fund-raising. It is thought to be the first time one country has gifted an embassy to another.
But Mr Ramos Horta's five-day visit comes at a time when relations between the two neighbours are tense.
Mr Ramos Horta has said Australian developmental aid is being misdirected.
In a letter to the Australian ambassador on the eve of his visit, he claimed that the vast majority of donor money was spent not on East Timor but consultants, study missions, reports and recommendations.
The oil and gas which lie beneath the Timor Sea are another point of contention. Ever since East Timor gained independence from Indonesia in 2002, the negotiations over these lucrative deposits have been fractious.
In a country where 50% of the population gets by on just $1 (£0.70) a day, many view Australia and its resources companies as mean-spirited for trying to grab too big a share, and for not doing enough to create jobs on East Timorese soil.
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