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CoSec has helped hundreds of clients establish companies in Australia either as a virtual company or a fully operational local presence. Here are answers to some of the common questions about setting up a company in Australia, and Australia’s basic corporate requirements.

Foreign Companies - Establishing a Business in Australia

Given its strong economy, robust banking system and excellent quality of life, it’s no surprise that we receive many enquiries from foreign companies about international expansion to Australia.

A foreign company that decides to establish a business presence in Australia can do so in several ways. The two most common and simple are:

  1. Proprietary Company – establishing or acquiring an Australian subsidiary company, a separate legal entity
  2. Registered Foreign Company – establishing a branch office by registering with ASIC to do business in Australia

Foreign companies should consider the various ways to enter the Australian market. Each has its advantages and disadvantages, as well as legal, regulatory and taxation implications.

Not sure what kind of company you need to set up in Australia? See our Australian Company Types for Your International Expansion Fact Sheet for a broad comparison of the main Australian company types and the regulatory and legal requirements for each.

Propriety Companies - Setting up in Australia

Many companies decide to establish a separate Australian entity to manage their Australian operations. This is known as a Proprietary Limited (Pty Ltd) Company. A Pty Ltd company would be no different from any other Australian Pty Ltd company, but other Australian companies and government bodies may feel more comfortable interacting with a Pty Ltd than a Registered Foreign Company. The process for the establishment and incorporation of a Pty Ltd company is easy, fast and inexpensive.

  • Must use the suffix Pty Ltd or have Proprietary Limited in their company name
  • Provide limited liability to shareholders, meaning that the liability falling upon shareholders in the event of a wind-up is equivalent to the unpaid amount (if any) on their shares
  • Must have at least one director who is a resident of Australia, and a resident company secretary if any secretary is appointed
  • Must have a Registered Office located in Australia
  • Proprietary Companies generally cannot engage in fundraising activities that would require the lodgment of a prospectus (i.e. seeking to raise funds from the public). They can, however, raise money through private sales of equity
  • Proprietary Companies cannot have more than 50 non-employee shareholders

A Proprietary Company may be classified as a Large Proprietary Company if two out of these three criteria are met:

  1. The consolidated revenue for the financial year of the company and any entities it controls is $50m or more
  2. The value of the consolidated gross assets at the end of the financial year of the company and any entities it controls is $25m or more
  3. The company and any entities it controls has 100 or more employees at the end of the financial year

If a company does not satisfy at least two of the above criteria, it is considered a Small Proprietary Company.

There are two main steps in the process of incorporating a Proprietary Company.

Step 1. Choose an available company name

A register of Australian company and business names is maintained by the corporate regulator, Australian Securities and Investments Commission (ASIC). A simple name search can be undertaken on their website.

Step 2. Complete ASIC Form 201 Application for registration as an Australian company. This involves a fee of $495 payable to ASIC.

In order to complete the form, the following information must be provided:

  • Details of directors and secretaries including full names, addresses, dates of birth and places of birth. You must have consent from all officers before incorporating the company.
  • Details of the Registered Office in Australia
  • Details of the shareholders and share structure
  • Details of holding companies if applicable

For more information on incorporating a Proprietary Company in Australia, see our Company Incorporation Fact Sheet.

Once the company is incorporated, various other matters need to be undertaken, including:

  • Applying for an Australian Business Number (ABN) and Tax File Number (TFN) with the Australian Business Register (ABR)
  • Maintaining various statutory company registers
  • Nominating a Public Officer with the Australian Taxation Office (ATO)
  • Opening a bank account (this is required in order to register with the ATO)

CoSec has set up and managed hundreds of Pty Ltd companies for foreign businesses from around the world. See our Company Incorporation services for more information on our tailored solution for your international expansion.

All Australian companies are required to keep financial records and various registers of their financial and administrative transactions.

If the company is considered a Large Proprietary Company, it must also prepare annual financial reports that are:

  • Prepared in accordance with Chapter 2M of the Corporations Act 2001
  • Audited
  • Lodged with ASIC within 4 months of the financial year end
  • Sent to members within 4 months of the financial year end

Proprietary Companies that are wholly owned by foreign subsidiaries must also fulfil these reporting requirements unless relief is granted by ASIC. CoSec can assist in applying for this relief.

Companies must also notify ASIC if the following changes are made:

  • Company name (within 14 days of the change)
  • Company details e.g. Registered Office or principal place of business (within 28 days of the change)
  • Company constitution (within 28 days of the change)
  • Directors’ details: names, addresses, new appointments or resignations (within 28 days of the change)
  • Share structure or shareholder details (within 28 days of the change)

The above is a very basic list of the requirements of setting up a Proprietary Company in Australia.  We strongly recommend seeking professional assistance.

Our comprehensive and seamless services are specifically designed to help offshore companies expand into Australia. CoSec’s streamlined process ensures that your Australian presence will be fully operational within four weeks of providing us with all required information. See our Company Incorporation services for more information on CoSec’s solution for your international expansion.

Our Fact Sheets also provide detailed information on corporate compliance and conducting business in Australia.

Registered Foreign Companies - Setting up in Australia

If a foreign company wishes to carry out business in Australia but does not wish to incorporate a separate Australian entity to manage its Australian operations, the foreign company can register directly with the Australian Securities and Investments Commission (ASIC). A Registered Foreign Company in Australia is not a separate legal entity from the parent company. In practice, this is similar to establishing a Representative Office or branch of a foreign company in another country.

There are 3 key steps to setting up a Registered Foreign Company in Australia.

Step 1 – Ensure the name you wish to register is available

The ASIC website has a business name search tool that you can use to check if a business name is available. A business name cannot be used if it is reserved by another entity, currently in use, or is deemed by ASIC to be unacceptable or misleading (see Schedule 6 of the Corporations Regulations 2001 for specific details).

If the desired name is available and you wish to reserve it to prevent others from adopting the name while you are organising your registration, you can do this by filling out ASIC Form 410 – Application. If approved, the name will only remain valid for two months, so it is imperative that it is then registered in a timely manner.

The fee for reserving a name is $50.

Step 2 – Complete the relevant application form and compile accompanying documents

ASIC Form 402 must then be completed in order to register the foreign company.

A number of documents must also be lodged along with ASIC Form 402, including:

  • A certificate from the company’s governing body in its home jurisdiction that confirms the company is registered. This certificate must be dated no earlier than 3 months before lodgement with ASIC.
  • A certified copy of the company’s constitution (certified by ASIC, a notary public or a company officer with a duly certified affidavit)
  • A completed ASIC Form 418 – Memorandum of appointment of local agent (see post-registration obligations below for information on retaining a local agent).
  • A memorandum stating the powers of certain directors. If the directors listed in Form 402 include resident directors in Australia, or if there are members of a local board of directors, the company must lodge a memorandum stating the powers vested in those directors.

Step 3 – Lodge the form and accompanying documents with the prescribed lodgement fee

The cost of lodgement of ASIC Form 402 is $495. Once the application is processed and approved, ASIC will issue an Australian Registered Body Number (ARBN) which is a unique, 9-digit code. This is similar to an ACN (Australian Company Number), but specific to registered foreign companies.

ASIC can take up to 28 days to process an application to register a foreign company.

We have extensive experience in managing the registration of foreign companies with ASIC, as well as acting as Local Agent for many foreign companies. See Local Agent for Foreign Companies for more information on CoSec’s Registered Foreign Company solutions.

Once the foreign company is registered with ASIC and has an ARBN, there are a number of post-registration obligations that the company must comply with.

  1. Appoint a Local Agent

At all times, a Registered Foreign Company must have a local agent. By definition, a local agent:

  • Is answerable for the doing of all acts, matters and things that the foreign company is required to do by, or under, the Corporations Act
  • Is personally liable for a penalty imposed on the foreign company for a contravention of the Corporations Act if a court or tribunal hearing the matter is satisfied that the local agent should be so liable

ASIC Form 418 is used to initially appoint the original local agent, as well as to appoint new or replacement local agents. ASIC Form 404 must also accompany Form 418 when appointing a replacement local agent.

Local agents act as a representative of the foreign company in Australia and are able to lodge ASIC forms on behalf of the company.

CoSec can appoint an experienced and Australian-based Local Agent to expertly manage your compliance, legislative and regulatory requirements. See Local Agent for Foreign Companies for more information on our Registered Foreign Company solutions.

  1. Display Company Name

A Registered Foreign Company must display its name in a conspicuous position and in legible characters outside every office and place of business in Australia that is open and accessible to the public. It must also display its place of origin, the words ‘Registered Office’ at its Registered Office, and the word Limited or Ltd, or a notice that the liability of its members is limited, if that is the case.

  1. Correctly use ARBN

There are strict guidelines regarding the use of the Registered Foreign Company’s ARBN. In summary, it must be displayed in legible characters in company correspondence, along with the words “Australian Registered Body Number” or ARBN.

  1. Lodge a Financial Statement

Registered foreign companies must lodge financial statements with ASIC annually (at intervals no longer than 15 months). Financial statements comprise a balance sheet, profit and loss, and cash flow statement, any other documents the company is required to prepare by the law that applies in its home jurisdiction (such as an audit report), and an ASIC Form 405 – Statement to verify financial statements of a foreign company. The lodgement fee is $1,233. Financial statements must be lodged in original, hard copy format.

For companies exempt from lodging a form 405, a Form 406 Annual Return of a Foreign Company is required to be lodged for the same fee of $1,233.

For a complete list of reporting requirements and exemptions, please refer to ASIC Regulatory Guide 58.

Notify ASIC of Other Changes

Registered foreign companies must also notify ASIC of the following changes:

  • Change of name, constitution or powers of local director (Form 409)
  • Change of Registered Office address or opening hours (Form 489)
  • Change in directors (Form 490)
  • Ceasing business or winding up (Form 407)

For more information, read our FAQs below on Managing your Australian Company – What you need to know

We have extensive experience in managing the registration of foreign companies with ASIC, as well as acting as Local Agent for many foreign companies. See Local Agent for Foreign Companies for more information on CoSec’s Registered Foreign Company solutions.

Our Fact Sheets also provide detailed information on corporate compliance and conducting business in Australia.

NB: This information above does not constitute legal advice. All lodgement fees are current at the time of publication and may be subject to change.

Managing your Australian Company – What you need to know

In summary, Section 201B of the Corporations Act 2001 states that a director can be any individual who:

  • Is at least 18 years of age
  • Is not disqualified from managing corporations, unless leave is granted by ASIC (under s206F(5)) or by a court (under s206G)

Yes, provided they meet the section 201B requirements of the Corporations Act 2001, which are in summary any individual who:

  • Is at least 18 years of age
  • Is not disqualified from managing corporations, unless leave is granted by ASIC (under s206F(5)) or by a court (under s206G)

No. Proprietary Limited (Pty Ltd) companies must have at least one Australian Resident as a director. Public Companies (ending in Limited or Ltd) must have two directors who are Australian residents.

For more information, read our FAQs below on “What is an Australian Resident Director and Why Do I Need One?” .

A Proprietary Company (ending in Pty Ltd) may have only one director. A Public Company (ending in Limited or Ltd) must have a minimum of three directors, two of whom are required to be Australian residents. There is no prescribed maximum number of directors in the legislation.

CoSec can appoint experienced Australian-based Resident Directors to fulfil your compliance, legislative and regulatory requirements. See our Resident Director & Company Officer Services for more information on CoSec’s solution for your international expansion.

The Corporations Act 2001 states that a Resident Director “must ordinarily reside in Australia.” “Ordinarily reside” is not a concept defined by the Corporations Act 2001 and ASIC has not provided guidance on what constitutes a resident of Australia. It is up to the individual to determine whether they “ordinarily reside” in Australia, taking into account all circumstances, including their tax residency, citizenship or right of residence, domicile, home address, etc.

No. Under section 248A of the Corporations Act 2001, which is a replaceable rule, the directors of a company may pass a resolution without a directors’ meeting being held if all the directors entitled to vote on the resolution sign a document containing a statement that they are in favour of the resolution.

A company’s constitution may allow for further methods of board approval, including email, teleconference and other electronic means.

According to ASIC, a constitution is a contract between:

  • The company and each member
  • The company and each director
  • The company and the company secretary
  • A member and each other member

constitution is a document that outlines the rules governing the relationship between and activities of the company, its directors and shareholders. This document generally provides guidance as to how meetings are run (both board meetings and members meetings), as well as a host of other procedural governance items. A company may adopt a constitution either on or after registration.

Yes. The Corporations Act 2001 does not restrict share ownership to Australians. However, foreign shareholders should consider Australian laws in relation to foreign residents owning shares in Australian companies, as well as the tax and other laws in their country of residence.

A Public Officer is a company’s representative to the Australian Taxation Office (ATO) and is responsible for the company’s obligations under Section 252 of the Income Tax Assessment Act 1936.

The Public Officer of a company is the person who the ATO normally deals with in relation to the entity’s tax affairs, for example, record keeping and submitting company returns.

A Public Officer must be an individual who meets all of the following criteria:

  • Is 18 years old or over
  • Ordinarily resides in Australia
  • Understands the nature of the appointment

More information can be obtained from the ATO website.

CoSec can appoint experienced Australian-based Public Officers to fulfil your compliance, legislative and regulatory requirements. See our Resident Director & Company Officer Services for more information on CoSec’s solution for your international expansion.

No. The Public Officer must ordinarily reside in Australia.

Generally, the board will pass a resolution to appoint the Public Officer. The Public Officer, like a director, needs to sign a form consenting to the appointment. This form is maintained in the company’s Corporate Register. Once consent has been obtained, the ATO must be informed of the appointment in writing.

corporate key is a number generated by ASIC which is unique to your company’s ACN. Generally, corporate key details are received from ASIC within a week after registration. This should be considered highly confidential – it is like a PIN for your company information. It should not be displayed publicly and only one corporate key will be assigned to your company.

Yes. All businesses that are trading or intend to trade will need a tax file number (TFN).

A TFN is obtained at the same time as an Australian Business Number (ABN), using the same application form. This can be done through the Australian Business Register.

Upon registration of your company, it will be issued with a unique, nine-digit number. This is an Australian Company Number (ACN) and must be displayed on all company documents. More information can be obtained on the ASIC website.

An Australian Registered Body Number (ARBN) is a unique, nine-digit number allocated by ASIC when a body is registered with them other than as a company. Foreign companies wishing to register with ASIC will receive an ARBN instead of an ACN (Australian Company Number).

A body that has been issued with an ARBN can apply for an ABN.

For more information, see our FAQs above on Registered Foreign Companies – Setting up in Australia.

An ABN is a unique number used to identify business names and companies, and for various tax and other business purposes. Issued by the Australian Business Register an ABN is generally comprised of your ACN with a two-digit prefix.

With an ABN you can:

  • Confirm your business identity to others when ordering and invoicing
  • Avoid Pay As You Go (PAYG) tax on payments you receive
  • Claim Goods and Services Tax (GST) credits
  • Claim energy grants credits
  • Obtain an Australian domain name

ABNs are issued by the Australian Business Register.

When applying for an ABN, directors who are Australian residents must provide their personal tax file number (TFN) for identification purposes.

Non-resident directors must provide certified copies of identification documents. Non-resident shareholders must also provide certified copies of their identification documents (for individuals), or a certified copy of their certificate of incorporation if the shareholder is a corporation.

This process can take several weeks, so being proactive with these documents is essential if time is an issue. These documents are often required for other purposes, such as opening an Australian bank account.

Fringe Benefits Tax (FBT) can apply where a benefit is provided to an employee (in respect of their employment). This could take many forms, including provision of a motor vehicle, payment of school fees, provision of car parks and gym memberships etc.

FBT is paid by the company and is equivalent to the highest marginal tax rate for individuals. More information regarding FBT can be found on the ATO website.

A company will be governed by:

  1. The replaceable rules
  2. A constitution
  3. Or a combination of both

The following companies must be governed by a constitution:

  • ‘No Liability’ public companies
  • Special purpose companies

If a company does not adopt a constitution on incorporation, it will be subject to the Replaceable Rules. These are basic rules that appear in the Corporations Act.

If a company doesn’t adopt a constitution, it can use the Replaceable Rules instead. Replaceable Rules appear in the Corporations Act and provide basic rules for governing a company.

Replaceable Rules do not apply where a company’s sole director and sole shareholder is the same person.

A detailed article showing the interaction between the constitution and the replaceable rules appears on the ASIC website.

There is no minimum number of shares that needs to be issued in a company. Consideration should be given to matters including:

  • Whether the company intends to raise further capital and at what price
  • How many shareholders there are
  • How much share capital will be paid into the company on incorporation. For example, if you issue 1,000,000 shares at $1 on incorporation, the company would expect to be receiving a capital injection of $1,000,000.
When consenting to be a director of a company, you will need to provide:
  • Given name and surname
  • Any former names (e.g. maiden name)
  • Date of birth
  • Place of birth
  • Residential address
For more information on the obligations and responsibilities of being a Resident Director, see our Your Responsibilities as Director Fact Sheet.

Please see our Company Incorporation Fact Sheet for more information about reporting requirements in Australia.

All Australian companies need a Registered Office. This is the official address of the company where correspondence is sent from the Australian Securities & Investments Commission (ASIC), the Australian Taxation Office (ATO), and other regulatory bodies. It is also used for legal service of documents. The Registered Office address does not have to be the same as the address where the company conducts business – it is often located at the offices of lawyers, accountants, or CoSec.

See our Registered and Virtual Office Services for more information on CoSec’s solution to meet these requirements.

The principal place of business address is the operating or trading location of the busines. This can be the same as, or separate from, the Registered Office address. It is usually where the company is trading or operating, and where the correspondence to and from suppliers and customers is regularly sent.

CoSec brings together a full suite of incorporation, hosting and compliance services under the one roof. We tick all the boxes in managing your Australian corporate and financial compliance, so you can focus on expanding your business in this lucrative market. See our services for more information on how CoSec can support your international expansion.

Our Fact Sheets also provide detailed information on corporate compliance and conducting business in Australia.

Managing your Australian Company – What you need to know

According to the Corporations Act 2001, all companies in Australia, both public (ending with “Ltd” or “Limited”) or private (ending in “Pty Ltd”) require one or more directors who “ordinarily reside” in Australia.

Private Companies require a minimum of one director, including at least one who must be a Resident Director (s201A(1)). There is no requirement for a Company Secretary in a private company, though if one has been appointed, they must also be a resident of Australia (s204A(1)).

Public Companies require a minimum of three directors, two of whom must ordinarily reside in Australia (s201A(2)).  Public companies are also required to appoint at least one Company Secretary who must reside in Australia (s204A(2)).

For more information on the obligations and responsibilities of being a Resident Director, see our Your Responsibilities as Director Fact Sheet

If a company does not have the requisite number of Resident Directors, it will be in breach of the Corporations Act 2001. This could result in the company paying penalties or being prosecuted for not meeting its statutory obligations.

“Ordinarily resides” is not a concept defined by the Corporations Act 2001 and the Australian Securities & Investments Commission (ASIC) has not provided guidance on what constitutes a resident of Australia. It is up to the individual to determine whether they “ordinarily reside” in Australia, taking into account all circumstances, including their tax residency, citizenship or right of residence, domicile, home address, etc.

In addition to the Resident Director requirements, both public and private companies require a Registered Office address in Australia (s142) where Australia’s corporate regulator, ASIC, can send important company documents. This is also usually where the company’s Corporate Register, a file containing certain documents required by the Corporations Act 2001, resides. The Registered Office address can be a different address to the principal place of business address.

CoSec brings together a full suite of incorporation, hosting and compliance services under the one roof. CoSec can appoint an experienced and Australian-based Resident Director to expertly manage your compliance, legislative and regulatory requirements. See our Resident Director & Company Officer Services for more information on CoSec’s solution for your international expansion.

Our Fact Sheets also provide detailed information on corporate compliance and doing business in Australia.

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