Eight key points to keep in mind when setting up a new entity in Australia

  • This article outlines the key matters which foreign companies need to consider when establishing a presence in Australia. 
  • Directors’ compliance program should be implemented to ensure that accounting and financial management compliance matters are adequately addressed. 
  • Foreign companies with subsidiaries in Australia need to understand the implications of immigration laws in Australia on their Australian business plans.

Sunrise over the edge of the globe

The process of setting up an Australian subsidiary or a new entity in Australia can be stressful and confusing for many foreign investors. We have listed below eight key points to consider when establishing a new entity in Australia.

1. Company registration

Foreign companies may carry on business in Australia through an Australian branch (by registering the foreign company through the Australian Securities & Investments Commission (ASIC)) or subsidiary (by registering a new company through ASIC). The procedure to register an Australian branch of a foreign company is slightly more onerous than setting up a new subsidiary company in Australia, and in practice most foreign companies elect to establish a new company in Australia as a subsidiary. This article focuses at a high level on the key considerations facing Australian subsidiaries of foreign companies.

The procedure for setting up a limited liability company, either a proprietary or non-listed public company, is straight forward, with the relevant forms required to be lodged with the ASIC.

Australian companies must have a registered office to receive ASIC correspondence and to liaise with ASIC. Also, there needs to be (at least) one director and a secretary who ordinarily resides in Australia (a secretary is mandatory for a public company and usual, but not compulsory, for a proprietary company).

This article is exclusive to Governance Institute members and subscribers.

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