International companies in Australia: how-tos, obligations, nominee director and more
- Nov 08, 2022
- 13 min read
Overview
- Where should I start to register my company in Australia?
- What type of business structure is right for you?
- Australian subsidiary
- Decide your business address
- What will be your share structure?
- What documents do I need to start a company in Australia?
- Registering for GST and other taxes
- Open an Australian bank account
- Are you ready to register your company in Australia?
- Ready, set, go, to register your company in Australia with Sleek.
Australia (and Sleek) wants your business!
We are a prosperous nation with a beautiful sunny temperate climate, a mixed market economy, easy access to Asia-Pacific, an innovative business environment and a well-educated workforce – there’s an abundance of opportunity waiting for your business.
The Australian government spends money and time enticing international companies to set up in Australia too! These incentives range from taxable grants and tax relief to the provision of infrastructure services at discount rates.
We even have a government department, Austrade to help promote and encourage foreign investment in Australia!
If your company goals include an Australian presence, let’s jump in and find out how easy it is to set up a business in Australia.
Where should I start to register my company in Australia?
Check your business name is available
First things first.
You need to check if your company or business name is available in Australia.
Your Australian company name cannot be the same as an existing company or business name registered anywhere in Australia.
To help you check your company name, use Sleek’s company name checker to see if it is available.
Simply enter in your preferred company name and it will display if it is available, or if somebody else is already using it.
If it is taken, no stress, we can look for any closely related company names to help you find an alternative.
Our blog How to choose a business name. The dos and don’ts – will help you choose a new business name, as there are a few rules you need to follow.
What type of business structure is right for you?
The next step is to choose the business structure.
The common business structure for international companies setting up in Australia is either a foreign branch of a foreign company or a wholly owned subsidiary of a foreign company.
Let’s go through each entity to help you decide which is right for you:
Australian foreign branch
A foreign branch operates as the Australian branch of your overseas business.
Your business is allowed to trade in Australia, but it is not a separate legal entity.
Setting up a branch:
You will need to provide extensive paperwork to ASIC.
The tax treatment will depend on whether ASIC determines your operations as a Permanent Establishment (PE). These factors depend on:
- the fixed place of business
- your business’ plant and equipment in Australia
- how long your staff are spending in Australia
- the delegates closing the Australian contracts
- if you are completing construction projects
Australian subsidiary and nominee director
When an overseas business establishes a new company in Australia, it becomes a subsidiary of the foreign company.
The foreign company owns and holds shares in the Australian subsidiary company. It is recognised as a separate legal entity (Pty Limited) so if there are any legal or compliance issues, or other problems with the shareholders, it falls on the Australian subsidiary and not on the parent company.
The subsidiary is required to register with the Australian Securities and Investments Commission (ASIC) and pay taxes.
An Australian subsidiary is the most common business structure for companies looking to set up in the long term and develop business relationships.
It allows your business to:
- engage in trading activities
- hire a local workforce
- produce goods in Australia to export overseas
There are quite a lot of differences between these two entities so it may help to read our blog What’s the difference between a subsidiary and branch to find out more.
How will your company operate?
If you choose a Company for your business structure, before Company registration, you will need to choose the rules which your Company will follow as it conducts its business. It will include rules about how shareholders vote for decisions, or how it will issue new shares.
This can be a bit hard to grasp but stay with us here.
You have a choice between:
- Replaceable rules – where your company follows the replaceable rules set in the Corporations Act. You do not need a written constitution nor the expense of keeping it up to date as the law changes.
- Its own constitution – your company can write its own constitution, and have this filed with your company records. Services like Sleek can provide you with a robust Constitution drafted by external lawyers.
- A combination of the above two
It’s easy if it’s just you (or one person) as the sole director or member of your proprietary company. Your company does not need to follow either of these rules of operation. If this changes, then the replaceable rules automatically apply, until such time, you create your own constitution.
- Choose your officeholders and get consent – This is a toughie, so we’ll make it as simple as possible. Officeholders include Directors of your company, and potentially a company secretary/public officer.
- Resident/Nominee Director – Foreign companies when setting up in Australia are required to appoint one resident director if they are a Pty Ltd company or two resident directors if they are a public company.
A resident director, must be 18 years of age, must ‘ordinarily’ reside in Australia and consent to taking on the role and responsibilities of a director.
If your new Australian business is unable to meet the criteria, you can appoint a registered agent like Sleek (ASIC Registered Agent No. 47659) to look after your company’s matters and ensure compliance. As an agent, Sleek does not participate in the management or financial affairs of your business.
These services are called resident director services or nominee director services.
In 2021, ASIC started requiring Company directors to obtain their own unique Director Identification Number (DIN).
- Public officer – Each company must also appoint a public officer who is responsible for complying with tax obligations and dealing with Australian tax authorities.
- Company Secretary – The company secretary is typically responsible for ensuring the administration of the rules of the company are in order such as keeping accurate records, taking minutes at board meetings, and notifying ASIC of any changes of directors or shareholders.
Appointing a company secretary is not mandatory. However, if a company secretary is not appointed, each director of the company becomes liable for a breach of the responsibilities of a secretary.
A company secretary must be over 18 years of age and ‘ordinarily’ reside in Australia.
Once you have decided your officeholder/s, you will need to get written consent from them and these will need to be filed with your company records.
Every officeholder’s duty is to follow the Corporations Act by keeping company details up to date, ensuring company records and details are registered with ASIC, and annual reviews are lodged and paid.
Decide your business address
Next, your business will need to provide two physical addresses (yes, 2!) and unfortunately, a PO Box won’t be accepted.
1. A principal place of business
The first address you will need to supply is where your company will mainly conduct its business from. It can be in any state or territory, even if this is a different address from your registered business address.
2. A registered office address
The second address you will need to supply is where all your business communications and official company notices will be sent.
It can be the same as your business address (above), or you can use your accountant’s or lawyer’s address. You will need to get written consent if using your accountant or lawyer and have these on hand.
Great news! Sleek offers a registered address and mailroom service – nothing to worry about here if you don’t have Australian premises set up yet.
What will be your share structure?
Put simply, the share structure determines who owns your company.
The easiest share structure for your company is to issue one share to one shareholder.
Shareholders can be members of the company or its employees or subsidiaries of the company.
You will have three considerations with the share structure to make:
- Class of shares – a share class will give the owner the right to a dividend or the right to vote. Most companies use ‘Ordinary Shares’ which come with no special rights.
- Total number of shares – this is usually determined by the amount of capital a company requires. A company’s capital represents the total number of shares in each class, issued by the company.
- Shares paid and unpaid – each shareholder (or member) may pay the full amount for each share or only a portion. These payments must be recorded in the share structure.
Your company is limited by its shares or it can be an unlimited company that has share capital.
What documents do I need to start a company in Australia?
Your directors and shareholders with over 25% shareholdings will be required to provide their personal Australian Tax File Number (TFN).
If they do not have a TFN they will need to provide notarised and preferably Apostille-stamped copies of physical identity documents (such as passports, birth certificates, drivers licenses).
Registering your company
That’s the decision-making part of international business incorporation over and done with.
Nice one!
You’re ready to register your company with the Australian Securities and Investments Commission (ASIC). You will be required to pay a registration fee.
You can register your company using Sleek.
We’ll get together everything you need to make it quick and easy to register your company on your behalf.
If everything is in order it takes three business days to complete your company registration. After which you will receive your company’s ACN (Australian Company Number) and a certificate of registration.
Your ACN is a nine-digit unique identifier of your business so others can search information on your Australian company.
It lists the names of directors and shareholders, how much share capital and the place of business.
Your ACN should appear on all of its public documents.
Is there anything else to do to set up your business in Australia?
You’re almost ready to start your business in Australia. There may be a few more things you need to set up.
Registering for GST and other taxes
Australian subsidiaries must ensure they comply with a broad range of tax obligations.
Firstly, you must register for an Australian Business Number (using your ACN) through the Australian Business Register. This is free.
You need an ABN to register for:
- Goods and Services Tax (GST) – if you sell goods and services, most companies do not need to register until income is over $75k. GST Blog
- Pay As You Go (PAYG) – if you pay wages or salaries PAYG blog
- Payroll tax – a state tax if your total Australian wages exceed the tax-free threshold in each state/territory.
- Fringe Benefits Tax (FBT) – if you provide perks and benefits to employees such as entertainment, parking, cars.
Open an Australian bank account
This is a legal requirement when setting up an Australian subsidiary.
You’re in good hands in Australia! We have a regulated and competitive banking system so there are many banks, credit unions and financial institutions you can choose from.
You will need some paperwork when opening a new bank account:
- Identification of the company director/s and shareholders with more than 25% shareholding.
- Your ASIC business certification or registration, your ACN or ABN with a business address.
- Additional company information may be required such as company constitution, share certificates and appointed company directors. But we’ll let you know what you will need.
If you have appointed a nominee director, such as Sleek, we will be able to open the bank account on your behalf.
Are you ready to register your company in Australia?
Don’t go it alone. Use Sleek!
Sleek is a global firm that helps international businesses set up locally in Australia.
We are part of the Sleek Tech Group, founded in 2017, with offices in Sydney, Singapore, Hong Kong, and the United Kingdom. We have over 340 employees in 17 different countries.
Sleek leverages its proprietary technology to serve 450,000+ customers globally!
Ready, set, go, to register your company in Australia with Sleek.
Rest assured Sleek are registered Tax Practitioners Board Agent (TPB No. 26131380) and ASIC Registered Agent (No. 47659).
