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Incorporation

Setting up a company in Australia

When setting up a company you may want to consider these factors:

  1. Business factors

    Some examples would be:

    • The industry and type of business
    • Nationality of the headquarters/individual(s) and
    • Presence of existing trade agreements or relationships
  2. Regional factors

    Separate states and territories are still relatively self-governed bodies, so each may have different rules, costs and availability for certain matters. It is always recommended to seek advice from relevant professionals, such as business or legal advisors, accountants and others depending on your needs.

  3. ASIC Price changes

    The Australian Securities and Investment Commission (ASIC) prices will increase on 1 July 2015. As the guide has been written only a month before this, we have pre-emptively used the new prices. However if you read this guide before 1 July 2015, keep in mind current and older sources you find online may show different, older prices.

  4. State investment incentives

    The states in Australia are able to actively compete against each other to attract new foreign investment. This means that incentives such as grants, loans, tax reductions, and the like may vary from state to state, and thus can be a factor when identifying a suitable location in Australia.

Your Options

This article provides a general guideline for foreign businesses on entering Australia for business purposes. In particular it looks at common pathways to establishing a business presence in Australia, generally through a representative office, branch office or subsidiary company (or local equivalents). In addition various economic, tax and regulatory facts are provided throughout as a source of useful information to assist those who will enter the Australian economy. The guide also looks at some immigration requirements such as obtaining the appropriate visa status.

Data is based on the time of writing this article, June 2015, or closest available dates.

Australia is a continent and nation located in the Oceanic region. It operates under a constitutional monarchy (due to its British colonial and penal heritage) and comprises six states and several territories. Australia is the world’s 12th-largest economy boasting a high standard of living and minimum income. The country’s legal system is a common law system, and while it has naturally diverged from the UK over the last few centuries, the underlying principles of common law are reflected in Australia.

Population: 22,000,000

Currency: Australian Dollar (AUD) Approx. 0.77 USD (June 2015)

National Language: English

Federal Capital: Canberra (Australian Capital Territory)

Time zone: UTC+8 – +10.5 (daylight savings: UTC+8 – +11.5)

Currency: Australian Dollar (AUD) | USD$ = approximately 1.35 AUD

Calling code: +61

Nominal GDP: $1.252 trillion ($52,454 per capita)

Domain: .au

States are self-governing and separate jurisdictions to a degree, but federal laws passed by the Parliament apply to the whole of Australia. Perhaps due to the smaller number of regions (compared to say, the U.S.), many of Australia’s major laws are unified, such as tax, trade and employment laws. This was done with the aim of simplifying cross-border trade and in principle, should make facilitate both local and foreign business activities. For example, registration of a company, business name and trademark in any state or territory will apply across all other states and territories. Registering companies and businesses is relatively straightforward in Australia, and the World Bank Doing Business project has assigned Australia the rank of number 10 in the world.

There are three types of business forms available to foreign companies in Australia.  Each of these business forms has distinct advantages and disadvantages, as well as differing scope of business activities, registration requirements and payroll rules.  In most cases it will depend on the degree of commitment a company has to Australia and the planned business activity.

In Australia the three typical forms of corporation:

  • Company (proprietary or public)
  • Branch office
  • Representative office

Proprietary Company (Subsidiary)

A subsidiary company can be established through incorporation of a new company (although acquiring an existing company or ‘shelf company’ is a common pathway also).

According to the PwC Guide to Business in Australia, a subsidiary may not have more than 50 non-employee shareholders and must have the words “Proprietary Limited” or “Pty Ltd” in its name if it is a limited proprietary (private) company.

The report “Investing in Asia Pacific 2015: Australia“ by Tax advisory Crowe Horwath reports there is no limit on the percentage of foreign ownership. However, the company must also have a registered office in Australia (a postal address alone will not satisfy the requirement), a secretary and at least one Australian resident as a director.

According to the PwC Guide to Business in Australia, upon winding up of the company, liability of shareholders is limited to any amount unpaid on their shares (if any).

The Practical Law guide states there are no minimum share capital requirements for company formation, as long as something is invested, i.e. a share capital of AUD$1 is enough for company registration. In regards to financial reporting, a company only needs to lodge the accounts for the local subsidiary with the Australian Securities and Investments Commission (ASIC), and doesn’t need to share any of the parent company’s financial reports.

Advantage / Disadvantages

A company is a separate legal entity from the directors and any overseas parent company, as well as providing limited liability to its shareholders.

According to ASIC, a company can conduct business throughout Australia without needing to register in individual states and territories.

The tax guide site Lowtax.net writes that since both subsidiaries and branch offices are subject to the standard corporate tax rate, the subsidiary is a preferred choice as it has the added benefits of limited liability and separate legal status from its parent.

However, being a more formal structure, the bookkeeping and financial obligations are much more complex for companies. Franked dividends from an Australian subsidiary are also not subject to withholding tax when paid to the foreign parent company.

Registration Steps

1. Choose a Company Name

When registering a company (as detailed in the next step), a company name can be nominated. A company name is optional – if no company name is to be used, the ACN will be used in place of the name.

However, if you do wish to nominate a company name, it must meet certain requirements. In particular, it is considered your responsibility to ensure the name will not cause any conflicts. Even if ASIC accepts a proposed company name, any company with a similar registered name may take action against you if they feel your name is too similar or could mislead consumers. Therefore, if wishing to use a company name, it is recommended to follow this step prior to registration.

ASIC provides a few tips when considering company names:

  • Naturally, it must be a name that is not already registered to another company or business. You can use Check Name Availability to confirm whether the name is available.
  • In Australia, a company name or business name is not automatically considered a trademark, therefore it is additionally recommended to check if your proposed company name is similar or identical to any registered or pending trademarks. You can check the IP Australia website to find out.
  • A proprietary company must include the word ‘Proprietary’ or the abbreviation ‘Pty’ in its name and must also indicate the liability of its members.
  • You also cannot use words suggesting a misleading connection with government, the Royal Family or names considered offensive or suggesting illegal activity. These restrictions are to make sure a company’s name does not mislead people about its activities.

Time: Instant (online)

Cost: No charge

2. Appoint a Representative

While there is no limitation on foreign ownership, at least one director must be a resident. Therefore if no local director is already nominated, it may be necessary to ‘appoint’ a local representative. Generally the director must be authorized as a representative that can accept legal notices served on the company.

While not a formal registration, a valid person must be agreed upon by the company and the representative’s details will be included in company application.

Time: N/A

Cost: N/A

3. Submit Company Registration Form

You can register an Australian company through a number of business service providers who use software that deals directly with ASIC. Alternatively, if you wish to register directly through ASIC, you can submit Form 201 “Application for Registration as an Australian Company”. The form can be obtained online at http://www.asic.gov.au/regulatory-resources/forms/forms-folder/201-application-for-registration-as-an-australian-company/

The form cannot be submitted online and must be mailed with the application fee to:

Australian Securities and Investments Commission, PO Box 4000, Gippsland Mail Centre, VIC 3841.

When the application is successfully processed, ASIC will register the company, and within two days of this registration ASIC will assign an ACN and issue a Certificate of Registration.

According to ASIC, the ACN is the ‘corporate key’ which can be used to view company records, lodge forms and receive annual statements online. It must also be included on public documents like advertisements, orders and invoices, and included on any official forms lodged to ASIC when changing or updating company details.

Time: 3-4 days

Cost: AUD $457

4.  Apply for an Tax File Number (TFN) and Australian Business Number (ABN)

A company will need a Tax File Number (TFN). You can apply for a business TFN when you register for an ABN.

Once you have an ACN you can also apply for an Australian Business Number (ABN), similar to the ACN it is a unique identifying number which can be used when dealing with official paperwork.  According to comparative site DifferenceBetween.net the ABN is usually 11 digits long, and for companies an ABN generally contains the company’s 9-digit ACN within its 11 digits. So long as the ABN contains the ACN it can be used for official paperwork in place of the ABN.

While the TFN is clearly required, the need (or any benefit) to having both an ACN and ABN may not be obvious – both have the same purpose of ‘streamlining communication with government agencies’ and seem to serve essentially the same function. However, if a company wishes to register one or more business names for trading or branding purposes, or register for the GST, an ABN will be required (business names are optional, but note that any company or business with an annual turnover of AUD$75,000 or more must register for GST and thus by extension, an ABN).

According to the Australian Business Register (ABR), the Australian Taxation Office (ATO) is the authority responsible for assigning ABNs for companies and businesses in Australia. You will need to provide your company documents, and details such as the place of business, the authorized contact (e.g. resident director) and a written declaration stating that the information provided is true and correct.

The application can be done online at the Australian Business Register: https://abr.gov.au/ABRWeb/AbnApply.abr?pid=71.

It can also be done via the Australian Tax Office, by posting a Form NAT 2938 – ABN registration for individuals/sole traders or Form NAT 2939 – ABN registration for companies, partnerships, trusts and other organizations). The form can be ordered from the ATO at: https://www.ato.gov.au/General/Gen/Order-ATO-products-online/

Note: the ABR states that when you register for a TFN/ABN online you can also register for the GST and a business name at the same time.

Time: Instant (online)

Cost: No charge

5.  Register a business name (optional)

In addition to a company name, a company may choose to register one or more “business names”. ASIC describes a business name as a trading name that can be used if a company wants to carry on a business using its name without the legal terms, or if it wants to use a different name for branding purposes, etc. Note if a company wishes to register business names, it must first acquire an ABN (as discussed above). Multiple business names can be attached to a single ABN.

Business names can be registered through a service provider, or can be directly registered via the Australian Business Register. You will need to provide the ABN, and details of the proposed ‘business’ such as business address and name of the business holder (which can be the company or an individual).

The name can be registered online through ASIC at https://asicconnect.asic.gov.au/login/login.html

Time: Instant (online)

Cost: AUD $34 for one year (AUD $78 for three years)

6.  Register for GST with the Australian Taxation Office (ATO)

It is not necessary for an entity that has an ABN to be registered for GST if their annual turnover or income does not exceed $75,000.00.

Time: Instant (online)

Cost: No charge

7. Register any business names as trade marks (optional)

Registering a trading or business name allows you to carry on business under the name, but doesn’t give you any exclusive trading, branding or ownership rights over that name. As stated by IP Australia, registering a business or company name does not automatically have the right to use that name as a trade mark. Registering a business name or company name that is similar or has potential to be confused with a protected trade mark could cause legal issues. Hence it is recommended to check the availability of planned company/business names from the start against both existing business names and trademarks (as detailed in the first step).

For that level of protection of a trademark, the company/business name may additionally be registered as a trademark. Although the specifics of Australian trade mark law is outside the scope of this guide, the basic procedure is to register online through IP Australia’s eServices system at https://services.ipaustralia.gov.au/ICMWebUI/

Time: 3-4 months

Cost: starting from AUD $120

8.  Establish an Office

In Australia, renting ‘virtual offices’ is generally not sufficient to meet legal requirements of establishing a company, and a real physical office location will be required. Commercial premises can be leased through any number of private agencies or landlords.

The Australian Tax Office notes that if you rent a commercial property as your business premises, the rent is tax deductible and you may be able to claim GST credits for the GST included in the rent if the company is registered for GST.

Time: depends on agent (estimate: 1-2 weeks for paperwork)

Cost: varies

9.  Open a Commercial Bank Account

If you’re operating a partnership, company or a trust, you must have a separate bank account for the company for tax purposes.

Opening a business account is generally straightforward in Australia, and doesn’t have particular restrictions or requirements. Most of the major banks offer a quick and easy online registration process, or simply going to a bank in person, where an account can usually be opened on the same day.

Time: Generally instant (online)

Cost: Generally no charge (may require minimum initial deposit)

10.  Register for Payroll Tax

Companies employing people must register with the local revenue office when their Australia-wide wages exceed the threshold applicable in that state or territory. The Payroll Tax is a tax based on total wages per month, and is controlled at the state level, collected in each state or territory that staff are located in. Companies are only liable for payroll tax if the total wages exceed an exemption threshold per each state. The state bodies and applicable thresholds (as of June 2015) are listed on the government payroll website:

It is unfortunately difficult to give any specific guidelines on the process, price and timeframes of registering for Payroll Tax since, as Safe Work Australia reports, it can vary greatly between states.

Time: 1 week-2 weeks (rough estimation)

Cost: depends upon state

11.  Signup for Workers Compensation

If employing people, the company is obligated to maintain a current accident and sickness insurance, generally referred to as “Workers’ Compensation Insurance”. Law firm Henry Carus Associates states that although there is a federal agency overseeing the standards and laws are, for the most part, unified across all states, the actual operation of Workers’ Compensation is on a state level, each with its own rules and systems. Companies can register as an employer with the appropriate local state authority, usually named “WorkCover” or “WorkSafe”:

  • Australian Capital Territory – Work Safe Act
  • New South Wales – Work Cover NSW
  • Northern Territory – NT Work Safe
  • Queensland – The Workers’ Compensation Regulator (formerly Q-COMP)
  • South Australia – ReturnToWork SA (from 1st July 2015)
  • Tasmania – WorkCover Tasmania
  • Victoria – WorkSafe Victoria
  • Western Australia – WorkCover WA

It is unfortunately difficult to give specific guidelines on the process, price and timeframes of registering for Workers’ Compensation as an employer. However, generally, application can be done online or via post, but the specific application process and cost depends on the provider. As Safe Work Australia reports, in some states, the actual insurance is covered by a private insurance company that the company must engage, and only overseen by the Worker’s Compensation body, while sometimes it is covered directly. Generally costs are largely based on an employer’s health and safety performance, and the safety ranking of the industry, for example as reported by the Victoria Worksafe guide.

Time: 1 week (varies greatly depending upon insurer, business type, etc)

Cost: varies greatly depending upon state, insurer, business type, etc

Branch Office

If not wishing to incorporate an Australian Company, a foreign company “carrying on business” in Australia must still register. The process is similar to establishing an Australian company. Once registered, the foreign company may sue and be sued or may hold property in the name of its secretary or other officer.

According to the PwC Guide to Business, if a foreign company chooses to establish a branch office in Australia, it must be registered as a foreign company under the Corporations Act. Law firm Henry Carus Associates states that there is no limit on foreign ownership for branches. However, a registered office needs to be established in Australia and a local agent must also be appointed.

The Practical Law guide states that for regular financial reporting, a company needs to lodge the accounts for the local branch office to the Australian Securities and Investments Commission (ASIC), and also the parent company’s financial reports.

Advantage / Disadvantage

According to the PwC Guide to Business in Australia the establishment of an Australian branch may be preferable to incorporating a subsidiary if one of the objectives is to consolidate the financial results of the company in the place of residence of the overseas company.

According to ASIC, a company can conduct business throughout Australia without needing to register in individual states and territories.

However, the tax guide site Lowtax.net writes that since both subsidiaries and branch offices are subject to the standard corporate tax rate, the subsidiary may be preferable as it has the added benefit separate legal status from its parent.

Registration Steps

1. Check availability of company name

When registering the company (detailed in the next step), a company name can be nominated. A company name is optional – if no company name is to be used, the ACN will be used in place of the name.

However, if you do wish to nominate a company name, it must meet certain requirements. In particular, it is considered your responsibility to ensure the name will not cause any conflicts. Even if ASIC accepts a proposed company name, any company with a similar registered name may take action against you if they feel your name is too similar or could mislead consumers. Therefore if wishing to use a company name, it is recommended to follow this step prior to registration.

ASIC provides a few tips when considering company names:

  • Naturally, it must be a name that is not already registered to another company or business. You can use Check Name Availability to tell you whether your name is identical or similar to an Australian name already registered.
  • In Australia, a company name or business name is not automatically considered a trademark, therefore it is additionally recommended to check if your proposed company name is similar or identical to any registered or pending trademarks. You can check the IP Australia website to find out.
  • A proprietary company must include the word ‘Proprietary’ or the abbreviation ‘Pty’ in its name and must also indicate the liability of its members.
  • You also cannot use words suggesting a misleading connection with government, the Royal Family or an ex-servicemen’s organisation We may also refuse to register certain names if they are considered offensive or suggest illegal activity. These restrictions make sure that a company’s name does not mislead people about its activities.

Time: Instant (online)

Cost: No charge

2.  Appoint a Representative

While there is no limitation on foreign ownership, at least one director must be a resident. Therefore if no local director is already nominated, it may be necessary to ‘appoint’ a local representative. Generally the director must be authorized as a representative that can accept legal notices served on the company.

While not a formal registration, a valid person must agreed upon by the company and the representative’s details will be included in company application.

Time: N/A

Cost: N/A

3.  Lodge Foreign Company forms and Register the company

To register a foreign company, you must complete Form 402 Application for registration as a foreign company. The form asks for general details about the corporation and must be completed in full. In addition, the following documents must be submitted, and if they are not in English then a certified translation is required:

  • Current certificate of registration or a document of similar effect that confirms that the company is currently registered
  • Certified copy of the company’s constitution certified by official body or notary dated no more than 3 months before we receive it.*
  • If the foreign company is not bound by a written constitution and/or is bound by some other means of governance, provide a statement in writing to   that effect and include a description of the legislation that governs the   administration of the company. The statement must be certified in accordance with the requirements for certification as described above.
  • A copy of the document authorizing the third party to appoint the local agent. Verify the authorizing document with a Form 403 – Verification of copy of document authorising on behalf of a foreign company, execution of a document appointing a local agent.
  • Memorandum stating the powers of certain directors

The application and supporting documents, can be mailed to

Australian Securities and Investments Commission, PO Box 4000, Gippsland Mail Centre VIC 3841

ASIC will issue a unique identifying number known as the Australian Registered Body Number (ARBN) and a Certificate of Registration. For the most part this can be used for the same function as an Australian Company Number (ACN).

Time: unspecified

Cost: AUD $463

4.  Apply for an Tax File Number (TFN) and Australian Business Number (ABN)

A foreign company carrying on business in Australia will need a Tax File Number (TFN). According to the Australian Business Register, once you have an ARBN you can also apply for an Australian Business Number (ABN), similar to the ARBN it is a unique identifying number which can be used when dealing with official paperwork.

While the TFN is clearly required, the need (or any benefit) to having both an ARBN and ABN may not be obvious – both have the same purpose of ‘streamlining communication with government agencies’ and seem to serve essentially the same function. However, if a company wishes to register one or more business names for trading or branding purposes, or register for the GST, an ABN will be required (business names are optional, but note that any company or business with an annual turnover of AUD$75,000 or more must register for GST and thus by extension, an ABN).

The Australian Taxation Office (ATO) is the authority responsible for assigning ABNs for companies and businesses in Australia. According to the ABR you will need to provide your company documents, and details such as the place of business, the authorized contact (e.g. resident director) and a written declaration stating that the information provided is true and correct.

The application can be done online at the Australian Business Register: https://abr.gov.au/ABRWeb/AbnApply.abr?pid=71 or the appropriate form can be found online at: https://abr.gov.au/For-Business,-Super-funds—Charities/Applying-for-an-ABN/

It can also be done via the Australian Tax Office, by posting a Form NAT 2938 – ABN registration for individuals/sole traders or Form NAT 2939 – ABN registration for companies, partnerships, trusts and other organizations). The form can be ordered from the ATO at: https://www.ato.gov.au/General/Gen/Order-ATO-products-online/

Note: the ABR states that when you register for a TFN/ABN online you can also register for the GST and a business name at the same time.

Time: Instant (online)

Cost: No charge

5.  Register a business name (optional)

In addition to a company name, a company may choose to register one or more “business names”. ASIC describes a business name as a trading name used if a company wants to carry on a business using its name without the legal terms, or if it wants to use a different name for branding purposes, etc.

Note: if a company wishes to register business names, it must first acquire an ABN (as discussed above). Multiple business names can be attached to a single ABN.

Business names can be registered through a service provider, or can be directly registered via the Australian Business Register. You will need to provide the ABN, and details of the proposed ‘business’ such as business address and name of the business holder (which can be the company or an individual).

The name can be registered online through ASIC at https://asicconnect.asic.gov.au/login/login.html

Time: Instant (online)

Cost: AUD $34 for one year (AUD $78 for three years)

6.  Register for GST with the Australian Taxation Office (ATO)

It is not necessary for an entity that has an ABN to be registered for GST if their annual turnover or income does not exceed $75,000.00.

Time: Instant (online)

Cost: No charge

7.  Register any business names as trade marks (optional)

According to IP Australia, registering a trading or business name allows you to carry on business under the name, but doesn’t give you any exclusive trading, branding or ownership rights over that name. Registering a business or company name does not automatically have the right to use that name as a trademark. Registering a business name or company name that is similar or has potential to be confused with a protected trade mark could cause legal issues. Hence it is recommended to check the availability of planned company/business names from the start against both existing business names and trademarks (as detailed in the first step).

For that level of protection of a trademark, the company/business name may additionally be registered as a trademark. Although the specifics of Australian trade mark law is outside the scope of this guide, the basic procedure is to register online through IP Australia’s eServices system at https://services.ipaustralia.gov.au/ICMWebUI/

Time: 3-4 months

Cost: starting from AUD $120

8.  Establish an Office

In Australia, renting ‘virtual offices’ is generally not sufficient to meet legal requirements of establishing a company, and a real physical office location will be required. Commercial premises can be leased through any number of private agencies or landlords.

The Australian Tax Office notes if you rent a commercial property as your business premises, the rent is tax deductible and you may be able to claim GST credits for the GST included in the rent if the company is registered for GST.

Time: depends on agent, estimate 1-2 weeks for paperwork

Cost: varies

9.  Open a Commercial Bank Account

If you’re operating a partnership, company or a trust, you must have a separate bank account for the company for tax purposes.

Opening a business account is generally straightforward in Australia, and doesn’t have particular restrictions or requirements. Most of the major banks offer a quick and easy online registration process, or simply going to a bank in person, where an account can usually be opened on the same day.

Time: Generally instant (online)

Cost: Generally no charge (may require minimum initial deposit)

10.  Register for Payroll Tax

Companies employing people must register with the local revenue office when their Australia-wide wages exceed the threshold applicable in that state or territory. The Payroll Tax is a tax based on total wages per month, and is controlled at the state level, collected in each state or territory that staff are located in. Companies are only liable for payroll tax if the total wages exceed an exemption threshold per each state. The state bodies and applicable thresholds (as of June 2015) are listed on the government payroll website:

It is unfortunately difficult to give any specific guidelines on the process, price and timeframes of registering for Payroll Tax since it can vary greatly between states.

Time: 1 week-2 weeks (rough estimation)

Cost: depends upon state

11.  Sign up for Worker Compensation Insurance

If employing people, the company is obligated to maintain a current accident and sickness insurance, generally referred to as “Workers’ Compensation Insurance”. Law firm Henry Carus Associates states that although there is a federal agency overseeing the standards and laws are, for the most part, unified across all states, the actual operation of Workers’ Compensation is on a state level, each with its own rules and systems. Companies can register as an employer with the appropriate local state authority, usually named “WorkCover” or “WorkSafe”:

  • Australian Capital Territory – Work Safe Act
  • New South Wales – Work Cover NSW
  • Northern Territory – NT Work Safe
  • Queensland – The Workers’ Compensation Regulator (formerly Q-COMP)
  • South Australia – ReturnToWork SA (from 1st July 2015)
  • Tasmania – WorkCover Tasmania
  • Victoria – WorkSafe Victoria
  • Western Australia – WorkCover WA

It is unfortunately difficult to give specific guidelines on the process, price and timeframes of registering for Workers’ Compensation as an employer. However, generally, application can be done online or via post, but the specific application process and cost depends on the provider. As Safe Work Australia reports, in some states, the actual insurance is covered by a private insurance company that the company must engage, and only overseen by the Worker’s Compensation body, while sometimes it is covered directly. Generally costs are largely based on an employer’s health and safety performance, and the safety ranking of the industry, for example as reported by the Victoria Worksafe guide.

Time: 1 week (varies greatly depending upon insurer, business type, etc)

Cost: varies greatly depending upon state, insurer, business type, etc 

Representative Office

Where a foreign company does not intend to carry on business in Australia it may seek to establish a representative office. Such an office must however only engage in activities which will not amount to carrying on business (for example, undertaking promotional activities). PwC’s business guide states that if the representative office engages in activities that count as “carrying on business”, an Australian branch must be registered.

The representative office requires a minimum of 1 director or officer, who must be a natural person (i.e. not another company) and a resident in Australia. It may have additional directors who may be from any legal jurisdiction.  The primary example of a representative office is having a nominated person who handles local enquiries. The person may be employed by a local affiliate and authorized to act as an official point of contact for the parent company. The name of representative office will be the name of the parent company. Consulting Firm Five Consult notes that company names containing restricted words such as “Bank”, “Insurance”, “Trust” etc. will not be permitted however, unless appropriate approval has been obtained from the government.

Advantages/Disadvantages

A representative office is generally useful for companies wishing to establish a preliminary presence in a country prior to operational establishment. It can be useful as an information point for local customers or to establish a presence and perform preliminary actions like market research, networking, preparing for incorporation of a subsidiary, and the like. The primary restriction on a representative office is also its main disadvantage. As mentioned above, a representative office may only engage in activities that are not considered ‘carrying on business’ in Australia. In general, this means any direct profit-generating activities such as making sales.

The other major point to keep in mind is that because the representative office is not considered a legal entity the appointed director will act as the representative agent for the parent company. This means that they will be the one liable for any agreements made in Australia (such as real estate contracts). This also seems to mean that a representative office cannot retain staff as an Australian employer.

Registration Steps

Much less information about representative offices is available. Generally, it is mentioned along with the branch office form, but then only details of a branch office registration are discussed with representative offices being more of a footnote. It seems the only real formal requirement is to appoint a representative. This suggests that a representative office cannot directly employ people in Australia, and that a representative office would be a very limited form.

1.  Appoint a Representative

The representative office requires a local resident to act as a director responsible to local authorities. Additional directors can also be appointed, and these additional directors are free to be based overseas.

Five Consult reports that to report the representative operation, a Register of Directors must be submitted to ASIC.

Time: N/A

Cost: N/A

2.  Establish an Office

In Australia, renting ‘virtual offices’ is generally not sufficient to meet legal requirements of establishing a company, and a real physical office location will be required. Commercial premises can be leased through any number of private agencies or landlords.

The Australian Tax Office notes if you rent a commercial property as your business premises, the rent is tax deductible and you may be able to claim GST credits for the GST included in the rent if the company is registered for GST.
Note that the representative will ultimately be the one who is accountable for the lease.

Time: depends on agent, estimate 1-2 weeks for paperwork

Cost: varies

3.  Open a Commercial Bank Account

If you’re operating a partnership, company or a trust, you must have a separate bank account for the company for tax purposes.

Opening a business account is generally straightforward in Australia, and doesn’t have particular restrictions or requirements. Most of the major banks offer a quick and easy online registration process, or simply going to a bank in person, where an account can usually be opened on the same day.

Note that for a representative office, the representative will likely be the one who is responsible for opening the account.

Time: Generally instant (online)

Cost: Generally no charge (may require minimum initial deposit)

In Australia, there is little difference between the branch and subsidiary. While the subsidiary may take a bit more work to register and manage, it is a separate legal entity and this means the parent company’s records and liabilities can be better protected. Representative offices appear to be little documented, except for banks and international financial organizations. Therefore, the subsidiary company generally appears to be the most common structure for foreign businesses entering Australia.

Outsourcing Employment Through a GEO Employer of Record Service

Whether to incorporate in Australia, and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.

If the company intends to have staff in Australia they must also decide whether they will administer that employment internally or use a Global Employment Organization to handle payroll and Employer of Record responsibilities.  A GEO Employer of Record solution is an attractive alternative where

  • the company is looking to setup an office quickly
  • the company wants to work within a defined budget
  • the company wants to limit its initial commitment Australia
  • the company needs help with tax, employment, immigration and payroll compliance in Australia

The complexity of employment regulations in Australia makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example the drafting of local contracts for workers.

Shield GEO provides a comprehensive service in Australia allowing companies to deploy their staff quickly with reasonable, clearly stated costs and timeframes. The company contracts directly with Shield to employ and payroll their staff on their behalf in Australia.

Shield GEO then becomes the Employer of Record. Shield GEO assumes the legal responsibility for these employees, sponsoring them on work permits, complying with local employment law and running their monthly payroll. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Australia. Read more about outsourced employment through Shield GEO.

Summary of Set Up Steps

Rep. Office Branch Office Subsidiary Company Time Cost (AUD)
Check Availability of Name No Yes Yes Instant 0
Appoint a representative Yes Yes Yes N/A N/A
Register Company (ACN/ARBN) No Yes Yes 3-4 days 457
Apply for Tax File Number (TFN) and Australian Business Number (ABN) No Yes Yes Instant 0
Register business names No optional optional Instant 34
Register for Goods & Services Tax (GST) No Yes Yes 1 day 0
Register name as trade mark No optional optional 2-4 months 120+
Establish Office No Yes Yes N/A N/A
Open Corporate Bank Account No Yes Yes Instant 0
Register for Payroll Tax No Yes Yes 1-2 weeks Varies
Register for Workers Compensation Insurance No Yes Yes Varies Varies
TOTALS:*applications and processing times, not including internal document preparation, etc Rep.0 days

No cost

Branch1-2 weeks

$457-

$607+

Subsidiary1-2 weeks

$457-

$607+

Add an additional 2-4 months if registering trade marks. However, the business can register and commence without waiting for the trademarks.

+1 877 457 7691
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