1.    Incorporate a Subsidiary - Australian Proprietary Company (Pty Ltd)

Most foreign businesses establish a proprietary company – a wholly-owned subsidiary – in Australia, identified by "Pty Ltd" or "Proprietary Limited" in the company name. This is a separate legal entity and is required to be registered with the Australian Securities and Investments Commission (ASIC) and is governed by the Corporations Act 2001 (Cth).  Once registered, each company has a unique Australian Company Number (ACN). A proprietary company provides limited liability to their shareholders, whose liability is limited to unpaid share amounts in the event of liquidation.

Key Considerations:

• Must be registered with the Australian Securities and Investments Commission (ASIC) and receive a unique Australian Company Number (ACN).
• Must have at least one director who is an Australian resident (and at least one resident company secretary if a secretary is appointed).
• Must have a Registered Office located in Australia.
• Can appoint Foreign Resident Directors (FRDs) alongside the Australian Resident Director (ARD), typically most parents chose to appoint one or two FRDs.

There is no restriction on the share ownership of an Australian Pty. They can be 100% wholly owned by a foreign entity or shareholder(s).

Classification: Large vs. Small Proprietary Companies

A proprietary company may be classified as ‘large’ – versus a ‘small’ – proprietary company based on meeting at least two of the following criteria:

• Revenue: the consolidated revenue for the financial year of the local, Australian company and any entities it controls is $25m or more.
• Assets: the value of the consolidated gross assets at the end of the financial year of the company and any entities it controls is $12.5m or more; or
• Employees: the company and any entities it controls have 50 or more employees at the end of the financial year.

If a company does not meet at least two criteria, it is considered a small proprietary company.  Such a classification affects not only some ASIC reporting and audit requirements but also some tax-related ATO obligations. 

2.    Establish a Foreign Branch (ARBN)

A foreign company can operate in Australia as a foreign branch by applying to ASIC to register an Australian branch and obtaining an Australian Registered Body Number (ARBN). A foreign branch is not a separate legal entity, and all directors of the foreign company are subject to Australian laws, carrying the same legal and financial responsibilities as Pty Ltd company directors.

Key Considerations:

• Must have a registered office in Australia.
• Must appoint a resident public officer.
• Must appoint a local agent responsible for compliance with the Corporations Act 2001.
• Must lodge annual financial statements with ASIC – and a branch Company Tax Return (CTR) with the ATO if revenue generating – and meet specific reporting requirements.

3.    Register a foreign company Australian Business Number (ABN) only

For certain limited activities, a foreign company may undertake these specific activities in Australian. This includes a simplified Goods and Services Tax (GST) registration with the ATO. While it is technically possible to register an ABN and operate in a very limited capacity, this option carries significant legal and tax risks, limitations in operational scope and lack of credibility and trust. 

If a foreign company is “carrying on business” in Australia, it is legally required to either register as a foreign company or incorporate an Australian entity.

Comparison Table of Structures to Establish a Business in Australia

The following is a general overview of the comparison between Australian incorporation/registration alternatives commonly utilised by international businesses expanding into Australia.  Careful consideration and professional advice should be sought based on the specific circumstances relevant to your business. 

Australian Business Structures Pros and Cons

These are some general pros and cons of Australian corporate structure options relevant for most international businesses expanding into Australia. The decision is however based on specific circumstances. As such, further advice is recommended.  Beachhead can provide further detailed information based on your specific circumstances.  Contact Us for more information. 

The Right Structure for your Australian Business 

Choosing the right corporate structure is essential to setting up your Australian operations for long-term success. Each option comes with its own legal, tax and operational implications, so it is important to align your structure with your business goals, risk profile and growth strategy.

At Beachhead, we help international companies navigate these decisions and can undertake all aspects of establishing and growing your business in Australia.

Need help choosing the right structure for your Australian business.   Contact us to book a consultation.

* Director Identification Number (DIN) - All individuals – whether resident or non-resident – who wish to serve as a Director, must also have registered for, and hold, a “once-for-life” Director’s Identification Number (DIN). This includes both resident and foreign directors of all Australian companies and Australian Registered Bodies (or ARBNs, essentially a branch office).  

This is a summary of some common structures utilised by international companies operating in Australia. This information is general in nature and is not intended to be exhaustive or to represent specific advice. Advice should be sought based on specific circumstances and intended activities in Australia.