
As demands increase and the international markets become more competitive, many companies are looking to expand their businesses into other countries. Australia has been recently ranked 14th out of 190 countries for ease of doing business. If you’re a foreign company looking to register in Australia, there are multiple, easy ways to get started.
Your company must align with the definition of “foreign company” outlined in section 9 of the Corporations Act 2001 (Cth), i.e., a company registered with ASIC to carry on a business in Australia.
But, if your business is registered outside Australia, it does not need to register as a foreign company if you elect to incorporate an Australian company/subsidiary to conduct business in Australia.
Carrying on a Business in Australia
To carry on a business in Australia, you must have a fully or partly owned local subsidiary company or a branch office. Carrying on a business within Australia means,
- Dealing with someone else’s properties in Australia;
- Making deals and contracts in Australia for long periods;
- Advancing a company’s gain in Australia;
- Keeping profits in mind when conducting business in Australia.
You can always talk to a lawyer if you are unsure whether any of these conditions apply to your company “carrying on a business” in Australia.
If You Don’t Plan to ‘Carry on a Business’
If none of the above conditions apply to you and your company not looking to continue business in Australia, there is no need for a branch or a subsidiary. Instead, you can open a representative office which allows for easier communication domestically and promotes your company from abroad.
However, if you do continue to pursue activity that even resembles something as close as carrying on a business, there is no way to avoid setting up a branch or a subsidiary.
Steps to Register a Foreign Company
#1 Make Sure Your Company Name is Available
The first step to registering a company is to ensure you are using a name that is not identical to the name of an existing company or business operating in Australia. There are websites and registries available online that you can look through to see if the name you want is available.
There are names and phrases you cannot use unless you have been granted approval from an Australian Government Minister or the Australian Securities and Investments Commissions (ASIC).
Examples of business names that are unlikely to be approved include those using words that are misleading, offensive, or suggest any connection to the Australian Government or to the British Royal Family.
Make sure your company’s name doesn’t infringe any trademarks. Even if the government registers your company with a similar name to another company with a similar trademarked name, they retain the right to pursue legal action against you.
You can also reserve a company’s name in case you’re not ready to register your entity as a foreign company in Australia. Apply to reserve it by filling the Form 410 Application on ASIC with the name to be reserved.
#2 Fill in ASIC’s Form 402
Provide general information about the company and how it will run when filling out the Form 402 application. If you do not have a “director identification number,” you will not be able to register your foreign company. Furthermore, the government will reject your application if your proposed company name is unavailable or in the directory.
#3 Make a Checklist for Documents to be Submitted
Many foreign company applications get rejected or delayed by the Australian government because they have not attached all the requisite supporting documentation. It is important to ensure all your supporting documents meet ASIC’s requirements and where necessary, have been translated into English.
Here are three types of businesses you can operate/establish in Australia as a foreign company:
- Proprietary company
- Registered foreign company
- Representative Office
Proprietary company
If you want to establish your company as a separate entity so you can manage your operations in Australia effectively, that would be called a proprietary company (Pty Ltd). Much like any other proprietary company, these work under the same rules and regulations. In addition, the government will feel at ease interacting with a company registered as a Pty Ltd rather than a foreign one.
To operate effectively, a proprietary company in Australia needs to have a structure where there is one shareholder at least and 50 shareholders that aren’t employees. You should have:
- An office located and registered in Australia;
- One director is a resident of Australia;
- You can reserve the company and its name to the Australian Securities Investment Commission (ASIC) by filing a Form 410 application;
- Appoint an Australian resident director and decide how you’d like your company to be governed;
- Register your company through the Business Registration Service.
Foreign Company
If, as a business, you do not want to incorporate a separate Australian branch but want to carry out business in Australia, you can register your company directly through ASIC. A foreign company is not a legal entity separate from its parent company in Australia. Rather, it is more like a branch of a foreign company or a representative office in another country.
To register a foreign company, ensure you’ve chosen and reserved a unique name and complete the Form 402 application. To mitigate any further delays, ensure you have the following documentation:
- A certificate from the parent company’s governing body that confirms the company’s credibility.
- A completed Form 418 memorandum of appointment of the local agent.
- A certified copy of the company’s constitution.
- A memorandum stating the powers of certain directors.
Remember that a registered foreign company in Australia is not a separate legal entity from its parent company.
Representative Office
Foreign Companies also have the option to have a brand presence in Australia without having to “carry on business” activities, i.e., having representative offices. However, these offices are limited to exploring the market here in Australia, understanding the potential, and looking for clients. You cannot participate in any activity as a representative office that generates income.
In the case of selling or signing contracts, the office is automatically carrying on business and is considered a permanent Australian establishment.
You do not need to register your office through ASIC, but have to register it through the Australian Taxation Office (ATO), especially if you have employees in the office. Here are the steps to follow:
- Appoint a director or an officer who lives in Australia. They will also act as your company’s representative agent;
- Find and rent or buy a physical office location;
Remember to register your representative office with the ATO.
Conclusion
Australia is a world of opportunities, with a robust economy and easy banking systems for companies looking to establish their businesses. If you’re confused about which option would be best for your business, Lazarus Legal has a team of highly competent and qualified lawyers who can help with many legal issues regarding your company, as they specialize in business and legal services. Contact us through via this form and book a free appointment with us to get started on your Australian business endeavours.
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Mark Lazarus
Mark Lazarus, the visionary behind the business and the fresh blood of the Lazarus Legal team, Mark (or Laz as he is often known) owes much of his success to his past experiences. And he’s made it his personal goal to bring that wisdom and formula to the firm.