Australia is a popular destination for foreign investors due to its stable economy, strong legal framework, and ease of doing business. If you are considering investing in Australia, one of the first steps is to register a company. Registering a company in Australia is relatively straightforward, but it does require adherence to certain legal requirements and procedures.
Types of Business Structures in Australia
Before delving into the registration process, it’s essential to understand the various business structures available in Australia:
Sole Trader
This is the simplest form of business structure, where one person operates the business. It offers full control but also exposes the individual to unlimited personal liability.
Partnership
A partnership involves two or more people (partners) carrying on a business together. Partnerships are relatively simple to set up but also come with unlimited personal liability for partners.
Company
A company is a separate legal entity from its owners (shareholders). It provides limited liability to shareholders, which means their personal assets are generally protected from business debts. This is often the preferred structure for foreign investors.
Trust
A trust is a legal arrangement where assets are held and managed for the benefit of others. It can be used for various purposes, including investment.
For foreign investors, the focus is usually on setting up a company. Below, we will walk you through the steps for registering a company in Australia.
For tax residents of Australia on temporary visas, refer to our article on the tax implication of residency and whether establishing a trust is an option.
Company Registration Process in Australia
Choose a Company Name:
The first step is selecting a unique company name that is not already registered or too similar to existing business names. You can check name availability on the Australian Securities and Investments Commission (ASIC) website.
Consider trademark registration if you want to protect your company’s name.
Appoint Company Officers
You’ll need at least one director who resides in Australia. Directors must be at least 18 years old and not disqualified from managing a company.
You can also appoint a company secretary, but it’s not mandatory.
Registered Office and Address
You must have a registered office address in Australia. This is where official documents will be sent.
You must also provide a physical address for your principal place of business.
Share Structure
Decide on the company’s share structure, including the number of shares and their value.
Prepare a shareholders’ agreement if there are multiple shareholders. While not mandatory, it can help clarify ownership and responsibilities.
Obtain an Australian Business Number (ABN)
You’ll need to apply for an ABN, which is a unique identifier for your company, for tax and business purposes. This can be done through the Australian Business Register (ABR).
Register for Goods and Services Tax (GST):
If your company’s annual turnover is expected to exceed a certain threshold (as of my last knowledge update, it was AUD 75,000), you must register for GST.
Apply for an Australian Company Number (ACN):
Once you have your ABN and other required information, you can apply for an ACN. ASIC has issued this as a distinctive identifier for your business.
Complete Company Registration Forms
Lodge the necessary forms with ASIC, including Form 201 (Application for Registration as an Australian Company) and Form 492 (Consent to act as director or secretary).
Pay Registration Fees
ASIC charges a fee for company registration. The fee may vary depending on your company’s structure and other factors.
Receive Certificate of Registration
Once ASIC processes your application, you’ll receive a Certificate of Registration, which confirms that your company is officially registered.
Compliance with Reporting and Regulatory Requirements
After registration, your company must comply with ongoing reporting and regulatory requirements, including filing annual financial statements, updating company details, and holding annual general meetings.
Additional Considerations for Foreign Investors:
Visa Requirements: If you plan to reside in Australia while managing your company, you may need to obtain an appropriate visa.
Taxation: Seek professional advice on your tax obligations in Australia, including income tax, capital gains tax, and withholding tax.
Legal and Financial Advice: It’s highly recommended to engage legal and financial professionals with expertise in Australian business and regulatory matters to ensure compliance with all laws and regulations.
Banking and Finance: Open an Australian bank account for your company’s financial transactions.
Business Licenses and Permits: Depending on your industry and location, you may need specific licenses or permits to operate legally.
Employment Regulations: Familiarise yourself with Australian labour laws if you plan to hire employees.
Conclusion
Registering a company in Australia as a foreign investor is a structured process that involves legal, financial, and administrative steps. While the process is relatively straightforward, it’s crucial to ensure compliance with all relevant regulations and seek professional guidance to navigate any complexities that may arise. Australia offers a stable and business-friendly environment, making it an attractive destination for foreign investment. By following the steps outlined in this guide and staying informed about any updates or changes in regulations, you can set up and operate your company successfully in Australia.
