Set Up a Business in Australia as a Foreign Company

The main choices

An overseas company that wants to carry on business in Australia generally has two structures to choose from (Austrade, Setting up a business):

	Register as a foreign company (branch)	Set up an Australian subsidiary
Registered with	ASIC (Australian Securities and Investments Commission)	ASIC
Number issued	ARBN (Australian Registered Body Number)	ACN (Australian Company Number)
Legal entity	Your existing overseas company	A new Australian company, usually a proprietary company (Pty Ltd)
Local people required	A local agent resident in Australia	At least one director who ordinarily resides in Australia

ASIC notes that if your overseas company sets up an Australian subsidiary and does not itself carry on business in Australia, it does not have to register as a foreign company (ASIC). Whether your activity counts as "carrying on business" depends on the facts, and ASIC recommends taking your own advice.

Some companies start without either structure, selling through an Australian distributor or partner. Whether that is enough for you is a legal and tax question about your specific activities.

Registering a foreign company (branch)

According to ASIC:

A company registered outside Australia must register with ASIC to conduct business in Australia. ASIC issues an ARBN.
Before registering, the company's directors need a director identification number (director ID) (Australian Business Registry Services).
The name must not already be in use by an existing Australian company or business name.
You apply on Form 402, which is lodged by post, not online, with a fee.
Supporting documents include a certified copy of your certificate of incorporation (dated no more than three months before ASIC receives it, unless ASIC allows longer), a certified copy of your constitution, and a memorandum appointing a local agent (Form 418). If the application lists directors who are resident in Australia and members of a local board of directors, you must also lodge a memorandum outlining their powers.
The local agent must be an individual or an Australian company, resident in Australia, authorised to accept service of process and notices for the company.
Ongoing obligations include keeping a registered office, displaying the company name, using a local agent and reporting to ASIC.

Setting up an Australian subsidiary

ASIC registers the company and issues a 9-digit ACN (ASIC, Australian Company Number).
A proprietary company must have at least one director who ordinarily resides in Australia (Corporations Act 2001, section 201A) (Federal Register of Legislation).
Every director needs a director ID (ABRS).
Many overseas groups use a professional resident director service rather than a local employee. Choose with care: a director has legal duties.

ABN, GST and related registrations

The ABN (Australian Business Number) is an 11-digit number issued through the Australian Taxation Office (ATO), not ASIC. Most companies have both an ACN (or ARBN) and an ABN (ASIC).
Companies registered with ASIC are entitled to an ABN, and the application asks for your ACN or ARBN (Australian Business Register).
You can apply for an ABN, GST (Goods and Services Tax) and PAYG (Pay As You Go) withholding registrations together through the government's Business Registration Service.
If an Australian customer pays a supplier that should quote an ABN and does not, the customer may have to withhold tax at the top marginal rate from the payment.

For broader guidance on licences, permits and employing staff, see business.gov.au.

Do you need FIRB approval?

The Foreign Investment Review Board (FIRB) advises the Treasurer on foreign investment. According to FIRB guidance:

Generally, a foreign person starting a new Australian business is not taking a notifiable or significant action, so approval is not usually needed just to set up a new subsidiary (FIRB, Business investments).
Exceptions: foreign government investors must notify before starting an Australian business, and anyone must notify before starting a national security business (FIRB, National security). Other actions may be reviewable and can be called in.
Buying an existing Australian business, shares or land is assessed separately and may need approval, depending on thresholds.

Energy, defence-related and critical infrastructure activities can raise national security questions. Get advice early if your technology touches these areas.

A practical order of work

Confirm there is demand: identify who buys and how they procure.
Decide whether to start with a partner, a branch or a subsidiary, with legal and tax advice.
Check your company name is available and your trade marks are protected in Australia.
Get director IDs, then register with ASIC and apply for your ABN and tax registrations.
Open a bank account, put contracts in place and check product standards and certification.

Riverstone does not provide legal, tax or company secretarial services. Our part is step 1 and the commercial work that follows: see Australian market entry and the Market Diagnostic.

Common questions

What is the difference between an ARBN, an ACN and an ABN?

ASIC issues an ARBN to a registered foreign company and an ACN to an Australian company. The ABN is an 11-digit business number issued through the ATO. Most companies have both. Sources: ASIC, ABR.

Can a foreign company get an ABN?

A company registered with ASIC, including a registered foreign company with an ARBN, is entitled to an ABN if it carries on an enterprise. See the Australian Business Register.

Does an Australian subsidiary need a local director?

Yes. A proprietary company needs at least one director who ordinarily resides in Australia, under the Corporations Act 2001 (legislation).

Do we need FIRB approval to set up a subsidiary?

Generally not, unless you are a foreign government investor or are starting a national security business. Check FIRB guidance and take advice.

Can Form 402 be lodged online?

No. ASIC states that Form 402 is lodged by post (ASIC Form 402).

Is this legal advice?

No. This page is general information drawn from official sources. Take advice from an Australian lawyer and tax adviser.

How to set up a business in Australia as a foreign company.