Foreign Companies operating in Australia

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I have recently had an enquiry from an international company in relation to its options with respect to establishing itself in Australia. Essentially, a foreign company wishing to establish itself in Australia has three options:

  1. Establish a representative office;
  2. Register itself as a foreign company carrying on business in Australia;
  3. Incorporate a new company.

Establishing a registered office

By establishing a registered office in Australia, the foreign entity may nominate an individual or an agent to represent the company in Australia. The representative may do a number of things, including being a party to court proceedings on behalf of the company, maintaining a bank account or collecting debts on behalf of the company.

However, having a representative office will limit the foreign entity’s ability to “carry on business” in Australia.

In order to carry on business in Australia a foreign entity must elect one of the following options.

Registering as a “foreign company”

If a foreign entity wishes to trade and carry on business in Australia using its existing entity, it must register itself as a foreign company carrying on business in Australia, with the Australian Investments and Securities Commission (“ASIC”).

Incorporation of a new company

Incorporating a new company in Australia will mean the foreign entity will need to register a new company in Australia. This could be a subsidiary of the foreign entity. There are a number of types of companies that can be registered in Australia. Those which are most common are:

  1. A public company; and
  2. A private company.

Both of these structures have different characteristics that may or may not be suitable.

As you can see a foreign entity must conduct some due diligence before it is able to decide what its best option is with respect to establishing itself in Australia. If you would like to consider your options in more detail please contact me.

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