International companies establishing an entity overseas face a potentially time-consuming and costly exercise. In Australia, foreign businesses can set up a subsidiary as a Private Company (Pty) with liability limited by share capital. The first step is to register with the Australian Securities and Investments Commission (ASIC). Then follows multiple layers of registration procedures for both the company and employees.
Expanding overseas is a major step and if the venture fails companies face the extra expenditure and stress of closing the company, selling property and paying off employees. It is easy to stumble while trying to fulfil two objectives – advancing your company at home while moving into a new territory, maybe thousands of miles overseas.
The sensible alternative is to use a Professional Employer Organization (PEO) and Employer of Record (EOR) such as Bradford Jacobs to locate the best talent and administer your payroll in Australia – speedily and risk free.
How to set up a Subsidiary in Australia
• Decide on location and select a company name unique to Australia
• File ‘Application for registering an Australian company’ with the Australian Securities and Investments Commission
• Obtain Australian Business Number (ABN) and Tax File Number (TFN)
• Liaise with Business Registration Services to obtain an Australian Company Number (ACN) and incorporation certificate
• Register for Pay As You Go (PAYG) for withholding tax and Goods and Services Tax (GST) if turnover is expected to exceed AU$75,000 (US$58,200)
Other steps include opening business bank accounts, authorizing a local representative to receive legal documents, insuring employees against illness or injury at work by registering with the relevant State Insurance Regulatory Authority (SIRA).
Companies can also use the Australian Government’s Business Registration Service (BRS), which combines several procedures in the single location.
What you need to set up an Australian Subsidiary
Incoming foreign companies need to have settled certain questions before they can set up a subsidiary, usually as a proprietary private company (Pty) with liability limited by shares. These include:
• An approved company name registered with the Australian Securities and Investments Commission (ASIC)
• Names of directors, including at least one Australian
• A company secretary (not mandatory) must be Australian
• Have a registered company address and place of business
• Details of share capital (a minimum of one share), which can be an individual or company
Benefits of setting up an Australian Subsidiary
A subsidiary incorporated in Australia as a Private Company (Pty) with liability limited by shares is a separate legal entity. The parent company is absolved of any responsibilities for the subsidiaries debts or activities.
The subsidiary can follow its business opportunities independently of the parent company, which has the advantage of using the subsidiary to explore the potential of the Australian market without committing to major capital investment.
Australian Subsidiary Laws
Subsidiaries in Australia are mainly governed by the Corporations Act (2001) and the Australian Securities and Investments Commission (ASIC). Once registered, a subsidiary can act as an independent legal entity and follow its own business practices without the parent company having any responsibility for debts or liabilities beyond its share capital in setting up the subsidiary.
Take a faster route into Australia with Bradford Jacobs
The cost-effective and time-saving alternative to the lengthy process of establishing a foreign-owned subsidiary in Australia is to work alongside an Employer of Record (EOR) such as Bradford Jacobs.
Our in-country specialists steer you through the complexities of setting up operations by onboarding new employees, then ensuring compliance with all employment and taxation regulations. You retain day-to-day control of your employees – who are in place and operational within days rather than the months it could take to incorporate an entity. There is no reason for international borders to stand in the way of your international expansion. Call us.