Register a Company in Australia
Why choose Australia to start a Company?
Australia is a highly developed country with a mixed-market economy. Seventy-five per cent of Australian trade is with fast-growing economies in the Asia region. As of 2022, Australia was the 14th-largest national economy by nominal, the 20th-largest by PPP-adjusted GDP, and was the 22nd-largest goods exporter and 24th-largest goods importer. Australia is well placed to become a renewable energy superpower. Choose Australia to start a Company.
Forms of Business Registrations in Australia
Sole Proprietorship
This simple business format fits Individuals who wish to trade legally on their own. It is a perfect choice for small riskless businesses with modest capital investment.
If the business’ annual turnover exceeds 75k AUD, it needs to get registered for paying the Goods and Services Tax.
Partnership
A form of a partnership fits businesses that unite a small group of people (not more than 20) who work together and distribute the common revenues between themselves. A partnership agreement must specify how exactly a revenue or a loss must be distributed.
Companies
Proprietary companies
Under Australian law, a proprietary limited company (abbreviated as 'Pty Ltd') is a business structure that has at least one shareholder and no more than 50 non-employee shareholders, where the liability of shareholders is limited to the value of shares. Proprietary companies may be 'limited by shares' or 'unlimited with a share capital'.
- Small Proprietary company
A proprietary company is defined as small if it satisfies two of the following:
- The consolidated gross operating revenue of the financial year of the company and any entities it controls is less than $50 million.
- The value of the consolidated gross assets at the end of the financial year of the company and the entities it controls is less than $25 million.
- The company and any entities it controls have fewer than 100 employees.
- Large proprietary company
A proprietary company is a large proprietary company for a financial year if it satisfies at least 2 of the following paragraphs:
- the consolidated revenue for the financial year of the company and the entities it controls (if any) is $50 million, or more.
- the value of the consolidated gross assets at the end of the financial year of the company and the entities it controls (if any) is $12.5 million, or more.
- the company and the entities controls (if any) have 100, or more employees at the end of the financial year.
Public Companies
Public companies limited by shares
Public companies limited by guarantee
Unlimited public companies with a share capital
No liability companies
Taxation
Rates
All companies are subject to a federal tax rate of 30% on their taxable income, except for ‘small or medium business’ companies, which are subject to a reduced tax rate of 25%. The reduced tax rate applies only to those companies that, together with certain 'connected' entities, fall below the aggregated turnover
Foreign residents doing business in Australia need to register in tax system and pay taxes in Australia. This depends on the country of origin having a tax treaty with Australia, the scale and nature of the business and permanent establishment in Australia
Australian business number (ABN) for non-residents
The Australian business number (ABN) is a unique 11-digit identifier that makes it easier for businesses and all levels of government to interact.
As a non-resident entity, it may be entitled to an ABN where:
- it is carrying on an enterprise or business in Australia,
- make sales connected with Australia while carrying on an enterprise.
Non-resident businesses and GST
One must register for GST in Australia if both of the following apply:
- Carrying on a business or enterprise.
- GST turnover from sales connected with Australia from enterprise is equal to, or greater than the registration turnover threshold of A$75,000 (or A$150,000 if you are a non-profit organisation).
Distinction between Branch & Subsidiary
Basis | Foreign Branch office | Subsidiary Company |
|---|---|---|
Registration | Registered with ASIC Issued an ABRN. | Registered with ASIC Issued an ACN |
Liability | Not a separate legal entity. | Separate legal entity |
Taxation | Taxed on Australian-sourced income May not have to pay withholding tax if the parent country has a double tax treaty with Australial. | Taxed on worldwide-sourced income Taxed at a rate between 25% to 30% |
Officeholder | Local agent Resident public officer | Resident director Foreign director (appointed by the parent company) Resident public officer |
Compliance requirement | Submit annual returns with the ASIC Lodge balance sheet, profit and loss statement, cash flow statement and other documents required by the law in its place of origin with the ASIC | Lodge financial returns with the ASIC unless relief has been obtained Review and update details as provided on the ASIC generated annual review statement |
Audit | As required with the law in the company’s place of origin , or if an audit is not required in the place of origin, ASIC may request an audit if the financial reports submitted are insufficient | Required if it is controlled by a foreign company which is not a disclosing entity, unless relief has been obtained |
FAQs
Qu. Is local representative required?
Ans – Yes, local representative is required, Memorandum of appointment of local agent is used for this purpose. The memorandum or power of attorney must be executed by entity.
Qu. Is it mandate to maintain a registered office?
Ans –You must maintain a registered office in Australia that is open every business day from at least 10 am to 12 pm and 2 pm to 4 pm. This is unless you notify ASIC of alternative registered office hours.
Qu. When financial statements are to be lodged?
Ans –Registered foreign companies must lodge financial statements with ASIC at least once every calendar year. The time between financial statements cannot be more than 15 months.
Qu. What is the cost for registering a company?
Ans – The cost of registering a company ranges from $443 - $538, depending on the type of company you register.
Qu. Director provision if company have crowd-sourced funded shareholders?
Ans –If the company has crowd-sourced funded shareholders, it must have at least two directors. A majority of these directors must live in Australia.
Qu. Can a foreigner register a company in Australia?
Yes, foreigners can register a company in Australia. The Australian government encourages foreign investment and allows non-residents to establish businesses in the country. However, there are certain regulations and requirements that foreign individuals or entities need to comply with, such as obtaining necessary visas, adhering to business laws and regulations, appointing local directors or representatives if required, and fulfilling tax obligations.
Qu. Can an Indian register a company in Australia?
Yes, individuals of Indian nationality can register a company in Australia. Australia welcomes foreign entrepreneurs from various countries, including India, to establish businesses in the country. Certain conditions need to be met, especially for non-citizens who require specific work visas to initiate and operate a business in Australia. The process for registering a company in Australia is generally the same for both Australian residents and non-residents, with certain additional requirements for foreign individuals or entities.
Qu. Can one person start a company in Australia?
Yes, one person can start a company in Australia. This type of company is commonly known as a "sole trader" or "sole proprietorship." However, if you're referring to a private company limited by shares (Pty Ltd), Australian law requires at least one director and one shareholder, who can be the same person.
