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This chapter is an extract from LegalVision’s 10 Things To Know Before You Bring Your Startup to Australia Guide. Download the full guide here.

Setting Up In Australia

There are various business structures available in Australia, however the most common options for startups are set out below:

Establishing a new company (often as a subsidiary to an international company)
Registering your existing company as a foreign company in Australia
 Acquiring an existing Australian company

Setting Up An Australian Company

When setting up an Australian company you need to consider the following:

  • Do you want to set up a private company or public company? Most startups begin as private companies limited by shares.
  • Will a foreign company own your Australian company as a subsidiary? You may be required to set up a company in Australia which has at least one Australian director.
  • Will your Australian company trade on behalf of the business? This includes entering into contracts with suppliers, contractors and employees.
  • Who will be your Australian resident director? Australian companies must have at least one director who is an Australian resident.
  • Will you have a foreign or Australian holding company for your business assets? You may set up another Australian company to own these assets.
  • Where will you hold the business’ valuable assets? Assets should be held separately from the trading company to protect them.

Checklist

Incorporate your company with the Australian Securities and Investment Commission (ASIC) and receive your ACN.

Apply for an Australian Business Number (ABN). ABN registration is required if the company is operating a business.

Apply for a TFN.

Register your business name. This is the name your business will trade under, and should be owned by your operating company.

 Consider whether you must register for Goods and Services Tax (GST) or Pay As You Go instalments (PAYG). PAYG registration is required if your business has employees.

Listing Your Startup on the ASX

If you plan to list your company on the Australian Stock Exchange (ASX), you will need to establish a public company and meet the prescribed requirements set out by the Corporations Act 2001 and the stock exchange listing rules.

For instance, your public company must:

  • have at least 300 non-affiliated shareholders with holdings valued at a minimum of $2,000 each;
  • have at least 20% of shares that can be publicly traded (free float); and
  • satisfy either the profit test or asset test. The profit test requires you to have at least $1 million aggregated gross pro t from continuing operations over the past three years and at least $500,000 consolidated gross pro t from continuing operations over the last 12 months. The asset test requires you to have at least $4 million net tangible assets or a market capitalisation post initial public offering of at least $15 million.

Registering As A Foreign Company

How you carry on your business as well as tax planning considerations will affect whether you:

  1. register your company as a foreign company in Australia;
  2. establish a new Australian company as an independent entity; or
  3. establish an Australian subsidiary of an overseas company.

You should seek advice from your accountant before choosing which structure to adopt. More often, foreign startups choose to incorporate an Australian subsidiary. But if you decide to do business from your home country, you must register your company with ASIC as a foreign company.

How to Register As A Foreign Company

Register an office in Australia and choose a local agent. If you do not have someone in Australia who can be your local agent, any company secretarial services business or accountant can offer local agent services.
Check that your preferred company name is available by searching ASIC’s business names register and IP Australia’s Trade Mark Register. Even if your name is available with ASIC, you should check whether there are other businesses using this name to avoid a potential breach of a trade mark.
File a Form 402 and provide the appropriate supporting documents including a certificate of incorporation, constitution, memorandum of appointment of a local agent and a memorandum stating the powers of an Australian resident director. Once successful, you will receive your certificate of registration and Australian Registered Body Number (ARBN).
Apply for an ABN. An ABN is necessary for all dealings with the Australian Government, ATO and for receiving payments for goods and services.

Acquiring An Australian Company

Finally, if you wish to expand into the Australian market via the acquisition of an Australian company, it is important that you closely follow ASIC’s regulation and guidance material relating to company takeovers. A foreign acquisition proposal may be subject to approval by the Australian Foreign Investment Review Board.

If you have questions about this Manual or about your online business before you start reading, you can contact LegalVision’s startup lawyers by calling 1300 544 755 or filling out the form on this page.

10-things-to-know-before-you-bring-your-startup-to-australia

This chapter is an extract from LegalVision’s 10 Things To Know Before You Bring Your Startup to Australia Guide. Download the free 31-page manual which includes information on government incentives, economic trends, geographical considerations, building a team, visas, how to protect your brand and how to set up in Australia.

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