A Brief Look At The Requirements For Foreign Entities Wishing To Do Business In Australia


Australia is a great place to do business and is quite welcoming to foreign firms that want to add to the nation’s formidable economic clout! Even so, there are some requirements in place that anyone wishing to do business down under will have to take into consideration.

The first of these is the necessity of having an Australian resident director in place who is familiar with the local financial, corporate, and legal landscape during the period in which the foreign company is transitioning to a high-level local presence. 

Next, you will be required to have a business structure ready to clarify the company’s legal and taxation obligations, and that reflects one of the following three models:

Sole Trader – A relatively simple structure that is easy to establish and has fewer reporting requirements. The sole trader has complete control of the business and its assets and pays the taxes for any personally generated income. It should also be noted that their personal assets would be accessible to creditors due to their unlimited liability.

Joint Venture – This is an agreement designed for two or more companies or individuals to work on a project together in lieu of the conduction of an ongoing business venture. Some examples of this model’s uses include expanding target markets, developing areas of trade, and implementing new product launches. The joint venture’s partners exist as a separate legal entity beyond the individual members that shares the responsibilities of the project’s cost management as well as any profits and losses.

Partnership – This business structure is used for entities comprised of two people or more who maintain a formal agreement in regard to the sharing of profits and losses.

 There are three types of partnerships:

  • General Partnership – This is a partnership that maintains an agreement in which all of its member partners share the jointly owned business’s financial and legal liabilities.
  • Limited Partnership – The amount of money the general partners invest in the business forms the limits of their individual liability. The limited partnership is popular for investors who do not wish to participate in a business’ daily management procedures.
  • Incorporated Limited Partnership –  This kind of partnership makes it possible for the partners involved to be held liable for limited amounts of business incurred debt. General partners with unlimited liability must also be included and can be held personally liable if the obligations of the business fall short and go unmet.

The Trading Trust – This legal device is the holder of assets and goodwill for the company’s beneficiaries. In most cases, the trustee is the entity that holds an obligation to perform trades that are in the interests of the beneficiaries. The beneficiaries then receive the distributed income rather than the shareholders, and the responsibility of paying the employees is held by the trust.

Shareholder Structure – The shareholder’s agreement should ensure that the responsibilities and powers of each shareholder are stated clearly and concisely and that the businesses’ intellectual property is protected by the proper corporate structure.

The Australian Trade and Investment Commission maintains a guide for foreign concerns wishing to set up business in the country. We hope this article helps you get started with your business plans in Australia!




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