Business entities in Australia in 2021
Registering a new company is the most common way to start doing business in Australia. Please refer to the information below to learn more about the Australia Pty. Ltd. company (locally known as a proprietary company) and other types of businesses entities available in Australia.
Doing business in Australia with a local entity
The Australian limited liability company (private proprietary company)
- Forming an LLC in Australia can be done with only i) one shareholder ii) one director iii) one resident director iv) no minimum paid-up capital. Healy Consultants Group PLC can provide nominee services as a strategy to comply with this legal obligation;
- The company must prepare financial statements every year. The Australian authorities require local businesses to register and report for GST only if their annual sales exceed AU$75,000 (approximately US$55,000);
- To keep up with the increasingly fast-paced global business environment, we offer our Clients a turnkey solution, which provides them with a readymade company and registration number in Australia within two days;
- Best uses for an Australian proprietary company: The proprietary company is the most common type of entity in Australia and it is suitable for foreigners planning to conduct trading business activities and provide various services in Australia.
The Australian trading trusts
- In Australia, it is possible to use a unit trust company as an alternative to a trading company. In order to do so, the trustee(s) must register the trust with the Australian Companies Registrar and the tax authority in order to obtain an Australian Business Number and a Tax File Number;
- The main requirement for acceptance is to appoint a resident either as i) trustee (if all trustees are residing overseas) or ii) public officer;
- The trading trust is usually structured as a tax transparent entity, not subject to corporate income tax in Australia provided all its income is transferred to the trust’s beneficiaries;
- Best uses for an Australian trading trust: the trading trust is an interesting business vehicle for a family-owned business.
The Australian limited liability partnership (LLP)
- Incorporation of an LLP can be done between i) general partners who are personally liable for the partnership’s activities and ii) limited partners who are only liable for their committed contribution at the formation of the partnership. At least one general partner must be residing in Australia;
- Partnerships are usually tax transparent. The income derived through the partnership is not taxable at the “corporate” level but as personal business income of the partners themselves. The partnership however is still subject to standard GST and employer registrations;
- Best uses for an Australian LLP: This entity is commonly used to provide legal and accounting services to Clients.
The Australian public limited company (unlisted public company)
- Registration of a public company in Australia follows similar requirements to those of a proprietary company;
- The main differences are i) the need to appoint at least three directors, two ordinarily resident in Australia and ii) the obligation for the financial statements to get audited (while proprietary companies can benefit from the SMEs exemption);
- Best uses for an Australian PLC: The Australian public company is usually used by businessmen who wish to make sure the management represents all parties and the financial statements represent a fair summary of the company’s profits and losses. Such an entity is also required before an eventual IPO on the Australian Stock Exchange
The Australian free zone company
This entity currently does not exist as Australia does not have any special economic zones yet.
Doing business in Australia with a foreign entity
The Australian branch
- Incorporation of Branch requires i) appointment of a local agent to accept notices on behalf of the foreign company and ii) a registered address in Australia. After its registration, the branch must submit annual financial statements to the Australian Companies Registrar (ASIC);
- Best uses for an Australian branch: A branch is recommended only if the operations in Australia will be simple to manage from overseas and do not create any legal risk. Another advantage of the branch is that its financial results are consolidated with the Group it belongs to.
The Australian Representative Office
- A foreign company which does not intend to conduct business in Australia may seek to establish a representative office for marketing and research. The representative office is allowed to conduct only limited, non-commercial activities in Australia;
- Best uses for an Australian representative office: The representative office is an attractive business entity prior to first ventures in Australia, when our Client only wants to conduct a market survey or have a local presence in the country.
Comparison table of different types of business entities in Australia
|Operations and logistics||LLC||Trading trust||LLP||PLC||Branch||RO|
|Also known as:||Pty. Ltd.||Trading trust||LLP||Public proprietary||Branch||RO|
|Office premises before registration?||Yes||Yes||Yes||Yes||Yes||Yes|
|Our Firm can supply a Australia virtual office?||Yes||Yes||Yes||Yes||Yes||Yes|
|Doing business in Australia permitted?||Yes||Yes||Yes||Yes||Yes||No|
|Allowed to sign contracts with local Clients?||Yes||Yes||Yes||Yes||Yes||No|
|Allowed to invoice local Clients?||Yes||Yes||Yes||Yes||Yes||No|
|Allowed to import raw materials?||Yes||Yes||Yes||Yes||Yes||No|
|Allowed to export goods?||Yes||Yes||Yes||Yes||Yes||No|
|Accounting and tax|
|Corporate tax on local income?||Yes||No||No||Yes||Yes||Not allowed|
|Corporate tax on foreign income?||Yes||No||No||Yes||No||Not allowed|
|Statutory audit required?||No||No||No||Yes||Yes||Yes|
|Annual tax return to be submitted?||Yes||Yes||Yes||Yes||Yes||Yes|
|Access to DTAAs?||Yes||No||No||Yes||Yes||No|
|Issued share capital required?||US$1||US$1||US$1||US$1||None||None|
|Resident director/representative required?||Yes||Yes||Yes||Yes, 2||Yes||Yes|
|Australian shareholder/partner required?||No||No||Yes||No||No||No|
|Minimum number of directors?||1||1||2||3||1||1|
|Minimum number of shareholders?||1||1||2||1||Parent company||Parent company|
|Individual shareholders allowed?||Yes||Yes||Yes||Yes||No||No|
|Corporate shareholders allowed?||Yes||Yes||Yes||Yes||Yes||Yes|
|Public register of shareholders and directors||Yes||Yes||Yes||Yes||Yes||Yes|
|Can the entity hire expatriate staff?||Yes||Yes||Yes||Yes||Yes||Yes|
|How long to get work permit approved||6 months||6 months||6 months||6 months||6 months||6 months|
|Detailed engagement timelines?|
|Estimate of engagement costs||AU$15,697||AU$21,076||U$9,637||AU$10,097||AU$9,990||AU$9,660|
|Draft invoice||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF|
Let us know if you require Healy Consultants Group PLC’s assistance to engineer the optimum corporate vehicle for your business in Australia.